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UAE-Sri Lanka to boost trade and investment with new business council
Both nations maintain a steadily expanding relationship spanning investment, trade and tourism
- PUBLISHED: Wed 4 Feb 2026, 4:52 PM
- By:
- Muzaffar Rizvi
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The UAE and Sri Lanka appear set to further strengthen their bilateral ties through increased diplomatic engagements, including high‑level visits and joint committee meetings planned for 2026. Both nations have maintained a steadily expanding relationship spanning investment, trade, tourism, labour cooperation, and humanitarian partnership since establishing diplomatic relations in 1972.
Experts and analysts believe that bilateral trade will expand following the signing of a memorandum of understanding to establish a new joint business council, aimed at increasing bilateral trade beyond $1.7 billion and focusing on sectors such as renewable energy and logistics. The establishment of the UAE–Sri Lanka Joint Business Council is expected to enhance commercial collaboration and institutionalise economic dialogue.
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Investment is also expected to rise under the 2025 Reciprocal Promotion and Protection Agreement, which aims to attract UAE funds into Sri Lanka’s infrastructure and tourism sectors. This agreement reflects both countries’ commitment to strengthening long‑term economic cooperation and establishing a secure legal framework to encourage Emirati investment in Sri Lankan industries ranging from logistics to energy and tourism.
On the cultural front, both countries are committed to exchanging delegations to promote art, film, and heritage events to deepen people‑to‑people connections, supported by platforms like Invest Sri Lanka 2026.
“Cultural ties are reinforced through sustained UAE humanitarian assistance — from disaster relief to community development projects — strengthening people‑to‑people links and goodwill. Together, these initiatives reflect a dynamic and multifaceted partnership rooted in mutual economic opportunity and long‑term cooperation,” an expert noted.
The UAE and Sri Lanka have fostered strong bilateral ties during the past five decades. Diplomatically, both nations maintain embassies and collaborate in international forums such as the UN, emphasising mutual support on global issues.
Trade relations remain strong, with Sri Lanka exporting tea, gems, spices, and apparel to the UAE, while importing petroleum products and machinery. Both nations are exploring deeper cooperation in logistics, energy, textiles, and tourism — signalling a diversified trade agenda poised for continued expansion.
CEPA and Tourism
Tourism is another key pillar, with the UAE expressing interest in boosting high‑end and eco‑friendly tourism investments in Sri Lanka, supported by improved connectivity and infrastructure development. Sri Lanka has recently taken several initiatives to increase arrivals from the UAE, with the Sri Lanka Tourism Promotion Bureau regularly participating in the Arabian Travel Market to attract visitors from the region.
The Sri Lankan government is streamlining investment approvals and incentives to make the country a predictable and competitive destination for foreign capital.
“Sri Lanka is offering tax holidays of up to 15 years and positioning Colombo Port City as a new financial and trade hub as it seeks to attract UAE investors amid renewed political and economic stability,” an official said.
The UAE is Sri Lanka’s largest trading partner in the Middle East, and both nations are further strengthening ties through a proposed Comprehensive Economic Partnership Agreement (CEPA) to boost investments in tourism, logistics, and IT, the official added.
The Sri Lankan community in the UAE, numbering around 350,000, is the second‑largest Sri Lankan diaspora worldwide, with nearly one‑third employed in white‑collar positions. The UAE has become a second home for many Sri Lankan expatriates, with skilled professionals holding senior roles in engineering, banking, insurance, hospitality, culinary arts, architecture, and quantity surveying. Additionally, Sri Lanka continues to send a significant number of semi‑skilled workers to the UAE.
“Instead of sending unskilled employees, Sri Lanka is now focusing on supplying a skilled professional labour force to the UAE, and bilateral discussions are underway to support this initiative,” an official said.
