Apparel exports looking for market diversification

Indunil Hewage

The Sri Lankan apparel industry seeks more bilateral partnerships and free trade agreements with India, China, Brazil, Russia and Japan to increase export volume while attracting more preferential treatment for the industry wellbeing. Having understood the risks of depending on traditional markets and following the abolition of industry related concessions, attention has been given to go for export market diversification.

A busy worker at an apparel factory in Sri Lanka

Speaking to Daily News Business Joint Apparel Association Forum Secretary General M P T Cooray said Sri Lanka needs to increase the three million pieces quota upto 120 million in the future under the Free Trade Agreement (FTA) signed with India in order to better tap post-war opportunities.

The Sri Lankan apparel industry has entered into two agreements with India under the FTA named three million pieces and eight million pieces quota agreements.

According to the three million pieces quota agreement, the Sri Lankan apparel industry is entitled to import fabrics and other related objects from any destination and export apparels with value addition to India.

Under the eight million pieces quota agreement, Sri Lanka is able to import fabrics and other apparel industry related objects only from India and again export finished apparel items only to India, which is not much profitable for the industry. However, three million pieces quota agreement with India provides opportunities for Sri Lanka to exploit the Indian market since India possesses an upper middle class who has a relatively high disposable income.

“When Sri Lankan apparels are exported to Japan, we have to pay high duty. In order to mitigate the present obstacles, we are looking at possibilities to enter into some sort of free trade agreement with Japan to get preferential treatment in the future.

In addition , there is a good demand for apparels in China, Russia and Brazil and government seeks to strengthen the bilateral relationship with these countries aggressively to increase Sri Lankan apparel export volumes to these countries in the future,” Cooray said.