Sri Lanka’s apparel sector grows amid policy uncertainty and global shifts

By: Staff Writer

October 26, Colombo (LNW): Sri Lanka’s apparel sector long regarded as the backbone of the country’s industrial exports—has shown renewed resilience in 2025 despite policy inconsistency and external challenges. According to the Joint Apparel Association Forum (JAAF), apparel exports for the first nine months of 2025 reached $3.8 billion, reflecting a 6.83% increase from the same period in 2024.

The industry recorded steady cumulative growth, driven mainly by improved performance in the European Union and other emerging markets, even as exports to traditional destinations like the United States and the United Kingdom declined. In September 2025, total apparel exports amounted to $403.01 million, up 1.58% year-on-year, with the EU market rising 10.75% and “other markets” growing 19.49%. However, exports to the US and UK fell by 4.71% and 15.06%, respectively.

While September figures dipped slightly from August, JAAF noted this seasonal trend is typical, reflecting shipment cycles linked to Western retail demand. Despite uneven month-to-month performance, the sector has retained its competitive edge, particularly through diversification, productivity improvements, and innovation.

Exports to the United States totaled $1.46 billion a modest 1.73% growth while the EU (excluding the UK) expanded strongly by 14.24% to $1.17 billion. Exports to the UK increased 2.31% to $533.7 million, while other destinations reached $630.3 million, marking a 10.45% rise.

JAAF said that while global demand remains fragile, Sri Lankan exporters have displayed “remarkable adaptability” through efficiency and ethical production standards. “The positive cumulative growth highlights the strength and competitiveness of Sri Lanka’s apparel sector even amid global headwinds,” the association stated.

However, JAAF also voiced concern over policy inconsistency and the slow pace of reforms that continue to hinder investor confidence and long-term planning. Industry stakeholders point to frequent changes in trade, tax, and customs policies, as well as a lack of clarity on energy pricing and export incentives, which complicate operational decisions for manufacturers.

Analysts note that while Sri Lanka’s apparel industry has transitioned from basic garment production to value-added, design-driven exports, sustaining momentum will require stable policies, logistics modernization, and stronger sustainability initiatives to meet global buyer expectations.

The sector, which directly employs over 350,000 workers and contributes nearly 6% of GDP, remains Sri Lanka’s top foreign exchange earner. Yet, competition from regional peers such as Bangladesh, Vietnam, and India continues to intensify.

JAAF reaffirmed its commitment to working closely with the Government and stakeholders to enhance policy alignment, support small and medium manufacturers, and ensure Sri Lanka’s apparel industry remains a reliable, ethical, and future-ready sourcing destination in the global market.

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