The long-anticipated Free Trade Agreement (FTA) between Sri Lanka and Thailand is set to be implemented on January 1, 2025, according to Thai Ambassador to Sri Lanka, Paitoon Mahapannaporn. Speaking at the Annual General Meeting of the Thailand-Sri Lanka Cultural Association in Colombo, the Ambassador confirmed that all necessary documentation has been finalized, and both governments are prepared to move forward with the agreement as scheduled.
This will be Sri Lanka’s fourth FTA, following agreements with India, Pakistan, and Singapore. Similar agreements with Bangladesh and China are currently in the pipeline.
The Ambassador noted that bilateral trade between Sri Lanka and Thailand has experienced a decline in recent years, and the FTA is expected to reverse this trend by providing Sri Lankan entrepreneurs with enhanced access to the Thai market through favorable tax concessions. The agreement is also likely to attract increased Thai investment into Sri Lanka.
In 2023, Thailand ranked as Sri Lanka’s 39th export market, with total exports amounting to USD 47 million— a 20% drop compared to 2022. Precious and semi-precious stones were the top export, comprising 52% of the total value of Sri Lankan exports to Thailand. Other significant exports included wheat or meslin flour, electrical capacitors, apparel, crustaceans, tea, and activated carbon.
Additionally, the Ambassador highlighted Thailand’s decision to offer visa-free travel to tourists from numerous countries, including Sri Lanka, which has contributed to a rise in Sri Lankan tourism to Thailand. This policy is set to continue through 2024, with no termination date yet announced.
Looking ahead, the FTA is projected to boost Sri Lankan exports and services to Thailand by 10% in its first year. When the agreement takes effect, it will liberalize approximately 50% of tariff lines, creating new opportunities for trade and economic collaboration between the two nations.
