Sri lanka Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in sri lanka, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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Textiles
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Overview

Sri Lanka’s apparel and textile manufacturing industry is the most significant and dynamic contributor to Sri Lanka’s economy. Entirely privately owned and operated, Sri Lankan apparel and textile manufacturers have successfully utilized the opportunities in the international market to evolve beyond traditional exports and tailoring designs to provide sophisticated and creative solutions through fashion BPO services, research, development, and innovation centers. The value of the sector reached $5.92 billion in 2022 and is targeting exports worth $8 billion by 2025 by increasing investment in local supply chains as the economic crisis restricted access to inputs for the sector. The industry accounts for 46 percent of export revenue and has 350,000 direct hire staff.

 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.  However, the industry is gearing for around 20 percent reduction in orders for 2023 due to the volatile situation in the country and manufacturers are considering moving operations to secure orders if the situation worsens. Consistent energy supply and maximizing renewable energy is a key factor for the sector to sustain operations.

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.  The industry has forecast around 20 percent drop in orders due to market contractions in some of the major markets and is expected to recover in early 2024.

Leading Sub-Sectors

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

Opportunities

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.

Resources

Joint Apparel Association Forum Sri Lanka (JAAF) (www.jaafsl.com)

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