Sri Lanka is moving toward creating a set of positive incentives that will encourage voluntary repatriation of exporters’ income and conversion in line with global standards and practices.

Of the exports in September 2022 and October 2022, the country’s exporters repatriated or brought 100 per cent of their export earnings back into the banking system.

However, exporters may be utilizing dollars for approved local purchases. These would include the purchase of both diesel and domestically produced raw materials which are required for the industry.Given the current economic milieu in the country, companies use a considerable portion of export proceeds to purchase raw materials, fuel and other items essential for seamless operations in the event of unforeseen crises.

In the case of the apparel sector, the industry refers to a local value addition of 50 per cent. About 25 per cent of export proceedings on an average have been directly converted to rupees by the exporters. Under the existing regulations, exporters are permitted to make outward payments for purchases of raw materials and the remaining proceeds are converted automatically by the respective commercial banks on the seventh day of the following month.In addition to payments made to overseas suppliers, the growth of the local supply chain also means that apparel companies can pay up to 25 per cent of their inward foreign currency remittances to indirect exporters in Sri Lanka.