Sri Lanka’s GSP+ access to the European Union will continue beyond 2027, but the concluded EU-India free trade agreement is expected to erode the advantage Sri Lankan exporters hold in that market, Deputy Minister of Finance and Planning Anil Jayantha Fernando told Parliament on Thursday.

He was answering a question from MP Ravi Karunanayake on the future of Sri Lankan exports to the EU, the Daily Mirror reported. NewsFirst reported the same statement at 3.55 p.m.

The reassurance

The EU has adopted a new GSP regulation covering another 10-year cycle, taking effect on 1 January 2027. Sri Lankan exporters will continue to enjoy preferential access under that framework — but only subject to submitting a new application and obtaining EU approval.

The reapplication window runs from 1 January 2027 to 31 December 2028. The government is working to ensure benefits continue under the new framework, the Deputy Minister said.

The threat

Negotiations on the EU-India FTA concluded on 27 January 2026. The agreement has not yet entered into force and remains subject to internal procedures on both sides; ratification and implementation are expected in 2027.

Once in force, Indian exporters would gain preferential and duty-free access to the EU similar to what Sri Lanka currently enjoys under GSP+ — removing the margin Sri Lankan exporters have relied on and, in the Deputy Minister’s words, affecting the level playing field.

A second, less obvious exposure runs through supply chains. Sri Lanka benefits from regional cumulation provisions, principally by sourcing fabrics from India under the SAARC cumulation rules of the EU GSP framework. The availability and scope of those provisions could be affected once the EU-India FTA is implemented.

NewsFirst adds a detail the Daily Mirror does not carry: a two-year transition period will let Sri Lankan exporters keep using existing regional cumulation arrangements after the FTA takes effect. During that window the government intends to work with trade chambers and industry bodies, including the Joint Apparel Association Forum (JAAF), on competitiveness. Apparel is the sector most exposed, given its dependence on European market access.

The graduation problem

The longer-term risk is Sri Lanka’s own economic progress. GSP+ is a scheme for lower-income countries, and a country classified by the World Bank as upper-middle-income for three consecutive years graduates out of it.

Sri Lanka recorded upper-middle-income status in 2026 — the first of those three years.

That is why the government is examining what comes next. It expects to “examine and report on possible options for securing long-term and sustainable market access to the EU through a deeper economic arrangement, including a possible comprehensive trade agreement”, the Deputy Minister said, in the event Sri Lanka graduates from GSP+.

What is not resolved

The two filings together leave the sequencing unclear. Reapplication for GSP+ must happen between 2027 and 2028; graduation would be triggered by three consecutive years of upper-middle-income classification beginning in 2026, which would fall due around 2028. Neither filing explains how a successful reapplication would interact with graduation, or whether approval once granted runs for the full 10-year cycle.

Neither gives the value of Sri Lanka’s GSP+ exports to the EU, the tariff margin at stake, or any timetable for the comprehensive trade agreement beyond an intention to examine options.