Sri Lanka's Vehicle Import Ban Eases: Will Affordability Be a Barrier?

Sri Lanka plans to ease a vehicle import ban which was put in place due to an economic crisis that led to severe foreign currency shortages and public unrest. From February 1, imports of buses, trucks, and utility vehicles will be permitted, with hopes of also allowing private cars and other vehicles soon. However, many Sri Lankans face challenges in affording new cars due to high prices, driven by scarcity, a weak currency, and increased taxes. In 2022, the country experienced significant economic turmoil, leading to a presidential ousting and negotiations for a $2.9 billion IMF bailout. Experts believe the import ban lift could re-energize the economy by boosting government revenue and creating jobs in related sectors. However, officials caution against a surge of imports that could further deplete foreign reserves. The absence of domestic car manufacturing means nearly all vehicles are imported, with rising interest in electric vehicles, especially from China. Prices for used cars have skyrocketed, while taxes on imports have increased to as high as 300%, making new cars unaffordable for many. Teachers, drivers, and small business owners express dismay at the doubling of car prices, reflecting on the necessity of vehicles in a country with limited public transport.