The Sri Lankan government has announced a partial relaxation of its long-standing ban on vehicle imports, a move seen as a step toward economic recovery after a crippling financial crisis.
However, while buses, trucks, and utility vehicles will now be allowed in from February 1, many citizens fear that private car ownership will remain out of reach due to skyrocketing prices and steep import taxes.
The lifting of restrictions has been widely welcomed by businesses that depend on transportation, such as logistics companies and public transport operators.
But for ordinary Sri Lankans, who have been waiting for years to buy a car or even a three-wheeled taxi, the decision has done little to ease their frustration.
The island nation, which imports nearly all its vehicles, has seen used car prices triple since the ban was imposed in 2022.
Even if the government eventually allows private car imports, affordability remains a major challenge. The Sri Lankan rupee has weakened significantly, and the government has introduced excise duties of up to 300% on imported vehicles, along with an 18% Value Added Tax (VAT).
“We have been waiting to purchase a vehicle for a long time,” said R. Yasodha, a schoolteacher.
“But if we calculate the tax and the price, the cost of an average-sized car has doubled from 2.5 million rupees ($8,450) to five million rupees. It would cost a fortune for us.”
The import ban was originally imposed when Sri Lanka suffered its worst economic meltdown in history.
A severe shortage of foreign currency left the country unable to pay for essentials like fuel, medicine, and food. As the crisis worsened, mass protests led to the ousting of then-President Gotabaya Rajapaksa.
Since then, the government has secured a $2.9 billion bailout from the International Monetary Fund and implemented austerity measures, including tax hikes and subsidy cuts.
These policies have helped stabilize the economy, allowing authorities to cautiously ease import restrictions.
“The vehicle imports will not only increase the government’s revenue but will also trigger other economic activities like car financing, dealership sales, and servicing, creating jobs,” said Murtaza Jafeerjee, chair of the Colombo-based economic think tank, Advocata.
However, government officials remain wary of a sudden flood of imports that could strain foreign reserves.
Information Minister Nalinda Jayatissa emphasized that Sri Lanka is “moving very cautiously because we don’t want a surge of imports that will deplete our foreign reserves.”
For many Sri Lankans, the need for a vehicle is more than a luxury—it is a necessity in a country with a weak public transport system.
Gayan Indika, who provides cars for weddings and works as a part-time cab driver, said he is struggling to make a living without a reliable vehicle.
“I want to buy a new car so that I can do my work and resume my private cab rental. Without a car, without mobility, I am losing a lot of revenue,” he lamented.
Meanwhile, Chinese electric vehicles are gaining attention as an alternative, but their affordability remains questionable due to high import duties.
The Sri Lankan central bank has announced plans to allocate up to $1 billion for vehicle imports this year, but the funds will be released gradually. Until then, while businesses may benefit from the easing of restrictions, the dream of car ownership remains a distant one for most Sri Lankans.
