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Economy

Court of Appeal Restores Order in Tuk-Tuk Licence Dispute

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Sri Lanka prides itself on being governed by law, not by press conferences. That principle was reaffirmed on 19th February 2026, when the Court of Appeal intervened in the escalating controversy over whether foreign tourists may lawfully drive tuk-tuks in Sri Lanka using International Driving Permits together with covering permits issued under Sri Lankan law.

In C.A. (Writ) 1154/25, Hon. Justice Dhammika Ganepola and Hon. Justice Adithya Patabendige granted Interim Orders preserving the existing legal framework and restoring the position that prevailed before media reports on or about 20th November 2025 suggested that foreign visitors could no longer drive tuk-tuks on the strength of International Driving Permits.

Sri Lanka is a Contracting State to the 1949 Geneva Convention on Road Traffic. The Convention is founded on reciprocity: member states recognise each other’s International Driving Permits to ensure uniform and predictable cross-border mobility. To give domestic effect to these obligations, Sri Lanka enacted regulations through Gazette No. 11,603 of 1958 under the Motor Car (Convention) Ordinance – regulations that remain valid and in force.

Under that statutory framework, a foreign visitor holding a valid International Driving Permit may lawfully drive in Sri Lanka upon obtaining a local covering permit issued either by the Department of Motor Traffic or by the Automobile Association of Ceylon, which is expressly designated by law for that purpose.

This is not an administrative concession. It is the governing legal scheme.

For decades, tourists have driven tuk-tuks under this regime without controversy. Businesses, such as the Petitioner in this case, have structured operations around it. Hundreds of Sri Lankan families depend on it for livelihood. The framework reflects not only domestic regulation but Sri Lanka’s commitment to international comity –  the mutual respect of rights arising under treaty obligations.

When the matter came before Court, the Bench held that a serious question of public law arises as to whether the impugned decision was made within statutory authority or contrary to the governing legal framework. The Court further held that permitting the directive to operate pending final determination would adversely affect existing permits and business operations, whereas interim relief would merely preserve the status quo ante.

Accordingly, Interim Orders were granted.

The legality of the purported directive will now be tested in Court. Until that determination is made, the law as it stands continues to govern.

Mr. Avindra Rodrigo, President’s Counsel, with Ashiq Hassim and Nishika Fonseka appeared for the Petitioner. Mr. Sanjay Rajaratnam, President’s Counsel, with Edward Jayasinghe appeared for the Automobile Association of Ceylon. Ms. Avanthi Weerakoon, State Counsel, appeared on behalf of the State Respondents, including the Commissioner General of Motor Traffic and the Inspector General of Police.

Economy

Sri Lanka Secures US$695 Million IMF Tranche

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Sri Lanka has secured another US$695 million from the IMF after the completion of the fifth and sixth reviews of the country’s reform programme.

The IMF says Sri Lanka’s reform performance remains “generally strong” despite global challenges, but warned that the Middle East conflict and Cyclone Ditwah pose risks to economic recovery.

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Economy

IMF Says Sri Lanka’s Policy Framework StrongerThan In The Past

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IMF mission chief Evan Papageorgiou painted a firmer, more confident picture of Sri Lanka’s economic policy framework as the Fund’s Executive Board prepares to consider the combined Fifth and Sixth Reviews of the country’s Extended Fund Facility (EFF) on Wednesday, 27 May.

“Sri Lanka’s reform program continues to move forward,” Papageorgiou said, stressing that “Sri Lanka’s policy framework today is considerably stronger than in the past.”

The IMF view, voiced at a critical moment for the island’s finances , frames the coming Board decision as a test of whether progress on macro stability, reserve rebuilding and investor confidence will translate into continued financial support.

The Executive Board’s decision could unlock the sixth and seventh tranches of the EFF, together worth about USD 700 million.

IMF mission chief Evan Papageorgiou said that the authorities’ recent progress in restoring macroeconomic stability and rebuilding reserves has been recognised by the public, investors and stakeholders.

Global shocks continue to pose renewed pressures, but the Fund emphasised that a stronger policy stance means Sri Lanka is better placed to navigate them.

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Economy

Sri Lanka’s exports surpass US$ 5.7b in first four months of 2026

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Sri Lanka’s total exports, comprising both merchandise and services, reached US$ 1,380.93 million in April 2026, recording a year-on-year growth of 6 % compared to April 2025.

According to provisional data released by Sri Lanka Customs, together with estimated figures for Gems & Jewellery and Petroleum Products, merchandise exports in April 2026 increased by 9.87% to US$ 1,063.77 million.

Earnings from services exports were estimated at US$ 317.16 million in April 2026, underscoring the growing importance of the services sector in driving Sri Lanka’s overall export performance.

On a cumulative basis, total exports for the period January to April 2026 are estimated at US$ 5,784.38 million, reflecting a growth of 4.3 % over the corresponding period in 2025.

Overall, the positive export performance recorded during the first four months of 2026 highlights the resilience of Sri Lanka’s external sector. Sustained export earnings, supported by stable merchandise trade and the growing contribution of services exports, indicate a steady and encouraging recovery trajectory for the Sri Lankan economy in 2026.

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