For Sri Lanka, however, the agreement threatens to intensify competitive pressures in precisely those sectors on which the island has long depended for foreign exchange earnings. Erosion of Sri Lanka’s export competitivenessSri Lanka’s economy remains heavily reliant on exports to European markets, particularly garments, seafood, rubber-based products, and selected agricultural goods. This effectively removes tariff barriers that had previously constrained Indian exporters relative to competitors such as Sri Lanka. Sri Lanka, by contrast, remains largely a rule-taker in this emerging order, lacking the leverage or economic resilience to shape regional trade frameworks. A warning sign for ColomboThe India–EU trade agreement serves as a stark reminder of Sri Lanka’s deteriorating position in regional and global trade.