Sri Lanka’s IT-BPO sector might be generating significantly more revenue than official export data reflects. Industry leaders say offshore invoicing, remittance-based inflows, and the rise of freelance tech work are masking the sector’s actual economic impact.
Since the 2022 financial crisis, offshore relocations, remittance rules, and FX controls have understated one of Sri Lanka’s most resilient, high-value export sectors. Experts warn that such a statistical gap could lead policymakers to underestimate its role as the country seeks sustainable sources of foreign exchange and long-term economic growth.
Offshore billing structures understate export earnings
A major source of the discrepancy is the relocation of billing and revenue recognition outside Sri Lanka. To manage exchange-rate risks and ensure business continuity during the crisis, many IT and BPO firms established overseas companies in hubs such as Singapore and Dubai.
Although Sri Lankan–based teams continue to deliver services, invoices are often issued through these offshore companies. That means revenue is recorded abroad and excluded from Sri Lanka’s official export statistics.
“There is a bit of a discrepancy in what is reported by the Central Bank,” said Shehani Seneviratne, Chairperson of the Sri Lanka Association of Software and Service Companies (SLASSCOM), speaking at a forum in Colombo. “They invoice and recognize revenue in other locations so that revenue doesn’t actually come into Sri Lanka.”
Although some of these earnings eventually flow back into the country as employee salaries or personal transfers, they are not classified as export income, thereby underrepresenting the sector’s actual contribution.
Freelance growth and FX controls add to the data gap
The rapid expansion of Sri Lanka’s freelance technology workforce compounded the reporting shortfall. Thousands of professionals now provide services directly to global clients, with income typically entering the country as personal remittances rather than being classified as service exports.
Seneviratne attributed this trend to long-standing foreign-exchange and capital-account restrictions. Unlike regional competitors such as Singapore and Dubai, Sri Lanka does not operate an open capital and financial account. This framework, in place for decades, includes exchange controls and profit repatriation restrictions that complicate operations for globally connected firms.
Despite these challenges, the IT-BPO sector continues to grow. Export Development Board data shows ICT and business process management export revenue rose 8.8% in 2025 to $1.65 billion. However, industry leaders argue the actual figure is far higher.
“The IT-BPM industry has a lot of potential, especially because it’s one of the most value-added industries,” Seneviratne said, noting that its primary inputs are skilled talent and basic technology infrastructure.
Policy reform could unlock full export potential
Analysts say easing capital controls and modernizing foreign exchange rules would allow more IT-BPO earnings to be formally recorded in Sri Lanka. With limited physical input requirements and strong global demand for digital services, the sector remains well-positioned to drive export expansion.
Sri Lanka’s ICT sector could realistically achieve its target of $3 billion in export revenue and contribute $15 billion to the digital economy by 2030. These goals may be more achievable if national reporting mechanisms better reflect actual inflows.
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Macayan, D. (2026, February 11). Sri Lanka IT-BPO exports underreported amid policy gaps. Outsource Accelerator. Retrieved from https://news.outsourceaccelerator.com/sri-lanka-it-bpo-exports/
U.S. International Trade Administration. (2024, May 8). Sri lanka Country Commercial Guide. Retrieved from https://www.trade.gov/country-commercial-guides/sri-lanka-telecommunications-and-information-technology
