Sri Lanka needs to improve its investment climate to attract greater Indian investment, particularly in ports and logistics, energy and shipbuilding, Indian High Commissioner to Sri Lanka Santosh Jha said on Friday (9).
Speaking on Ada Derana’s Hyde Park programme, Jha said: “There is not a very high level of interest among Indian investors in investing in Sri Lanka. Investors generally tend to invest in sectors that offer attractive and lucrative opportunities. In Sri Lanka, there is a significant investment potential in ports and logistics, tourism, industrial, energy as well as the country’s natural harbour. These sectors could attract investors willing to invest in the country. Sri Lanka would need to work harder in other sectors, because it's a competitive world.”
“Sri Lanka needs to provide foreign investors with necessary dispensations and confidence to ensure they can operate in a free and fair environment,” he said.
“The country has made progress in terms of certain institutional arrangements that the government administration is putting up,” he said, citing the establishment of the National Business Facilitation Centre (NBFC) and the restructuring of the Board of Investment (BOI) as positive steps.
“However it would be premature to expect significant investor interest, which needs further improvements,” Jha said.
He said: “Despite challenges, there is great potential in Sri Lanka as a regional energy hub. We are trying to get work on Trincomalee to be developed as an energy hub. We are looking at a grid interconnection between India and Sri Lanka, where the country would be able to export large quantities and increase its export earnings.”
“Sri Lanka has considerable energy potential through solar power, wind potential. If we connect the country to the Indian grid, the country will have growth in the energy production ecosystem, and the energy cost will also come down,” he said.
Jha said: “Colombo Dockyard has submitted a proposal to the BOI and received approval to conduct a feasibility study for a large-scale ship building yard in Trincomalee. Developing shipbuilding and ship repair ecosystems could further expand economic benefits. Economic development should extend beyond Colombo to other regions to gain prosperity as a country.”
“India had been a major investor in Sri Lanka. In 2025, 50% of the investment that came to the country came from either India or from Indian companies through third countries. And, they have come in sectors that are already well defined,” he said.
According to the High Commission of India, Indian investments in Sri Lanka exceed $ 2.8 billion in Foreign Direct Investment (FDI) as of 2026.
Further he said: “There are areas that are naturally restorative in Sri Lanka, and that investors will want to come. Also they will come even more and much ready to engage if the conditions for their investments are improved, which is a constant process.”