Sri Lanka’s tech exports widen over traditional Ceylon Tea in early 2026

The knowledge-driven information and communication technology (ICT) and business process management (BPM) sector has decisively accelerated its lead over the traditional tea exports during the first four months of 2026, cementing a structural transformation in Sri Lanka’s export economy. 

While the recent social media buzz has celebrated tech exports overtaking Ceylon Tea as a sudden, new phenomenon, the official data confirms this historic crossover actually materialised in 2024. 

Today, the gap is only widening and another quiet powerhouse—the electrical and electronic components sector—is demonstrating an explosive growth that could eventually see it challenge the traditional agricultural exports in the years to come.

The Export Development Board figures reveal a stark divergence in the trajectories of these critical industries. The ICT/BPM sector generated US $ 581.7 million from January to April 2026, marking a robust 22.6 percent year-on-year growth. In contrast, the earnings from tea exports contracted by 5.5 percent to US $ 451.58 million during the same period. 

The divide was particularly evident in April alone, where the tech and knowledge services brought in an estimated US $ 146 million, significantly outperforming the US $ 100 million recorded by the tea sector.

By end-2025, the ICT/BPM sector had generated an estimated US $ 1.64 billion, roughly Rs.492 billion, comfortably ahead of US $ 1.51 billion or Rs.453.28 billion earned by the tea industry. This sustained momentum is heavily fuelled by a strategic pivot towards high-value digital engineering and proprietary product development but it is also heavily supported by targeted government interventions.

To accelerate this growth, the state has rolled out aggressive tax breaks and incentives tailored for the tech sector. Under the Board of Investment (BOI), the technology and IT service exporters can qualify for complete tax holidays of up to five years, after which they transition to a preferential corporate tax rate of 14 percent, half the standard 30 percent rate. 

Furthermore, the BOI significantly lowered the minimum investment threshold for these incentives from US $ 3 million to just US $ 250,000, opening the doors for the local start-ups and small-to-medium enterprises to scale rapidly. 

The freelancers and individual tech professionals are also benefiting, with the Inland Revenue Department guidelines allowing tax-free foreign remittances up to Rs.20 million annually, encouraging the inflow of foreign exchange from remote global work.

While tech thrives, the industry analysts attribute the recent struggles of the tea sector to a confluence of geopolitical and operational headwinds. The escalating tensions in the Middle East have disrupted the traditional shipping routes, leading to sharp increases in the freight and insurance premiums. These logistical bottlenecks have dampened the demand from key traditional buyers in the Gulf region, placing severe margin pressures on the local exporters, who are already navigating the rising domestic production costs and unpredictable weather patterns.

Amidst this transition, the electrical and electronic components sector is rapidly emerging as another bright spot in Sri Lanka’s diversifying export portfolio. Earning approximately US $ 438.49 million or Rs.131.5 billion in 2025, the sector remains smaller than the powerhouse ICT and tea industries in absolute value. However, its growth trajectory is exceptionally steep.

In the first two months of 2026, the electronics sector recorded a massive surge, with the export earnings jumping by 52.74 percent to hit US $ 91.28 million compared to the same period last year. February 2026 alone saw a 54.37 percent expansion, driven by heavy shipments of electrical transformers, switches, boards and printed circuits. Much of this expansion is tied to the strong regional demand from neighbouring India. 

While it may take time for the electronic exports to match the massive volumes of Ceylon Tea, its current exponential trajectory positions it as the next major pillar of the national economy, proving that Sri Lanka can competitively produce complex industrial components alongside its expanding digital services. (NF)