Sri Lanka can drive investment through labour reforms: Invest India former CEO

INVEST India former Managing Director and CEO Deepak Bagla recently stressed that effective labour reforms are essential for Sri Lanka to attract foreign direct investment (FDI) and export development strategy to its export sector.

- BY CHARUMINI DE SILVA

Delivering the keynote address at a webinar jointly organised by the Daily FT, Association of Chartered Certified Accountants (ACCA), the International Chamber of Commerce Sri Lanka, Women in Management (WIM), SLASSCOM, the Sri Lanka Institute of Directors, the MBA Alumni Association of the University of Colombo, and the Employers’ Federation of Ceylon, Bagla drew on India’s own experience in easing labour regulation to highlight the powerful link between labour market reform, productivity, and investor confidence.

"Whenever we engaged with global investors, questions on labour laws and skill availability consistently ranked among the top three concerns when making investment decisions even above issues such as economic growth or geopolitics," he said.

He acknowledged Sri Lanka's strong skill base as a comparative advantage in the region, noting that if this was supported with progressive labour regulation and a predictable operating environment, the country could unlock far higher productivity and competitiveness.

"Labour productivity, efficiency, and mobility are fundamental to a country's competitiveness," he noted.

Drawing on India's outreach to its global diaspora, Bagla said Sri Lanka could do far more to mobilise its overseas community, many of whom hold influential positions worldwide.

"Prime Minister Narendra Modi made engaging the Indian diaspora a major priority, ensuring they were connected with the local economy in practical ways. Sri Lanka, too, can adopt a similar approach to unload resources, networks, and expertise," he said.

Drawing on India's own reforms, Bagla highlighted how complex, outdated, and fragmented labour laws had once hindered investments there, whilst elaborating on how simplifying and modernising labour laws as well as enforcing them effectively had a direct positive impact on their FDI inflows, economic growth, and job creation.