UK’s new trade measures to give boost to Sri Lanka’s garment sector
The Morning: On 10 July, the UK Government unveiled a package of reforms to simplify imports from developing countries like Sri Lanka. Upgrades to the Developing Countries Trading Scheme (DCTS) make it easier for businesses to trade with the UK and help lower prices on the UK high street.
The changes, announced as part of the UK’s wider trade for development offer, aim to support economic growth in partner countries including Sri Lanka while helping UK businesses and consumers access high-quality, affordable goods. This announcement builds on the UK’s Trade Strategy published last month.
New measures include simplifying rules of origin, enabling more goods from countries such as Sri Lanka, Nigeria, and the Philippines to enter the UK tariff-free, even when using components from across Asia and Africa.
The announcement follows engagement with UK businesses and international partners, major importers, and trade associations. This included the Sri Lankan Government and the Joint Apparel Association Forum Sri Lanka (JAAFSL).
The most significant positive change for Sri Lanka is that the rules of origin for the garments sector specifically will be liberalised. The changes will ensure that DCTS countries can now source their materials from a wider range of nations and will give manufacturers from countries such as Sri Lanka the opportunity to take advantage of 0% tariffs on garments. These changes are expected to be in place by early 2026.
British High Commissioner to Sri Lanka Andrew Patrick said: “This is a win for the Sri Lankan garment sector and for UK consumers. With the UK being the second largest export market and garments making up over 60% of that trade, we know manufacturers here will welcome this announcement.
“We want Sri Lanka to improve the utilisation of the UK’s Developing Countries Trading Scheme for a wider range of goods, not just garments. With the Sri Lankan Government’s ambition to grow exports, and with the simplification of rules of origin for other sectors too, we strongly encourage more exporters to explore how they can benefit from the preferences offered by the DCTS.
“The UK remains committed to working towards creating shared prosperity for both our countries.”
OSL take:
The proposed trade incentives by the UK for Sri Lanka over and above the country’s existing trade agreements and concessions would further boost the local manufacturing and exports industries. The steadily growing manufacturing and exports industries in Sri Lanka would receive a further impetus by the UK government’s decision, thereby further expanding the business/investment opportunities in Sri Lanka’s manufacturing and exports industries. Apart from the growth and profits recorded by businesses in Sri Lanka’s manufacturing and exports industries, most of them have also expanded operations overseas indicating the business conducive environment in Sri Lanka as well as its growing business potential. Given all these factors, foreign businesses/investors on the lookout for lucrative opportunities in the region could focus on the expanding business/investment opportunities in Sri Lanka’s manufacturing and exports industries. Local businesses in these industries on a growth path also present opportunities for foreign businesses/investors to form partnerships or joint ventures with.