Sri Lanka’s apparel industry has a target of $8 billion in export earnings by 2025.

Strengthening backward vertical integration and further improving sustainability credentials are vital in achieving the sector’s vision, while enhanced access to key export markets – including within the Asian region – will provide a significant boost in realizing these aspirations.

At present Sri Lanka accounts for around one per cent of the global market share of apparel exports. Efforts to strengthen backward vertical integration of Sri Lanka’s apparel value chainare critical, particularly in the current context. This would pave the way for the industry to reduce lead times and significantly increase its domestic value addition – which currently stands at around 55 per cent. The latter would also enable Sri Lanka to make greater use of preferential tariff concessions such as the Generalised Scheme of Preferences (GSP) Plus tariff concessions to the European Union (EU), a critical market for Sri Lanka in general, and apparel in specific.

Efforts are being made to attract key players in the fabric segment to invest in fabric mills in Sri Lanka. The pandemic has strongly increased the preference for near-shoring among buyers, given how Covid caused vast disruptions to global supply chains. Sri Lanka can position as a hub to serve Asia.