YohanLawerence, Secretary General, JAAF urged authorizes to continue with the GSP plus preferences that enable sectors including apparels to help sustain the country’s level of exports and ensure that it has an uninterrupted inflow of foreign currency.
The apparel association forum has been warning Sri Lanka could lose its competitive edge and risk about US$580 million worth of exports if the GSP+ concessions are withdrawn. The GSP Plus trade concession scheme is offered by the EU to encourage development and good governance by offering tariff cuts to developing countries.
Accounting for approximately 6 per cet of Sri Lanka’s Gross Domestic Product (GDP) and almost half of all merchandise exports, the apparel sector serves as a bulwark of the nation’s economy.
While the sector continues to face significant limitations from continuing disruptions in energy supply and logistics, cumulative export earnings from the sector increased by 16 per cent Y-o-Y to $2.2 billion during May 2022.
Despite unprecedented domestic volatility, unstable global market conditions and escalating raw material and logistics costs, Sri Lanka’s apparel sector has provided extraordinary support to the national economy, including direct surrender of export proceeds to the Government.
Despite the ongoing crisis, the outlook for Sri Lankan apparel is still considered positive, as evidenced by the continuing Foreign Direct Investment (FDI) inflows to Sri Lanka which have mirrored upward trends in export performance, recording 17 per cent Y-o-Y growth up-to June 2022. At present, $73 million worth of investments have been committed for expansions in the apparel sector in 2022, out of a total apparel investment pipeline of $94 million.