Sri Lanka IT BPO export revenue is likely understated in official statistics following the economic crisis, according to industry leaders. A significant share of sector income is being earned overseas or recorded as remittances rather than formal service exports.
Sri Lanka IT BPO export revenue gap linked to remittances and offshore billing
Sri Lanka’s IT and business process outsourcing sector is generating higher export earnings than reflected in official figures, with industry experts pointing to structural and policy-driven distortions in how revenue is recorded. According to sector leaders, a combination of offshore invoicing, remittance inflows, and freelance activity has widened the gap between reported and actual earnings since the 2022 financial crisis.
Shehani Seneviratne, Chairperson of the Sri Lanka Association for Software and Services Companies (SLASSCOM), said official export data relies heavily on foreign exchange inflows recorded through the Central Bank. In contrast, the industry’s true economic contribution is better measured by the number of professionals delivering export services and the value they generate for overseas clients.
She explained that discrepancies emerged as foreign exchange constraints and policy limitations reshaped how firms structured their operations during the crisis period. Many IT and BPM companies responded by establishing overseas branch offices to protect cash flows and ensure uninterrupted client billing.
As a result, international customers are often invoiced through offshore entities, with revenues recognised outside Sri Lanka rather than repatriated through the domestic banking system. This has reduced the amount of export income captured in official balance-of-payments statistics, even though the underlying services continue to be delivered by Sri Lankan talent.
Industry analysts note that several firms expanded or relocated operational functions to regional hubs such as Singapore and Dubai after 2022. These jurisdictions offer more predictable financial frameworks and fewer capital movement restrictions, making them attractive for international contracting and revenue management.
Seneviratne also identified the rapid expansion of the freelance workforce as another contributor to the reporting gap. Over the past two years, thousands of Sri Lankan technology professionals have begun offering services directly to global platforms and foreign clients. Much of this income enters the country as personal remittances rather than being classified as export earnings under services.
The classification issue has broader implications for how policymakers assess the sector’s performance and potential. While remittances support foreign exchange inflows, they do not fully capture the scale or sophistication of the country’s knowledge-based exports.
Analysts argue that Sri Lanka’s restrictive capital and financial account framework has played a central role in shaping these outcomes. Unlike financial centres such as Singapore or Dubai, Sri Lanka maintains controls on outward profit repatriation and capital flows, a system rooted in decades-old monetary policy structures.
According to critics, successive governments were persuaded to impose partial or full exchange controls in the name of macroeconomic management, discouraging multinational firms from operating seamlessly within the country. These constraints, they say, pushed globally connected industries like IT and BPO to seek operational flexibility elsewhere.
Despite these challenges, the sector remains one of Sri Lanka’s most promising export engines. The IT and BPM industry is characterised by a high value-added profile, limited dependence on physical inputs, and strong scalability driven primarily by human capital.
Seneviratne emphasised that the sector’s core inputs are skilled professionals and basic technology infrastructure, making it less vulnerable to supply chain disruptions than traditional export industries. This structure positions the industry as a key driver of long-term export diversification and income growth.
Official figures from the Export Development Board show that ICT and BPM export revenue grew by 8.8 percent in 2025, reaching 1.645 billion US dollars. While the increase indicates resilience amid economic recovery, industry leaders believe the number significantly understates the sector’s true earnings capacity.
According to Seneviratne, the reported figure falls well short of the industry’s potential, particularly given the scale of talent embedded within Sri Lanka’s technology workforce and the growing demand for digital services globally.
She noted that with appropriate policy reforms, clearer foreign exchange rules, and improved capital account flexibility, a larger share of export revenue could be formally recognised within Sri Lanka. Such changes, she argued, would improve data accuracy, investor confidence, and the sector’s contribution to macroeconomic stability.
As Sri Lanka looks to strengthen external earnings and reduce vulnerability to traditional export cycles, analysts say accurately capturing Sri Lanka IT BPO export revenue will be critical to shaping informed policy decisions and unlocking the industry’s full economic value.