• SL Apparel Exporters’ Asso. Chair Rajitha Jayasuriya’s observations on the year ahead 

The apparel industry has, no doubt, changed over the last few years. Sri Lanka’s regular buyers have been challenged, with many countries embroiled in economic and social crises. With everything unfolding around this country, what is Sri Lanka’s position? Bangladesh, Vietnam, and China are forging ahead, but Sri Lanka seems to be falling behind. Last year (2024), Sri Lanka’s apparel exports were United States Dollars ($) 4.7 billion, which was a 5% growth over the previous year (2023), but still behind 2019’s exports of $ 5.3 billion. 

Taking over the reins of the Sri Lanka Apparel Exporters’ Association is its first female Chairperson Rajitha Jayasuriya, who was on ‘Kaleidoscope’ to shed more light on the path that Sri Lanka should be taking to regain its competitive edge.

Following are excerpts from the interview:

What are you foreseeing for Sri Lanka’s apparel exporters, good and bad?

It’s going to be a tough year ahead, for sure. We’ve had four to five tough years post-Covid and never really returned to 2019 levels in terms of exports. Post-Covid, we had financial issues globally and locally, which significantly impacted the export industry due to the fluctuating Rupee and currency challenges. 

Looking ahead, this year will be a tough and defining year for the apparel industry. There is a new administration in the US, and since the US is our major apparel export destination, any shift in trade policies will impact Sri Lanka’s export earnings. US President Donald John Trump has announced revised trade tariffs against China, Mexico, and Canada. This will significantly impact Sri Lanka, as we rely heavily on China for raw material imports. 

What we must do is differentiate ourselves by upskilling our workforce, integrating technical innovations into our manufacturing processes, and leveraging artificial intelligence (AI). Additionally, we must ensure that we are well-positioned through governmental support, securing the right free trade agreements (FTAs) with key countries. We must continue lobbying for a stable currency as well as Government support in labour and investment reforms. Sri Lanka needs to re-establish the ease of doing business.

While there are many challenges ahead, what does Sri Lanka have in place to overcome at least some of these?

Despite competing with regional players like Bangladesh and Vietnam, which are significantly ahead, Sri Lanka has the unique advantage of being an ethical manufacturer. 

We are known for our sustainability-related initiatives, governance, and compliance. Customers value this because it eliminates concerns that they may have about other manufacturing destinations. Sri Lanka’s apparel industry has a strong reputation for ethical manufacturing, which is a distinct advantage.

You mentioned tariffs and trade policies. What are you seeing for exporters given the Trump administration’s viewpoints?

It’s a widely discussed topic, but Sri Lanka needs to diversify its markets. We cannot be overexposed to large markets like the US and the European Union (EU). Instead, we need to expand our footprint within the EU, the United Kingdom, and other Asia-Pacific destinations. We should also explore opportunities in the Middle East for apparel manufacturing and sourcing to mitigate risks. 

FTAs are important, but, as a country, we must also improve our internal capabilities. This includes investing in technology, developing our workforce, and ensuring that government policies support the export industry through labour and investment reforms. That is the only way that we can compete in an ever-changing geopolitical environment.

What challenges do you see in achieving these goals?

Investment is key. Currently, only about 0.4% of Sri Lanka’s land mass has been allocated for investment. There is a plan to increase this to 1% by 2030, but we need to accelerate that process. 

We lack supply chain verticality. Investments in projects like the Eravur Fabric Park have been discussed for years but have not materialised. A fully-operational fabric park would ensure speed to market and reduce costs. 

Additionally, energy prices must be controlled, and currency management needs to improve. A volatile Rupee significantly impacts private industry. 

The industry is investing in AI and workforce upskilling, but we need government collaboration to build a strong supply chain within the country. The investment climate must change; it needs to be more rigorous, dynamic, and agile to keep up with global trends.

What are the industry’s top three priorities at the moment?

First, we must diversify export markets to reduce overexposure. Strengthening our presence in underdeveloped or untapped regions is crucial. 

Secondly, sustainable manufacturing must become the norm. This is no longer optional; it’s an industry expectation. Significant investment is needed in sustainable practices, innovative materials, technological advancements, and efficient manufacturing processes. 

Third, upskilling the workforce is essential. If we do not train our workforce to meet international technical standards, we will struggle to compete. 

China continuously advances in technology, machinery, and materials. To remain competitive, Sri Lanka must invest in innovation and workforce development.

How do we compare with our regional counterparts? Are we holding our own or falling behind?

We are falling behind due to several challenges. Geopolitical changes and the absence of supply chain verticality put us at a disadvantage. 

Bangladesh benefits from strong government support, incentives, and infrastructure that enable rapid recovery from setbacks. Despite recent difficulties, they rebounded quickly. Some believed that Sri Lanka would benefit from Bangladesh’s struggles, but that was a short-term advantage. 

Vietnam, on the other hand, has supply chain resilience, making it extremely competitive. In 2024, Vietnam briefly surpassed Bangladesh due to Bangladesh’s political instability, but, Bangladesh quickly regained its position as the world’s second-largest supplier. 

Sri Lanka is in a weaker position, but it’s not insurmountable. We must differentiate ourselves through end-to-end supply chain solutions, innovation, AI, and robotics in manufacturing. Our ethical manufacturing reputation is a major strength that we must continue to build upon.

Where would you like to see the industry when you hand over the role of Chair in two years?

Ideally, the industry should achieve its $ 8 billion export target. We should have established supply chain verticality, government support for labour and investment reforms, infrastructure improvements, controlled energy pricing, and well-negotiated FTAs that make us competitive with regional counterparts. 

If we achieve these goals, the apparel industry will be positioned for sustainable growth, and the $ 8 billion target will be well within reach. But, this is not something that the Sri Lanka Apparel Exporters’ Association or the Joint Apparel Association Forum can achieve alone; it requires a collective effort.

(The writer is the host, director, and co-producer of the weekly digital programme ‘Kaleidoscope with Savithri Rodrigo’ which can be viewed on YouTube, Facebook, Instagram, and LinkedIn. She has over three decades of experience in print, electronic, and social media)