Sri Lanka’s apparel sector continues to demonstrate resilience despite global uncertainties, including looming tariff threats from the United States and ongoing demand volatility in key Western markets. As the country’s largest industrial export sector and a major employment provider, the apparel industry has remained a pillar of economic stability through turbulent times—supported by market diversification and a pivot towards value-added products.
In May 2025, Sri Lanka’s apparel exports remained broadly stable, recording only a marginal decline of 0.63% compared to the same month in 2024. Total export earnings reached US$ 365.08 million. While this figure suggests a temporary softening, the overall export performance for the first five months of the year tells a story of steady recovery and adaptability.
The May downturn was primarily due to reduced demand in two key markets— the United States and the United Kingdom. Shipments to the US fell by 7.59%, while exports to the UK declined by 6.81%. These contractions underscore the persistent uncertainties in Western consumer markets, which continue to be affected by high inflation, shifting consumption patterns, and geopolitical concerns, including trade policy fluctuations such as the potential re-imposition of tariffs by a future Trump administration.
However, this dip was largely offset by strong performances in other regions. Exports to the European Union rose by 5.15%, while shipments to non-traditional markets surged by an impressive 11.1%. This diversification strategy appears to be yielding results, with exporters successfully penetrating alternative markets amid sluggish Western demand.
From January to May 2025, total apparel export earnings climbed by 9.8% to US$ 2.02 billion, reflecting the sector’s broader recovery momentum. The EU (excluding the UK) recorded the highest growth at 15.36%, followed by a 13.12% increase in non-traditional markets. Even the US and UK markets showed year-to-date growth of 6.52% and 3.74%, respectively—suggesting that despite monthly fluctuations, overall demand remains stable over the longer term.
Commenting on the sector’s performance, a spokesperson for the Joint Apparel Association Forum (JAAF) said, “The industry’s year-to-date performance demonstrates resilience and adaptability, driven by strategic market shifts and continued investment in value-added products. We are encouraged by the momentum, particularly in emerging and EU markets.”
To sustain this recovery trajectory, JAAF emphasized the critical need for a stable and predictable trade policy environment. Industry stakeholders continue to advocate for policies that ensure long-term competitiveness and help exporters navigate global headwinds. As the global landscape evolves, Sri Lanka’s apparel sector is proving its capacity to adapt, innovate, and survive.
