Govt to renegotiate FTAs making them more favourable to country

By the Editorial Team · Sunday, August 30, 2026

Sri Lanka is preparing to renegotiate its free trade agreements with India, Pakistan, Thailand, and Singapore to obtain more advantageous terms. This move aims to modernize outdated provisions and strengthen the country’s trade position amid changing economic conditions.

Sri Lanka plans to renegotiate its existing free trade agreements (FTAs), including the longstanding pact with India, to secure terms more favorable to the country, a senior government official said. The government intends to present a proposal to Cabinet soon aimed at revising the four key FTAs Sri Lanka currently maintains with India, Pakistan, Thailand, and Singapore.

The decision follows a comprehensive review conducted by a Cabinet-appointed committee tasked with assessing the current trade agreements. According to the official, the committee’s report outlined both the advantages and disadvantages of the FTAs, identifying opportunities to improve the arrangements to better serve Sri Lanka's economic interests.

During a recent visit by India’s Foreign Secretary Vikram Misri to Sri Lanka, both countries agreed to establish a new joint working group dedicated to updating the India-Sri Lanka Free Trade Agreement, originally signed in 1998 and in effect since 2000. The working group members from both sides are expected to be named soon, with negotiations set to begin shortly.

The Sri Lankan official expressed optimism that India would approach the renegotiations with flexibility, allowing Sri Lanka to obtain improved conditions in bilateral trade. They emphasized that some provisions of the current trade agreements are outdated, further underscoring the need for revision and potentially new agreements.

In addition to the India FTA, Sri Lanka maintains several other significant trade pacts. The FTA with Pakistan was signed in August 2002 and became operational in June 2005. The country’s agreement with Singapore took effect in 2018, while the FTA with Thailand was signed in 2020. Beyond these FTAs, Sri Lanka is also party to several regional and multilateral trade agreements, including the South Asian Association for Regional Cooperation (SAARC) Preferential Trading Arrangement (SAPTA), the South Asian Free Trade Area (SAFTA), the Asia-Pacific Trade Agreement (APTA), the Global System of Trade Preferences (GSTP), and the United Kingdom’s newly established Developing Countries Trading Scheme (DCTS).

The government’s initiative reflects a broader strategy to adapt Sri Lanka’s trade relationships in response to evolving economic conditions and to enhance its position in international markets.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.