Sri Lanka eyes expanded trade and investment with Saudi Arabia amid rising exports and joint business initiatives.
Riyadh, January 27, 2026 – Sri Lanka seeks to strengthen Sri Lanka Saudi economic ties through ongoing negotiations on an investment and trade promotion agreement. Deputy Minister Chathuranga Abeysinghe highlighted potential in sectors like renewable energy and IT during his recent visit to Riyadh. This comes as Sri Lankan exports to Saudi Arabia rise and the new Sri Lanka Saudi business council fosters private sector links.
The development holds significance for South Asia. Sri Lanka’s push aligns with regional efforts to diversify economies and tap Middle Eastern markets. With 200,000 Sri Lankans employed in Saudi Arabia, enhanced ties could boost remittances and job opportunities across the region.
Sri Lankan Exports Saudi Arabia Show Steady Growth
Sri Lankan exports Saudi Arabia reached SAR 50.6 million in October 2025. This marks a positive trade balance of SAR 25.5 million for that month. Officials note a 19 percent increase in exports from January to September 2025.
Key products include unique agricultural items. Sri Lanka supplies premium crops that support Saudi Arabia’s food security goals. Deputy Minister Abeysinghe said: “Some of our crops are unique and we see that the Middle East especially Saudi Arabia is focused on food security and authentic food. We have very unique premium agricultural products.”
Labour remains a core link. About 200,000 Sri Lankans work in Saudi Arabia. This forms the bulk of current economic activity. Remittances from these workers aid Sri Lanka’s economy amid recovery efforts.
Sri Lanka Saudi Business Council Drives Collaboration
The Sri Lanka Saudi business council launched in November 2025. This historic step followed a memorandum of understanding between the Federation of Saudi Chambers and the Ceylon Chamber of Commerce.
Chairman Abdul Hadi Alqarni pledged to promote business-to-business ties. Sectors include trade economics and environment. The council aims to facilitate private sector engagement.
Abeysinghe stated: “We from a government perspective want to facilitate these two parties to work together and to see and support the agenda that they will set forth as a council.”
This initiative builds on prior efforts. The first session of the Sri Lanka Saudi joint commission occurred in May 2023. It covered vital areas like trade and investment.
Progress Toward Sri Lanka Saudi Trade Agreement
Negotiations for a Sri Lanka Saudi trade agreement advance. The pact focuses on investment and trade promotion. Abeysinghe noted: “Currently I think it’s limited ties but there are negotiations taking place on a particular investment and trade promotion act agreement.”
Sri Lanka and Saudi Arabia have signed 10 bilateral agreements to date. These include avoidance of double taxation. Three agreements came in the last 15 months.
The embassy in Riyadh supports these efforts. Ambassador Ameer Ajwad emphasised strategic partnership. Activation of existing pacts could unlock more opportunities.
Trade data underscores potential. Sri Lanka ranks as Saudi Arabia’s 27th trading partner. No bilateral trade agreement exists yet but exchanges date back to 1995.
Opportunities in Key Sectors
Renewable energy offers promise. Sri Lanka’s potential is 16 times its projected needs by 2050. Investments in green hydrogen are expected.
Abeysinghe said: “We would like to see how we can make use of that. We are expecting investments to come into this sector because going forward green hydrogen will be a key energy source.”
Maritime activities include shipping and ports. Tourism targets Saudi visitors. Sri Lanka sees scope for collaboration.
IT and startups hold appeal. Abeysinghe highlighted: “We see opportunities for collaboration between our startups and Saudi investors.”
Agriculture aligns with Saudi priorities. Unique crops fit food security needs.
Technology emphasises skills and intellectual property. Partnerships could involve production in Saudi Arabia.
Background
Diplomatic relations between Sri Lanka and Saudi Arabia mark 50 years in 2025. Early cooperation included a US$ 30 million loan for infrastructure.
The labour market grew prominent. Sri Lankans contribute to Saudi projects. Economic ties evolved with Vision 2030 in Saudi Arabia.
Sri Lanka’s recovery post-crisis boosts exports. Positive growth and low inflation aid this.
Saudi transformation drives change. Abeysinghe noted: “What we see from Saudi Arabia’s perspective is strength as a country in terms of driving transformation with a clear vision. We see how changes have taken place both physically and economically in Saudi Arabia.”
Capital from Saudi private sector offers potential. Sri Lanka’s small and medium enterprises are world-class. They seek partnerships.
What’s Next
Government-to-government ties will expand. Proposals target Saudi market products. Bilateral private sector talks are planned.
Abeysinghe said: “We would like to see G2 partnerships. We will be sending proposals here and also a targeted approach on certain products that fit the Saudi market to see more bilateral discussions taking place between the private sector in Sri Lanka and the private sector in Saudi Arabia.”
The Sri Lanka Saudi business council will set agendas. Focus remains on sectors like renewable energy and IT.
Enhanced Sri Lanka Saudi economic ties could transform bilateral relations. With rising Sri Lankan exports Saudi Arabia and the new Sri Lanka Saudi trade agreement on horizon progress appears steady.
Published in SouthAsianDesk, January 27th, 2026
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