Apparel manufacturers based in Europe and China are likely to expand their businesses in Sri Lanka if the country can revive the EU GSP Plus by next year. Sri Lanka has been in discussions with the European Union to ascertain how to revive the GSP Plus trade concessions that would likely be implemented in 2016.

In the wake of these developments, overseas apparel manufacturers in Sri Lanka are likely to expand their capacity. European investors are keen on expanding their production if GSP Plus concessions are available. Investors already manufacturing out of China also want to expand their capacity in Sri Lanka. China’s labor wages are increasing and in comparison Sri Lanka seems more competitive at lower rates.

The industry is awaiting final talks between the government and the US authorities on the possibility of gaining market access especially through negotiations underway on the Trans Pacific countries that could impact on Sri Lankan trade if this agreement was to go ahead.

There is increased local investment in the North and East. Manufacturers want to cash in on the opportunities to get access to EU markets when the EU GSP Plus concessions are revived.