The Sri Lanka Export Development Board (EDB) has discussed the potential impact of the EU–India Free Trade Agreement (FTA) on Sri Lanka’s export sectors with consultants appointed by the European Commission.

The discussions focused on the likely impact of the agreement on key Sri Lankan exports, particularly apparel, as Indian products are expected to gain greater price competitiveness in the European market following substantial tariff liberalisation.

Negotiations on the EU–India FTA were concluded in January 2026 and the agreement is expected to enter into force after completion of legal review, signing and ratification procedures.

EDB Chairman Mangala Wijesinghe highlighted the importance of the European Union, which accounts for around 24% of Sri Lanka’s merchandise exports and is the country’s second-largest export market after the US. He stressed the need to safeguard Sri Lanka’s preferential access under the EU’s GSP+ scheme, particularly under the bloc’s revised GSP framework.

European Commission consultant and international trade economist Paul Baker said modelling indicated that the FTA could significantly boost India’s exports to the EU and attract greater foreign investment into India. However, he noted that the EU’s growing emphasis on sustainability, traceability and regulatory compliance could continue to create opportunities for exporters able to meet these standards.

The Joint Apparel Association Forum (JAAF) raised concerns over rules of origin and regional cumulation arrangements involving Indian-origin fabrics and other inputs used by Sri Lankan garment manufacturers. Industry representatives warned that restrictions on such arrangements could further erode Sri Lanka’s apparel competitiveness as Indian exports receive improved tariff access.

The EDB said Sri Lanka would engage with the EU on appropriate cumulation arrangements with India while encouraging exporters to move towards higher-value products, greater value addition and stronger compliance with EU standards.

The consultants said the concerns and recommendations raised by the EDB and apparel industry would be considered in their final study for the European Commission.