Sri Lanka targeting going beyond traditional EU and the US markets; to penetrate deeper into the Indian, Chinese and Brazilian market
Exceeds the US$ 5 billion mark in garment exports
Sri Lanka which is exporting its garments mainly to the US and the EU, accounting for nearly 87 percent of Sri Lanka’s apparel exports, has touched USD 5, 050 million in 2018, registering an increase of 4.79 percent compared to the export turnover of US$ 4, 819 million in 2017 as per the Joint Apparel Association Forum (JAAF). The contribution of the textile and apparel industry to the GDP is around 6 percent based on re-based GDP estimates; therefore, the apparel industry will continue to influence the level of economic development in the mid-term. According to JAFF, the apparel industry in Sri Lanka is targeting to reach USD 8 billion by 2025 which requires a 6 percent annual compound growth, which is a very ambitious target.
Sri Lanka’s traditional apparel export markets such as US and EU becoming stagnant; JAFF feels that the industry needs to penetrate more into emerging markets through regional, multi-lateral, or bi-lateral trade arrangements particularly with India, China and Brazil. The industry is looking forward to raising the bar to the next level with effective public-private partnerships with the government on policy making.
While addressing the post business session of the 36th Annual General Meeting of Sri Lanka Apparel Exporters Association held in Colombo, the newly elected Chairman of the Sri Lanka Apparel Exporters Association (SLAEA), Rehan Lakhani stressed on market promotion, which is the need of the hour.
SLAEA outgoing Chairman Felix Fernando pointed out that the growing apparel markets of China and India are projected to surpass several developed markets, thereby representing a significant portion of the global apparel consumption. “All four BRIC nations appear among the top markets having a cumulative share of approximately 23 percent. Combined apparel consumption of the US and the EU is 40 percent while they have just 11 per cent of the world’s population, implying a very high level per capita expenditure on apparel compared to the rest of the world,” stated Fernando.
Sri Lanka’s apparel exports to India have nearly doubled to US $80 million in 2018. Even though it represents a fairly small share of Sri Lanka’s apparel exports, Sri Lankan apparel exports exceeded the apparel import quota set by India, which indicates the high demand for Sri Lankan apparel in the Indian market. Sri Lanka should pursue a sectorial liberalisation through the proposed Economic and Technology Co-operation Agreement (ETCA) with India to increase market access for Sri Lankan apparel exporters to that country. India is becoming a focal point for the fashion industry as its middle class consumer base is growing and manufacturing sector strengthening.
Sri Lanka is importing fibre, yarn, fabric and finished apparel products worth of US $700 million from India per annum, while Sri Lanka’s apparel exports to India stood at US $80 million in 2018. Hence SLAEA, chairman Lakhani feels that Sri Lanka should discuss with Indian authorities for a measure to increase or remove the quota. “Any interim measure to enhance the quota of 8 million pieces without attaching strings such as Indian fabric usage would become very handy especially as a confidence building exercise,” he stated.
Highlighting other challenges that the apparel industry faces, Lakhani said, “Our costs are increasing; our business models demanding investments in advanced technology, more up-skilled labour force, lean and conscious energy sensitive production environment.”News Region Sri Lanka