Apparel sector aims at USD 8 Bn. annual exports
Apparel exporters target USD 8 billion export revenue and to achieve this the government needs to fulfill five requirements and a lot of support from many institutions were required, Indika Liyanahewage, Chairman Sri Lanka Apparel Exporters Association (SLAEA) said addressing the 40th AGM in Colombo on Tuesday.
He said to achieve this the government needs to fulfill mainly five requirements. Firstly, bringing down the interest rate, which is about 30%, and unprecedented for BOI companies.
“For our industry to be competitive and compete with other countries like Bangladesh, Vietnam and India, we need to offer a competitive price towards our customers. So, when 15% goes to 30%, I don’t have to explain how it impacts our cost per minute.” Therefore, he requested to retain the dual rate concept for apparel and BOI sector. The next prerequisite he said was to bring down the income tax rate which is going to be somewhere above 30%. “Our knowledge workers are migrating now. I got to know, in one of the leading bank’s 400 people have migrated already, all knowledge personnel. And our industry is also facing the same. They’re going to our competitor nations with the knowledge base we have created. We have invested a lot in them as employers. If they migrate, they are not only taking our dollars and keeping it there but also taking our competitive advantage, which is knowledge and innovation.”
The next point he said was free trade agreements and market support was extremely important for them. For example, in India they were offered a quota for 8 million pieces which was insufficient and urged to get it up to a USD 500 million quota. He said they also need to look at the rules of GSP plus, UK’s DCTS scheme, Canada GSP plus and China’s preferential country of origin scheme.
“If we get that we will be competitive, and we can go to the USD 8 billion target. Then we will be able to tell you a timeline that by this time we will go to USD 8 billion with a 55% value addition which is better than probably the tourism industry or any other exporter industry turnover.”
Liyanahewage also pointed out the need of labour reforms and he welcomed the President’s initiative to do so in the Budget speech. He said their biggest strength was their workforce. He said they support good labour regulations and this will enable them to bring more investors to Sri Lanka. He also requested to extend the mandatory dollars conversion from one month period to two months and the regulating of DO charges.