Garment industry has an important place in Sri Lanka’s economy. It has become Sri Lanka’s largest export industry since 1986. It is also the country’s largest net foreign exchange earner since 1992.
The textiles and garment industry began in 1950s when the government took steps to promote the textiles industry as an import substitution industry. At this stage Sri Lanka imported raw material and produced yarn, raw fabrics and finished fabrics mainly in a few large scale textile mills established under government ownership. Power-loom and hand loom centers largely owned by private sector too engaged in the production of yarn and fabric. The textiles produced in these industries were fully utilized in the domestic market.
Over the past three decades the apparel industry has been focusing on innovation, competent workforce, international reputation for quality and environmental accountability .This in turn has helped to develop a sophisticated industry from tailors to total solutions specialists.
The suspension by the European Union of the trade concessions under the Generalized System of Preference Plus in February 2010 has been a major blow to the garment industry in Sri Lanka.
Retention of the GSP Plus benefit and sustaining existing businesses are major challenges for the apparel industry in Sri Lanka this year. At present the garment industry in Sri Lanka is a US$3.2 billion export business and accounts for 45 per cent of the country's export revenue.
Apparel exports to the United States and Europe have been severely affected due to the recession. US and Europe are major destinations which account for over 70 per cent of Sri Lanka’s apparel exports.
The industry wants the government to devalue the Sri Lankan rupee to increase the apparel export revenue. But the response of the Central Bank in Sri Lanka in this regard has not been favorable.
The garment sector has set a target of US$ 5 billion by 2010 and to consolidate its position in the global market. Between October 2008 and March 2009 nominal exports of garments grew by 6.3% with 5.4% growth in volume. However, in the second quarter of 2009 garment export volumes declined by 9.2%, as the impact of decline in demand was felt.
Last Updated on: 17-05-2010
