According to many real-world examples and theories, the process of industrialization has been recognized as an engine of growth. Many economies which followed the industrialization-led transition have benefitted from rapid and accelerated economic growths with the support of export promotion, high trade openness, economic liberalization, and improved business climate. The ideology has been firstly followed by the countries in the European region and showed impressive results in economic growth and development. Thus, many Asian countries have been encouraged to follow up the industrial transformation after the 1990s. As a result, Asian countries like Japan, Singapore, Korea, China, and India have shown impressive performances in economic growth and development afterward. However, in the Sri Lankan context, the industry sector has appeared in the economy nearly for a century and several important eras in industrial sector development were followed. However, it is doubtable that whether Sri Lanka has gained actual benefits through that industrial transformation or utilization of policies. Therefore, this article mainly focuses on providing a clear outline of past industrial policies used in the Sri Lankan economy, clearly positioning the current performance of the industrial sector in Sri Lanka, and identifying the major issues in the current industry sector with the help of valid literature and secondary data. Accordingly, many previous studies have suggested that political and policy instability, lack of infrastructure, lack of credit and financial facilities, lack of labor and stagnated productivity, etc. are the key issues in the current industry sector. Several possible recommendations to overcome these issues have been through literature to curb the negative impact of those adverse components on the industry sector development like ensuring corruption-free political and social background, stabilizing macroeconomic variables, addressing skill gaps of the workforce, transparently managing tax system, etc.