Sri Lanka is attempting to finalise free trade agreements with countries like China, India, Japan and Australia. These are expected to help boost exports and strengthen the industry’s resilience.

August 2022 saw a 20 per cent increase in export turnover generated by the apparel sector but at present Sri Lanka is not competing on a level playing field. Its main competitor countries like Bangladesh, Vietnam and some African nations have duty concessions in global markets, which it does not have.

Sri Lanka’s only concessions are for the UK and the EU markets, and those come coupled with a variety of strict conditions pertaining to the origin of raw materials which means that utilisation of these preferences remains around 50 per cent for apparel. The US, the EU and the UK comprise about 86 per cent of Sri Lanka’s total exports but Europe is riddled with geo-political tensions and economic volatility. So securing new free trade agreements can help reduce barriers for Sri Lankan apparel exporters and help them diversify. One priority is a free trade agreement with China. Further trade concessions can help better integrate Sri Lanka with regional markets. For example penetrating even ten per cent of the Indian market would be equivalent to reaching 100 million people.