Sri Lankan garment manufacturers are set to gain unprecedented access to UK markets under new liberalised trade rules coming into effect in early 2026. The reforms will allow manufacturers to source up to 100 percent of garment inputs from any country worldwide, while still enjoying tariff-free access to the UK.
According to the British High Commission in Colombo, Sri Lanka benefits from the UK’s Developing Countries Trading Scheme (DCTS) as an ‘Enhanced Preference’ country. Currently, Sri Lankan garment exports qualify for tariff-free access only if inputs are sourced from within South Asia and subject to strict processing restrictions.
The upcoming reforms will place Sri Lanka on par with lower-income countries such as Bangladesh, which enjoy ‘Comprehensive Preferences’ under the scheme. This means Sri Lankan garment exports will now be eligible for zero tariffs regardless of where raw materials are sourced.
British High Commissioner to Sri Lanka, Andrew Patrick, noted:
“We are pleased to confirm further details of the reforms to the DCTS. I know from my discussions with the JAAF, Sri Lankan manufacturers and UK brands that the changes are likely to have a significant positive impact on the garment sector in Sri Lanka, while helping lower prices on the UK high street.”
Mark Surgenor, President of The Council for Business with Britain, also welcomed the changes, calling it “a particular success story for Sri Lanka’s garment industry,” and highlighting that more exports will now qualify for zero tariffs, strengthening bilateral trade.
The British High Commission added that the reforms reflect the UK’s role as a progressive trade partner, simplifying rules of origin and enabling Sri Lankan manufacturers to be more competitive in global markets while retaining preferential access to the UK.
The DCTS, covering 65 developing countries, provides tariff reductions across multiple product categories. Sri Lanka’s Enhanced Preference status offers significant advantages under this framework.
In addition to garment sector reforms, the UK in June announced the creation of a new Asia Regional Cumulation Group comprising 18 countries, including Sri Lanka. For all eligible products, inputs sourced from any member country will be treated as originating in Sri Lanka if final processing or manufacturing occurs locally. This broadens opportunities for exporters and enhances competitiveness.
The group includes Afghanistan, Bangladesh, Bhutan, Cambodia, India, Indonesia, Kyrgyzstan, Laos, Mongolia, Myanmar, Nepal, Pakistan, Philippines, Sri Lanka, Tajikistan, Timor-Leste, Uzbekistan, and Vietnam.
