The Ceylon Chamber of Commerce (CCC) says the reduction in the tariff rate from 44% to 30% is a constructive and important first step by the Government toward bringing Sri Lanka’s tariff structure for exports to the US closer to that of regional competitors.

“We encourage continued engagement with the U.S. administration to secure a further reduction by 1 August, especially given that several regional peers are expected to benefit from even lower rates,” it said, in a statement.

The CCC further said that progress in achieving a further reduction will be critical to strengthening Sri Lanka’s position in this key market, maintaining buyer confidence, and supporting sustained trade growth over the long term.

“The Ceylon Chamber stands ready to support the Government’s efforts in this regard through constructive dialogue, industry feedback, and coordinated advocacy,” the statement adds.

Sri Lanka will continue discussions with the United States on the 30% trade tariff, Secretary to the Ministry of Finance – Dr. Harshana Suriyapperuma has said.

Speaking at a media briefing held this morning (July 10), he also urged not to view this situation in isolation, as the whole world faces these tariffs.

Meanwhile, Central Bank Governor Dr. Nandalal Weerasinghe stated during the press briefing that Sri Lanka has secured a reduction in the proposed US tariff rate from 44% to 30% following recent discussions.

He added that this placed the island nation in a relatively advantageous position compared to other nations in the region.

Clarifying on how the tax will be added, Senior Economic Advisor to the President, Duminda Hulangamuwa said that reciprocal 30% tariff proposed by the US President Donald Trump yesterday (09), will be in addition to the existing duties imposed on products exported from Sri Lanka to the US.

Therefore, Sri Lanka will continue to hold discussions with authorities in the US and a meeting is scheduled for next week with the Office of the United States Trade Representative in a bid to further reduce the tariffs proposed by the US President, he added.

Hulangamuwa is also of the view that the apparel sector will be impacted the most, although Sri Lanka is exporting to a niche market in comparison to market competitors – Bangladesh, India and Vietnam.

International relations researcher – Dr. Hasith Kandaudahewa says there is a visible trend of China gradually distancing itself from Sri Lanka since 2023, a process that could accelerate with India’s Mazagon Dock Shipbuilders Ltd. acquiring a majority stake in Colombo Dockyard PLC (CDPLC).

Speaking to the BBC Sinhala Service, Dr. Kandaudahewa has noted that CDPLC’s reputation in global shipbuilding makes the acquisition strategically significant for India, especially when viewed alongside India’s newly opened Vizhinjam International Seaport in Kerala.

This shows that India is steadily strengthening its port infrastructure across the Indo-Pacific and increasing its strategic influence in the Indian Ocean, he has said.

Dr. Kandaudahewa has further pointed out that with China already holding Hambantota Port on a 99-year lease, India’s move to secure the majority stake in CDPLC signals a clear challenge to the Chinese presence in Sri Lanka.

“While China is holding the Hambantota Port on a 99-year lease, India is also trying to show its dominance in Sri Lanka. India is trying to pose a challenge to China by securing a majority stake in the CDPLC. Why, because these two countries are staking their claim to two of the most strategic locations in the same country. Similarly, we are seeing China gradually distancing from Sri Lanka from 2023. The CDPLC seems to be accelerating it even further.”

“In the long term, India is investing in renewable energy programs in Sri Lanka. Even though India may not gain much profit from this, it is trying to further retain Sri Lanka as their closest neighbor.”

Mazagon Dock deal confirmed

The Colombo Stock Exchange has already confirmed that Mazagon Dock Shipbuilders Ltd, a public sector undertaking (PSU) of the Government of India, will acquire a 51% stake in CDPLC currently held by Japan’s Onomichi Dockyard Co. Ltd for USD 52.96 million.

The deal is to be completed in the next 06 months.

Mazagon Dock Shipbuilders Limited, Mumbai, an ISO 9001: 2015 Company is one of the leading shipbuilding yard in India.

Since it was taken over by the Indian government in 1960, Mazagon Dock MDL has built a total 805 vessels including 30 warships, from advanced destroyers to missile boats and 8 submarines.

CDPLC’s major shareholders (2024):

• 51%: Onomichi Dockyard Co. Ltd. (Japan) (to be sold to Mazagon Dock)
• 16.34%: Employees’ Provident Fund (EPF)
• 5%: Sri Lanka Insurance Corporation – General Fund
• 4.92%: Sri Lanka Insurance Corporation – Life Fund
• 3.04%: Sri Lanka Ports Authority
• 2.42%: Employees’ Trust Fund Board
• 1.11%: Bank of Ceylon

(Source: BBC Sinhala)