China surpassed India as Sri Lanka’s largest trade partner in 2025 by $40 million, with electric and hybrid vehicle imports widening the trade deficit with China to $4.9 billion.
China overtook India as Sri Lanka’s largest trade partner in 2025, the Central Bank’s Annual Economic Review shows, with total trade reaching $5.46 billion against India’s $5.42 billion, “supported largely by vehicle imports,” the review notes.
The review attributes the high trade figures with both India and China to vehicle imports, which widened the trade deficit with China to $4.9 billion. Two years earlier, in 2023, that deficit stood at $2.8 billion, less than half of what it is in 2025.
Chinese vehicles accounted for 8% of newly registered cars in 2025, up from being “virtually absent” in previous years, according to JB Securities analysis reported in the Daily FT. Indian vehicles held the same 8% share, down from 51% in 2015.