India has emerged as the largest source of tourists for Sri Lanka, surpassing China in the aftermath of the pandemic, with expectations for continued growth centered around the $15 billion Port City Colombo, a special economic zone (SEZ). This strategic development aims to leverage India’s status as Sri Lanka’s most significant outbound market, targeting business travelers, MICE (Meetings, Incentives, Conferences, and Exhibitions) visitors, and second-home investors.
Thulci Aluwihare, the Deputy Managing Director of Port City Colombo, emphasized the focus on attracting Indian visitors. He anticipates that the number of Indian tourists visiting Sri Lanka will increase from approximately 600,000 last year to 1.2 million by 2030. “We currently have around 90 direct flights linking India and Sri Lanka, and our goal is to draw Indian tourists for reasons beyond leisure,” he remarked.
Port City Colombo represents a new urban development adjacent to Colombo’s existing central business district, created on reclaimed land along the waterfront. Aluwihare believes the introduction of new attractions—such as a two-kilometer beach, a yacht marina, water sports facilities, South Asia’s first downtown duty-free shopping area, conference venues, and a comprehensive entertainment district—will encourage tourists to extend their stays. Presently, the average visitor spends about one and a half days in Colombo.
Furthermore, business travel is projected to be a significant growth area. Aluwihare expressed a desire to attract more Indian IT firms and global capability centers (GCCs), noting that India is the global hub for GCCs. “Port City has the potential to provide a robust business continuity and disaster recovery site for Indian GCCs. While we may not match India’s scale, we can enhance its ecosystem with smaller, specialized operations,” he explained.
Aluwihare pointed out that Sri Lanka’s historical challenge has been its infrastructure, and efforts are underway to expedite the development of event facilities, including an air dome anticipated to be operational by late October or early November, with several events already scheduled.
Additionally, partnerships with organizations such as NASSCOM for off-site events and conferences are being explored. Sporting events also present significant opportunities; Aluwihare highlighted the economic uplift experienced during a high-profile India-Pakistan cricket match hosted by Sri Lanka, which saw a surge in hotel prices and substantial travel from fans of both nations.
He noted that the integrated resort area within Port City has the capacity to host a multi-purpose stadium, contingent upon the developer’s vision, suggesting that cricket could become a key attraction alongside entertainment and gaming options.
In terms of investment, Aluwihare estimates that about 25% of the total funding for Port City will come from Indian investors and companies. He also mentioned that international investors view Port City as a strategic entry point to the Indian market. “One of the first inquiries from Southeast Asian investors is whether Port City offers access to India,” he stated.
“We aim to complement India’s growth narrative,” Aluwihare concluded. “As Indian businesses establish themselves here, we expect tourism, corporate travel, and investment to follow suit.”
