Strategic partnerships with India, Japan and other East Asian nations are needed to boost and diversify markets and face challenges posed by economic downturns in traditional export destinations, Sri Lanka Apparel Exporters Association (SLAEA) chairman Indika Liyanahewage recently said.
“Japan, in particular, presents a significant opportunity, with an annual import of $26 billion worth of apparel of which only $35 million comes from Sri Lanka. There is great potential for growth in the Japanese market,” he told the 41st annual general meeting of the SLAEA.
While 30 per cent of Sri Lanka’s garments are shipped to Europe and 40 per cent to the United States, these markets have witnessed a shrink due to economic challenges, he noted.
India’s middle-class market segment is a decent opportunity for Sri Lanka to tap into which accounts for over 300 million people, who are now getting into a high-spending mode, he was quoted as saying by a top Sri Lankan newspaper.
The free trade agreement between India and Sri Lanka has set the annual export quota to the former at 8 million garment pieces and the annual imported raw material quota from the former at a value of $1 billion. Sri Lanka’s apparel export revenue to India is about $40-50 million.
“We hope the cap could be lifted or extended as much as possible,” Liyanahewage said.
He also urged the government to address issues like high electricity costs and tariff duties that affect export competitiveness.
The country’s apparel exports in September this year were sharply down by 26 per cent to $332 million, while performance in the first nine months was down by 20.5 per cent to $3.4 billion.