COLOMBO – Sri Lanka’s official IT and Business Process Management (BPM) export figures are failing to capture the industry’s true scale, as rigid exchange controls and the 2022 financial crisis drive revenue offshore, industry leaders warned Friday (6).
While the Export Development Board (EDB) reported a 8.8% growth in ICT/BPM revenue to $1,645 million in 2025, experts argue these figures represent only a fraction of the actual economic activity generated by the sector.
Speaking at a forum in Colombo, Shehani Seneviratne, Chairperson of the Sri Lanka Association for Software and Digital Service Companies (SLASSCOM), highlighted a growing discrepancy in Central Bank reporting, noting that the 2022 economic collapse triggered a corporate exodus, with local firms establishing offshore entities in business-friendly hubs.
“Many firms now invoice their global clients from offshore companies in locations like Singapore and Dubai,” Seneviratne said, explaining, “Because the revenue is recognized in those locations, the full value doesn’t actually enter the Sri Lankan banking system as export proceeds.”
Instead, these companies remit only what is necessary to cover local operations and salaries. This shift has reclassified what was once “export service revenue” into “worker remittances”, distorting the national balance of accounts.
Beyond corporate restructuring, Seneviratne pointed to a “rapidly growing freelance community” as a primary driver of the data gap. Facing domestic “policy constraints” and foreign exchange instability, many independent tech professionals choose to maintain earnings in offshore accounts or receive payments through informal channels.
The root of the issue, according to economic analysts, lies in Sri Lanka’s restrictive Capital and Financial account. Unlike the open economies of Singapore or Dubai, Sri Lanka’s central banking framework has historically relied on exchange controls to manage liquidity.
“These controls, often intended to prevent capital flight, have ironically become the primary deterrent for global firms seeking a smooth operational environment, effectively blocking the transparent repatriation of profits,” one analyst noted.
The IT/BPO sector remains one of Sri Lanka’s most resilient and efficient economic engines. Unlike manufacturing, which requires heavy raw material imports, the tech sector’s primary inputs are talent and basic hardware.
“It is one of the most value-added industries we have,” Seneviratne said. “The input is simply human intelligence and hardware. The potential is far beyond what the current data reflects, but we need the right policy environment to bring that value home.”
-ENCL/EN
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