Hanoi (VNA) – The May 7-8 state visit to Sri Lanka by General Secretary of the Communist Party of Vietnam Central Committee and President To Lam is poised to foster market connectivity, tap potential, and shift bilateral ties toward more substantive cooperation in the years ahead.

Promising partners

According to the Vietnamese Ministry of Industry and Trade (MoIT), Sri Lanka is Vietnam’s fourth-largest trade partner in South Asia after India, Bangladesh, and Pakistan. In recent years, Vietnam has been running a steady surplus, with exports exceeding imports.

Citing data from the Department of Vietnam Customs, the ministry reported that two-way trade neared 215.5 million in 2024 and climbed to about 260 million last year, marking a 20% annual jump. As of March 2026, it hit 50 million USD. Notably, the two countries signed a new Memorandum of Understanding (MoU) on machinery manufacturing cooperation in May.

Vietnam’s main exports to Sri Lanka include apparel, rubber, textile fibres, chemicals, plastics, computers and electronic components, mobile phones with accessories, and seafood. Imports mainly consist of knitted fabrics, textile materials, rubber, and tea.

According to experts, Sri Lanka’s strategic location on major Indian Ocean shipping routes gives it a logistics advantage and access to certain raw materials, while Vietnam brings manufacturing scale and deep global market integration through an extensive network of free trade agreements. As supply chains diversify, both countries are well-placed to become vital links connecting Southeast Asia with South Asia.

Sri Lanka now has 34 active investment projects worth roughly 43 million USD in Vietnam, ranking 64th among 154 countries and territories investing in the country. They span seven of Vietnam’s 21 economic sectors, with processing and manufacturing accounting for 95% of total registered capital across eight projects in seven cities and provinces.

Conversely, Vietnamese firms are showing growing interest in Sri Lanka, especially in logistics, infrastructure, agriculture and renewable energy.

Taking things a step further, the MoIT’s Vietnam Trade Promotion Agency and the Sri Lanka Export Development Board signed a separate MoU on trade promotion, creating a coordinated system to help businesses connect, explore opportunities, and boost bilateral trade.

Broadening cooperation

At the third session of the Vietnam - Sri Lanka Joint Trade Sub-committee, the two sides reviewed progress of their past commitments and noted steady trade improvement. They agreed that substantial untapped potential remains, particularly given the highly complementary structures of their economies.

Sri Lanka made it clear that it wants Vietnamese investment in infrastructure, energy, ICT, electrical and electronics, agricultural processing, logistics and supporting industries. The discussions also covered joint work in 3D printing, quality inspection, software and digital transformation, Ayurveda medicine, and shipbuilding and repair.

Both countries agreed to work on joint initiatives to help businesses integrate more closely into global and regional supply chains, aiming to boost bilateral trade to 1 billion USD.

Speaking at a recent Vietnam–Sri Lanka business forum, Deputy Minister of Industry and Trade Phan Thi Thang said Vietnam stands ready to support Sri Lankan enterprises through trade promotion events, exhibitions, market surveys and business-to-business matchmaking held by the ministry and Vietnam’s representative offices in Sri Lanka.

Participants held direct discussions on product demand, technical standards, maritime and air freight, and supply chain models. Many Sri Lankan firms showed strong interest in Vietnamese agricultural goods, seafood, processed food, construction materials, consumer goods, industrial components and agricultural machinery. Industry associations and companies from Sri Lanka also sought to deepen ties with Vietnamese partners for long-term cooperation.

Events such as Sri Lanka Expo 2026 and bilateral business forums are expected to create more opportunities for companies to find partners, expand markets and build sustainable supply chains. Enhancing direct flights, strengthening logistics links and simplifying trade procedures will also be critical to cutting costs and raising efficiency.

Experts believed that the 1 billion USD trade target is achievable if both sides accelerate business connections, improve the investment climate and effectively leverage existing cooperation mechanisms./.