Sri Lanka is poised to ease the ban on certain vehicle imports, signaling a return to normalcy after a severe economic crisis led to the ousting of a president.
Starting February 1st, the country will allow the importation of buses, trucks, and utility vehicles, with expectations of gradually lifting restrictions on other vehicle types. Local residents eagerly anticipate the potential relaxation of the ban on private cars, sports utility vehicles, and three-wheeled trishaws commonly used as taxis.
However, due to the scarcity of new vehicles, weak currency, and high taxes driving up prices, concerns linger about affordability for the average consumer.
In 2022, Sri Lanka faced a severe foreign currency shortage for the first time in its history, resulting in difficulties meeting creditor obligations and severe shortages of fuel, food, and medicine.
Subsequently, massive anti-government protests led to the downfall of then-President Gotabaya Rajapaksa, paving the way for a $2.9bn (£2.3bn) IMF bailout and the implementation of austerity measures by his successor to stabilize the economy.
The recent decision to lift the vehicle import ban has sparked excitement among Sri Lankans eager to purchase new vehicles after years of restrictions.
Murtaza Jafeerjee, chairman of Advocata, a Colombo-based economic think tank, welcomed the move, emphasizing its potential to boost government revenue and stimulate economic activities and job creation in the automotive sector.
On the other hand, Nalinda Jayatissa, the country's information minister, expressed caution about avoiding a sudden surge in imports that could deplete foreign reserves.
With Sri Lanka heavily reliant on vehicle imports from countries like Japan, India, and newly emerging interest in Chinese cars, the ban's impact has driven up prices of used cars significantly.
The tightened restrictions have posed challenges for individuals like Gayan Indika, who rely on vehicles for their livelihood, while others, such as software professional Sasikumar, stressed the critical role of cars in a country with limited public transport infrastructure.
Despite the potential easing of the ban, concerns remain about affordability, given steep excise duties, VAT, and the depreciation of the Sri Lankan rupee against major currencies, leading to a significant uptick in vehicle costs.
Overall, the issue of vehicle imports in Sri Lanka underscores the delicate balance between economic recovery, affordability, and the need for sustainable transport solutions in the country.