Located next to downtown Colombo with a scenic sea face, Port City Colombo is a state-of-the-art Special Economic Zone (SEZ) designed to serve as an international financial centre combining business and leisure.
Just 646 km from Chennai, 1,525 km from Mumbai, and 2,395 km from New Delhi, Port City Colombo is strategically positioned for Indian businesses. Within a five-hour flight radius, Port City Colombo connects to over 1.7 billion people across South Asia, Southeast Asia, and the Middle East.
Port City Colombo offers Indian investors access to a vast consumer base and leverages Sri Lanka’s free trade agreements, including those with India, Singapore, and Thailand, covering a combined market of over $850 billion. The time zone is aligned with Indian and East Asian markets, enhancing operational efficiency.
Strategic advantages for Indian firms
India’s strong economic ties with Sri Lanka —bolstered by $4.5 billion in aid during the 2022–23 crisis and recent MoUs on energy, defence, and trade — create a favourable investment climate. Sri Lanka, as India’s closest neighbor, demonstrates several hallmarks that support strengthened relations in cross-border investment facilitation, which encompass cultural similarity, a talent pool of skilled professionals, and profitable locality.
Prime Minister Modi’s April 2025 visit provided a richer context to the close relationship that India and Sri Lanka presently share, whilst underscoring the twin objectives of both nations to shape the regional economy.
As India aims to become the world’s second-largest economy by 2075 and a formidable global player, Sri Lanka increasingly demonstrates its instrumental role as a strategic partner in trade and commerce for Indian investors.
Indian companies have already invested over $80 billion in outbound FDI from 2000 to 2023. In Sri Lanka, Indian FDI reached $2.25 billion by 2023, with active sectors including energy (Lanka IOC), telecom (Bharti Airtel), and hospitality (Taj Hotels). Adani’s $700 million investment in the Western Terminal adjacent to Port City Colombo reflects confidence in Colombo’s port infrastructure.
Leading Indian firms such as Tata, Reliance, Adani, and Mahindra & Mahindra have the capital and expertise to undertake large-scale projects in Port City Colombo across real estate, logistics, and renewable energy.
For instance, Adani Ports’ global presence can align with Port City Colombo’s vision as a logistics hub, while Adani Green Energy could support Port City Colombo’s sustainability goals.
India’s 63 million MSMEs — contributing 30% to GDP and 45% to exports — are expanding globally, supported by government initiatives such as the Export Promotion Capital Goods (EPCG) scheme. Sectors such as IT, textiles, and manufacturing are ripe for the Colombo Port City Special Economic Zone’s model.
High net worth investors and individual investment
India had over 305,000 HNWIs in 2023 with a combined wealth of $1.2 trillion, many of whom are investing in overseas real estate, hospitality, and retail. Port City Colombo’s premium lifestyle ambiance, coupled with attractive tax policies and visa options, make it a strong contender.
Under the Reserve Bank of India’s Liberalised Remittance Scheme (LRS), individuals can invest up to $250,000 annually abroad, enabling smaller Indian investors to enter CPC’s real estate and retail sectors.
Indian brands such as The Leela Palaces and Oberoi Group are well positioned to capitalize on Port City Colombo’s land parcels earmarked for hospitality and resort infrastructure. Similarly, retail giants such as Reliance Retail can benefit from Port City Colombo’s emerging consumer market, which will include the estimated master-planned city’s own population of 273,000 citizens and the much larger city of Colombo that encompasses over 700,000 people within its municipal limits.
Business-friendly environment
The Colombo Port City Special Economic Zone was established with the primary aim of enhancing the ease of doing business in South Asia. Governed by the Colombo Port City Economic Commission as the regulatory authority, this Special Economic Zone provides the opportunity for Indian investors to explore high-value greenfield investments across various sectors – IT/BPM and Trading and Commerce.
Commercial property developers and investors seeking commercial expansion options could register as an Authorised Person, to conduct business within the Colombo Port City SEZ. Businesses of Strategic Importance (BSI’s) enjoy the up to 25 years of tax exemptions, followed by a 50% tax reduction for the next 10 years.
Employees earning in foreign currency benefit from 0% personal income tax. Port City Colombo permits transactions in 16 foreign currencies and has no capital or exchange controls. Full foreign ownership and profit repatriation are allowed. Investors, employees, and their families are eligible for 5–10-year visas, promoting long-term engagement.
A major advantage is the Single Window Facilitation provided by the Colombo Port City Economic Commission (CPCEC), streamlining approvals and reducing red tape. This regulatory clarity enhances ease of doing business and accelerates setup.
Key sectors for investment
Real Estate and Tourism: With Sri Lanka targeting three million tourists in 2025 —contributing USD 5 billion to its economy — Port City Colombo presents lucrative opportunities in luxury residences, hotels, and serviced apartments. The real estate sector is forecasted to grow at a 7.5% CAGR from 2023 to 2028. Indian developers with global experience can tap into this demand.
Information Technology: As Sri Lanka gears up to achieve the ambitious revenue target of USD 5 billion in the IT industry, Port City Colombo demonstrates the opportunity to emerge as a regional is emerging as a regional IT hub, ideal for Indian tech giants and startups.
The city offers a cost-effective, skilled workforce and startup-friendly incentives, creating a competitive base for Indian firms to scale operations.
Finance and Logistics: Positioned near South Asia’s most efficient port, Port City Colombo has potential as a regional financial and logistics centre. It supports financial services, trade facilitation, and shipping services, aligning with the global ambitions of Indian conglomerates.
Retail and Entertainment: Catering to high-net-worth individuals (HNWI), Port City Colombo showcases prime mixed-use development investment opportunities in retail and lifestyle that illustrate attractive locality and exude luxurious living, especially in the project’s signature Marina District.
Complemented by the upcoming Luxury Yacht Marina – South Asia’s pioneering marina venture, these land development investment opportunities enable Indian investors to explore options to expand retail and commercial infrastructure development beyond the scope of their home region. Sustainable Infrastructure: Port City Colombois designed as a green, pedestrian-friendly city with 27 hectares of parks. With growing demand for medical tourism and international education, planned facilities include an international school, a university, and a healthcare centre — ideal for Indian families seeking premium living abroad.
Legal and financial safeguards
The policies of the Colombo Port City Special Economic Zone incorporate legal and contractual provisions, which provide investment safeguards against negative financial implications due to potential changes in the laws in the future.
The International Alternative Dispute Resolution Centre (IADRC), appointed by the CPCEC, provides alternative dispute resolution services, including conciliation, mediation, adjudication, and arbitration, for a five-year term (from June 1, 2023). This resolves any commercial disputes under SIAC Rules within the area of authority of Port City Colombo.
Indian investors exploring opportunities within the Colombo Port City Special Economic Zone, also benefit from India’s regional influence over multilateral institutions including the Asian Development Bank, which provides instrumental infrastructure funding.
Port City Colombo presents a unique opportunity for Indian investors – whether large conglomerates, MSMEs, or individual HNWIs. Compared to saturated mature hubs including Dubai and Singapore, Port City Colombo provides lower entry costs, higher return potential, and early-mover advantages. More importantly, Port City Colombo is within the sphere of Sri Lanka’s culturally familiar environment, establishing this SEZ as a true ‘home away from home.’ Reinforced by Sri Lanka’s recovering economy, IMF reforms, and strengthened India – Sri Lanka ties, Port City Colombo is poised to become South Asia’s next Foreign Direct Investment hotspot, positioning itself not just as India’s neighbor, but as a partner in progress that could potentially complement and support India’s growth. For Indian businesses, Port City Colombo is more than an investment — it is a strategic foothold in the emerging South Asian economic corridor.
The writer is an independent freelance journalist.
