By 2025, Sri Lanka’s garment sector aims to achieve $8 billion in export revenues. Backward vertical integration must be strengthened, and sustainability credentials must be improved, in order to realize the sector’s ambition, while improved access to important export markets, notably those in Asia, would help to realize these goals. At the moment, Sri Lanka accounts for around 1% of worldwide garment export market share. Efforts to increase Sri Lanka’s clothing value chain’s backward vertical integration are crucial, especially in the current setting. This would allow the sector to shorten lead times and greatly enhance domestic value addition, which presently stands at roughly 55%.
The latter would also allow Sri Lanka to take advantage of preferential tariff concessions like the Generalised Scheme of Preferences (GSP) Plus tariff concessions to the European Union (EU), which is a crucial market for Sri Lanka in general and clothing in particular. Key firms in the fabric market are being courted to invest in fabric mills in Sri Lanka. Given how Covid disrupted global supply networks, customers’ appetite for near-shoring has risen significantly as a result of the epidemic. Sri Lanka has the potential to act as an Asian center.