Sri Lanka has announced a phased plan to lift the ban on vehicle imports, with full implementation expected by February 2025.
In the first phase, beginning October 1, the importation of public transport vehicles will be allowed. This will be followed by commercial vehicle imports starting on December 1. The final phase, commencing on February 1, 2025, will permit the import of motor cars for private use, according to an official statement.
All vehicle imports will be restricted to those manufactured within the last three years. The reintroduction of imports is anticipated to boost economic activity, particularly by increasing government revenue, as vehicle imports have historically been a significant income source for Sri Lanka.
However, due to the potential strain on foreign exchange reserves, additional customs duties will be imposed to mitigate the economic impact. The island nation faced a severe economic crisis in April 2022, with depleted foreign reserves leading to its first-ever sovereign default. The gradual reintroduction of vehicle imports aims to balance economic recovery with the need for foreign currency management.