Sri Lanka developed little industry under British rule,
relying instead on the proceeds from agricultural exports to buy
manufactured goods from other countries. Most industry during the
colonial period involved processing the principal export
commodities: tea, rubber, and coconut. Although these sectors
remained important, in the 1980s there was a much greater variety
of industrial establishments, including a steel mill, an oil
refinery, and textile factories.
Industrial diversification began in the 1960s with the
production of consumer goods for the domestic market. This trend
was a consequence of government measures aimed at saving foreign
exchange, which made it difficult to import many items that had
previously been obtained from overseas. Heavy industries were
established in the late 1960s, mostly in the state sector. During
the 1970-77 period the state assumed an even greater role in
manufacturing, but after the economic reforms of 1977 the
government attempted to improve prospects for the private sector.
The fastest growing individual sector in the 1980s was textiles,
which made up approximately 29 percent of industrial production
in 1986. The textiles, clothing, and leather products sector
became the largest foreign exchange earner in 1986. Over 80
percent of the manufacturing capacity was concentrated in Western
Province, particularly in and around Colombo.
Data as of October 1988