- USA remains in third place
- Trade with smaller partners improves in 2020
In spite of disruptions caused to the supply chain due to the pandemic last year, China was able to surpass India in becoming Sri Lanka’s major trade partner in terms of both imports and exports, according to the Central Bank of Sri Lanka’s (CBSL’s) annual report for the financial year 2020.
The US remains in third place as a trade partner to Sri Lanka.
Although China has surpassed in total trade (exports and imports) to Sri Lanka, there is a considerable decline overall due to the impact of the pandemic. The total trade of China, India, and the US together was valued at $ 12.6 billion in 2019, whereas it shrunk to $ 10.5 billion in 2020.
In 2020, country-wise, the notable trade surpluses were recorded from the US, the UK, Germany, Belgium, the Netherlands, and Italy. Sri Lanka recorded trade deficits from Asian region countries such as China, India, the United Arab Emirates (UAE), Singapore, Malaysia, and Japan. Thus, in order to improve trade balances, increasing export earnings from and reducing import expenditure to the Asian region countries appears to be a pragmatic approach, according to the annual report of the CBSL.
On the other hand, with smaller trade partners such as Oman, Kuwait, and South Africa, trade improved. Despite the decline of almost $ 700 million in 2020, the US remained the single largest export destination for Sri Lanka, with 42% of the latter’s garment exports going to the US in 2020.