Sri Lanka - Country Commercial Guide

This is a best prospect industry sector for this country.  Includes a market overview and trade data.

Last published date: 2021-09-28


Sri Lanka’s apparel export industry is one of the key sectors of the country’s economy.  The industry has recorded substantial growth levels over the past four decades and is currently the country’s leading export, accounting for approximately 44 percent of total exports, and providing about 33 percent of the manufacturing employment in the country.  Earnings from apparel exports in 2020 were $4.4 billion, down $1.3 billion over 2019.

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.