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SL can increase apparel revenue by USD 500 Mn

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If allowed to export more pieces to India annually

Sri Lanka can increase their annual apparel export revenue by minimum USD 500 million if Sri Lanka is allowed to export more items to India, said Secretary General Yohan Lawrence, Joint Apparel Association Forum Sri Lanka. (Pictured)

In 2013, the fabric requirement and the port restrictions were removed by the Indian Government and eight million pieces were permitted to be used for exports.

“However items like a pair of gloves or a pair of socks are also counted as two pieces and not as one and Sri Lanka is at a disadvantage due to this.”

Sri Lankan apparel manufacturers have successfully entered the Indian market and a quota of 8 million pieces has been fully used in the last few years (except 2020 during Covid). In addition to the international brands shipped to India from local manufacturing, a number of companies have also made their presence in many key malls in India, particularly targeting high and middle-end consumers, including foreigners.

Total earnings from apparel exports to India which stood at US$ 5.18 million in 2008 increased to US$ 77.51 million in 2018 indicating a massive growth. “Unfortunately, the limit of 8 mn pieces of quota restricts Sri Lanka’s ability to grow its exports to India as there is more than triple the number of inquiries to export local apparel to India.

“If more exports are allowed we could earn around USD 500 million from the Indian market alone. At present, the industry is on a 30% YoY dip due to damped demand with the trend expected to last well into the second half of 2023. Under these circumstances we expect the SME sector to be hit hardest and placing at risk a significant portion of the 350,000 workers who are directly employed by the sector.”

“This chain of events was mirrored during the Covid-19 induced slow down as well and one quick answer to this would be allowing more exports to India,” he said.

Since the India Sri Lanka Free Trade Agreement (ISFTA) in 2000, export trade alone has multiplied by 18 folds from US$ 47 million in the year 1999 to US$ 815 million in 2021.

“However the apparel industry could not get significant benefits from this due to export restrictions.”

Since this limited quota has to be shared by all Sri Lankan exporters, none of them is in a position to negotiate any meaningful orders with their Indian buyers.

“Although Sri Lanka has had several rounds of discussions with India, urging the latter to remove the apparel quota under the ISFTA, the response has not been that encouraging.”

Apparel exports from Bangladesh have risen due to Bangladesh enjoying LDCs tax advantages which has benefited Bangladesh’s textile exports to the Indian market without restrictions.

Tuesday, March 21, 2023 – 01:00

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