Sri Lanka’s apparel industry yet to fully utilize benefits of EU’s GSP Plus facility
The Sri Lanka apparel industry has reportedly called for a number of measures from the Government, including electronic documentation, e-commerce mechanisms, law reforms, and the introduction of a relatively new model of business enhancing offshore activities.
At the Sri Lanka Apparel Export Association’s (SLEA) Annual General Meeting (AGM), SLAEA Chairman Rehan Lakhany said the measures were important in boosting the industry, both locally and internationally and that the industry has a target of US$ 8 million export turnover in 2025, which is double their present performance.
“Our confidence levels have improved considerably, and hope is there for us that the new administration will ensure a proper delivery of decision-making on policy, and relevant action with time-bound implementation plans,” Lakhany has said, adding that the environment will further improve following the establishment of political stability after parliamentary elections this year.
As for industry requests from the government of Sri Lanka, Lakhany has focused on the need to broaden supply bases both locally and regionally.
He has noted that through offshore management of total supply solutions in collaboration with a regional producer and subcontracting mechanisms, “Sri Lankan exporters will be able to create a new flow of export earnings, which could approximately amount to an additional $ 300 million from our sector alone.”
He has further requested that this relatively new model of business be encouraged by the Sri Lankan government by revisiting current tax provisions and that the Joint Apparel Association Forum Sri Lanka (JAAF) has already made submissions in this regard.
Lakhany has also said that a major issue faced by the industry was the absence of a mechanism to receive payments online and that the authorities would be required to create a mechanism similar to PayPal for this purpose.
The SLEA Chairman has also called on the Finance Ministry to take responsibility of changing regulations in relation to electronic documentation.
While saying that there was a need to develop local markets, the Lakhany has said international market penetration was a priority and that the country’s Free Trade Agreements (FTAs) are not providing considerable market access to the industry.
He has further proposed the continuation of the trade dialogue that commenced in 2013, and noted that the EU’s GSP Plus facility was not fully utilised.
“Utilisation is only 47%, even though we could have claimed 98% if we could meet the country of origin rules,” he has said, bringing up the issue of Sri Lanka depending on other sources for raw material. It is for this reason that the move to establish a textile manufacturing zone in Eravur in Sri Lanka’s Eastern Province is a welcome move.
OSL take:
Sri Lanka has many trade agreements as well as trade concessions enjoyed by the country. The island’s geographical positioning as well as the ease of doing business environment in the country have increased the country’s attraction as a business destination in the South Asian region. However, as the news report has pointed out above, Sri Lanka is yet to fully utilise the benefits of the many trade agreements as well as trade concessions opening up a host of lucrative business/investment opportunities in Sri Lanka’s exports sector.
| Article Code : | VBS/AT/24022020/Z_10 |