Maruti Suzuki’s export to Sri Lanka, its biggest foreign destination last year, is losing speed after an increase in import duty by the island nation two months earlier, an Indian media report said last week.

“The pent-up demand following the duty relaxation last year has been served. There was also advancement of purchase, and market growth in Sri Lanka was abnormally high. After the reversal of import duty, the short-term surge in demand ended,” Business Standard reported last week quoting a Maruti spokesperson.

As new imports would become expensive, sales dropped but are expected to normalise soon, the spokesperson added, without disclosing the number of units shipped.

In November, the import duty on 1,000cc vehicles was increased from 50 to 70 percent, impacting Maruti’s WagonR, for instance. Import duty on vans was increased from 85 percent to 150 percent.

Maruti’s Alto and Celerio models are in high demand in Lanka. In the past, Maruti had contemplated setting up an assembly unit in Lanka. Its export to Sri Lanka has fluctuated with changes in the tax structure. Lanka was Maruti’s biggest market in 2011-12.

Last year, Sri Lanka overtook Maruti’s hitherto top export markets of Chile and the Philippines, after the Lankan government reduced the duty. The move acted as a stimulus for demand and India emerged a big beneficiary.