weighted score 4.9 · nine dimensions
Country Risk Profile
Sri Lanka
Sourcing risk, regulatory exposure and audit intelligence for Sri Lanka-origin supply chains.
Forced & child labour
5
Limited TVPRA listings. No forced labour goods listed. Some child labour in informal agriculture. Export garment sector generally better than regional peers but monitoring gaps exist.
Worker rights & FOA
5
ITUC rating 4 (systematic violations). FTZ worker rights restrictions documented. All eight ILO fundamental conventions ratified but enforcement uneven, particularly in export processing zones.
OHS & audit transparency
5
Garment sector audit infrastructure exists (WRAP, SMETA). OHS standards in top-tier factories adequate. Smaller suppliers and non-garment sectors have weaker OHS frameworks. Audit access generally not restricted.
Food & product safety
5
Tea and spice exports generally meet international standards. RASFF notifications for Sri Lankan food products are moderate. SPS certification processes functional but slow.
Environmental & regulatory
4
No active EU IUU card. Some illegal fishing concerns in small-scale fisheries. Environmental regulation exists but enforcement capacity is limited. No EUDR-regulated commodity exports at significant scale.
Governance & anti-corruption
6
TI CPI 36/100. Sovereign default exposed systemic governance failures. IMF programme driving institutional reforms. State-owned enterprise governance remains weak.
Tariff & preferential access
3
EU GSP+ reinstated 2017 — strong preferential access for EU-bound goods. GSP+ conditionality creates incentive for continued compliance with international conventions.
Non-tariff barriers
5
Import licensing, forex restrictions (easing), customs friction. SPS certification functional but slow. Post-crisis capital controls have largely eased but residual restrictions remain.
Supply chain traceability
6
Garment sector traceability relatively strong — vertically integrated factories with direct brand relationships. Tea sector has established traceability via auction system. Other sectors less mature.
Labour & Social Risk
Labour & Social Risk
- Forced labour exposure
- Sri Lanka has limited TVPRA (US Department of Labor) listings. No goods are currently listed under the forced labour category. Some child labour concerns exist in domestic agriculture and informal sectors, but export-oriented garment factories generally maintain better standards.
- Worker rights
- ITUC Global Rights Index rating of 4 (systematic violations). Free trade zone (FTZ) workers face documented restrictions on freedom of association and collective bargaining. Anti-union discrimination has been reported in garment sector FTZs, particularly in Katunayake and Biyagama.
- ILO conventions
- Sri Lanka has ratified all eight ILO fundamental conventions, which is a requirement for EU GSP+ eligibility. Implementation and enforcement remain uneven, particularly regarding freedom of association in export processing zones.
Governance & Regulatory Exposure
Governance & Regulatory Exposure
- Corruption perception
- Transparency International CPI score of 36/100 — indicating significant corruption concerns. The 2022 sovereign default exposed governance failures across state-owned enterprises and public finance management.
- EU GSP+ conditionality
- GSP+ was reinstated in 2017 subject to continued compliance with 27 international conventions on human rights, labour, environment, and good governance. The EU conducts periodic monitoring — non-compliance could trigger suspension, as occurred in 2010.
- IMF programme
- The IMF Extended Fund Facility (approved March 2023) imposes fiscal consolidation, tax reform, and governance conditions. These reforms are improving institutional frameworks but create short-term policy uncertainty for businesses operating in Sri Lanka.
Trade & Market Access
Trade & Market Access
- EU GSP+ access
- Duty-free access for over 6,000 tariff lines into the EU under GSP+. This is Sri Lanka's most significant trade preference and a key competitive advantage for garment exporters targeting European markets.
- 2022 sovereign default
- Sri Lanka defaulted on its sovereign debt in April 2022 — the first default in the country's history. Debt restructuring negotiations with bilateral and commercial creditors are ongoing. The default triggered import restrictions, currency controls, and severe economic contraction.
- Non-tariff barriers
- Import licensing requirements, forex restrictions (easing under IMF programme), and inconsistent customs valuation create non-tariff friction. SPS requirements for food exports are generally met but certification processes can be slow.