Celebrating $ 500 million FDI: Drop in the ocean compared to our neighbours

THE Government initially claimed it had secured § 3.8 billion in committed FDI. When questioned by MP Harsha de Silva, this figure was quietly revised down to $ 1.8 billion. Now, it claims that Sri Lanka attracted $ 500 million in FDI in the first half of 2025.

- By Nadarajah D.S.

While any FDI inflow is welcome for a country emerging from an unprecedented economic crisis, celebrating this modest figure is not only premature — it risks breeding complacency and misjudging the true scale of the challenge ahead. Pity the BOI Chairman does not get this!

Context matters

A closer look reveals why this figure should not be a source of national pride: India regularly attracts $ 10-15+ billion per quarter, driven by its massive market, improved infrastructure, and targeted incentives like the Production Linked Incentive (PLI) schemes. Vietnam brings in $ 5-8 billion per quarter, boosted by global supply chain diversification and a stable, pro-business climate. Indonesia and Bangladesh attract multi-billion-dollar annual FDI, leveraging their large populations and sectoral strengths (e.g., textiles in Bangladesh, natural resources in Indonesia). Even smaller economies like Cambodia, the Philippines, and Singapore ($ 60 billion annually) attract comparable or significantly higher inflows relative to their size. Against this backdrop, Sri Lanka’s $ 500 million in H1 2025 — roughly $ 1 billion annually — falls significantly short of the level required for transformative recovery.

The real questions