The Ministry of Urban Development and Housing says vehicle number plate manufacturing will begin in a state owned factory in Kolonnawa.
This will be the first time license plates will be manufactured in the country.
The Ministry said the decision was taken after Prime Minister Mahinda Rajapaksa issued directives to the Ministry to prevent the outflow of foreign exchange.
The Ministry stated a large sum of foreign earnings is spent on importing vehicle number plates, and through the commencement of manufacturing license plates locally the outflow of funds could be prevented.
At present the import of parts for vehicle license plates has been outsourced to a private organisation on a contract due to end in 2024.
The Ministry stated it plans to hand over responsibility of manufacturing license plates to government factories after the contract expires.
According to statistics issued by the Department of Motor Traffic, 500,000 new vehicles are registered annually, with orders for 1,000,000 license plates granted to foreign countries.
Accordingly, the Ministry said Rs.600 million can be saved annually through this initiative.