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Govt. looking at improving apparel sector’s preferential access: Nandalal

13 Sep 2022

  • Central Bank Governor pledges to support the industry
  • JAAF highlights importance of retaining GSP post-December 2023
At an event organised by the Shippers’ Academy recently, in response to a question raised by the Secretary General of the Joint Apparel Association (JAAF), Central Bank of Sri Lanka (CBSL) Governor Dr. Nandalal Weerasinghe pledged support to the apparel industry and acknowledged the contribution the industry makes to the economy, stating that the Government is looking into initiatives to promote and improve Sri Lanka’s preferential access to international markets. JAAF Secretary General Yohan Lawrence highlighted that trade agreements are essential to sustaining the performance of Sri Lanka’s apparel exports.  Sri Lanka is to benefit from the UK’s new Developing Countries Trading Scheme (DCTS) and the apparel industry has consistently highlighted the importance of retaining the Generalised Scheme of Preferences Plus (GSP+) post-December 2023. The current schemes unfortunately only have a utilisation of around 50% for apparel due to the restrictions on the rules of origin on fabric, which mean that only fabric from a SAARC country is permitted for cumulation purposes.  JAAF has highlighted this constraint and has requested that this aspect be addressed in future iterations of the GSP+ facility. “As Sri Lanka struggles with the ongoing economic crisis, the country’s trade balance recorded a surplus last July. While this surplus reflects the continued decline in import expenditure, it is also reflective of the contribution the apparel industry continues to make towards Sri Lanka’s economic recovery and growth,” the statement issued in this regard by JAAF stated.  As per the CBSL Annual Report 2021, textiles, and garments amount to 43.5% of Sri Lanka’s industrial exports. The export value of textile and garments in the same year amounted to $ 5,435.1 million. The resilience of the apparel industry, along with policy support received by the Government amidst the prolonged crisis, has enabled the industry to continue this positive start to 2022, while aiding the country’s economy. According to calculations made by the JAAF, total apparel exports in July 2022 ($ 522.14 million) experienced a 22.4% increase in comparison to July 2021 apparel exports ($ 425.75 million). The table illustrates exports to Sri Lanka’s major apparel export markets – the US, EU, and the UK, and other countries, which recorded an increase of 16.93%, 32.3%, 29.32%, and 15.77%, respectively.  The cumulative performance of the apparel industry from January to July 2022 has also demonstrated a positive outlook. Total exports during the seven month period from January to July 2022 increased by 20.44% compared to the corresponding period of 2021. Overall exports to the US, EU, UK, and other countries increased by 27.12%, 14.55%, 18.12%, and 16.64%, respectively.   


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