Sri Lanka’s export ambitions face growing workforce hurdle

The local export fraternity is calling for a framework to recruit foreign workers, warning that a worsening shortage of skilled and semi-skilled labour is beginning to constrain production and could undermine the country’s ambitious plan to raise annual export earnings to US$ 36 billion by 2030.

The National Chamber of Exporters (NCE) said workforce shortages, once confined to a handful of industries, had evolved into a broader competitiveness challenge affecting multiple sectors identified as priorities under the National Export Development Plan (NEDP) 2026-2030.

“Another crippling challenge raised across several export sectors is the growing shortage of skilled and semi-skilled labour, affecting production capacity, expansion plans and the ability to meet delivery commitments in international markets,” the chamber said. Sri Lanka is aiming to increase merchandise exports to US$ 28 billion and services exports to more than US$8 billion by the end of the decade, requiring annual growth of around 10-12 percent.

While exporters have welcomed the government’s focus on expanding foreign exchange earnings, industry stakeholders argue that labour constraints are emerging as one of the most immediate obstacles to achieving those targets.According to the NCE, the impact is particularly visible in specialised export manufacturing industries where employers are struggling to replace experienced workers lost to overseas migration.

In the boat-building sector, which has been identified as a priority industry under the export development plan, exporters report employee attrition levels of nearly 80 percent in specialised trades such as fiberglass moulding, marine electrical work and technical fabrication.

“At the same time, it is no longer confined to individual industries but has become a broader competitiveness issue affecting the country’s export sector,” the chamber said.

The boat-building industry recorded growth of 8.31 percent during the January-April period compared with the corresponding period of last year, but exporters say labour shortages are increasingly limiting their ability to scale up operations and meet growing demand in overseas markets.

The NCE said members had called for “a streamlined framework that would allow exporters to recruit foreign workers when local labour shortages cannot be addressed through domestic recruitment”.

The chamber noted that “no clear mechanism currently exists to facilitate the timely importation of labour for industries facing acute workforce shortages”.

There is a growing concern within the export sector that Sri Lanka’s shrinking labour pool could become a structural constraint on growth, particularly in industries that require specialised technical skills and long training periods. Exporters asserted that addressing labour shortages will be as important as improving infrastructure, streamlining regulations and expanding market access if Sri Lanka is to meet its export ambitions and strengthen its position in international markets.