Sri Lanka - Country Commercial Guide
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Sri Lanka’s apparel export industry is one of the key sectors of the country’s economy, having recorded substantial growth over the past four decades.  The value of the sector reached $5.42 billion after exports rose 22.93 percent year-on-year in 2021.  The country’s apparel sector is targeting exports worth $8 billion by 2025 through increased investment in local supply chains as the economic crisis has restricted access to inputs for the sector.  and the apparel sector is currently the country’s leading export industry, accounting for approximately 44 percent of total exports, and providing about 33 percent of the manufacturing employment in the country. 

Sri Lanka has built its competitive edge on value-addition rather than cheap production cost, with greater emphasis on product quality and its ability to manufacture niche products.  Although orders have picked up from key markets, steep price increases in raw materials, increased health and safety costs, and lack of vaccinations for staff have caused significant operating challenges for the sector.

Leading Sub-Sectors

  • Establishing textile-manufacturing facilities
  • Providing technological equipment
  • Warehousing hub for U.S. yarn


  • The apparel industry is a key sector that needs continuous upgrading and acquisition of new technology and equipment.
  • There are prospects to supply grey fabric, denim, polyester yarn, and specialized fabric used for lingerie and sportswear. 
  • Many Sri Lankan apparel companies manufacture for top U.S. apparel brands. 

Attractive incentives are available for U.S. manufacturers to establish textile-manufacturing facilities.  U.S. suppliers who want to compete in this market need to be flexible in negotiating payment terms.