UK trade reforms to boost Sri Lankan apparel exports, jobs

Upgrades to the Developing Countries Trading Scheme (DCTS) make it easier for businesses to trade with the United Kingdom and help lower prices on the UK high street. 

The changes, announced as part of the UK’s wider Trade for Development offer, aim at supporting economic growth in partner countries, while helping UK businesses and consumers access high-quality, affordable goods.

The announcement builds on the UK’s Trade Strategy published last month.

“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-per cent tariffs on garments. These changes are expected to be in place by early 2026,” an official UK government release 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 per cent of that trade, we know manufacturers here will welcome this announcement,” British high commissioner to Sri Lanka Andrew Patrick said.

“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,” he added.

“We are delighted that, for garments, it will now be possible to source more raw material regionally and continue to qualify for duty free export to the UK. This will be a game-changer for our trade with the UK under the DCTS,” Yohan Lawrence, secretary general of the Joint Apparel Association Forum (JAAF) in Sri Lanka, said.

“We believe that the changes will also deliver significant improvements against the objectives of the Scheme. At around $675 million in value, the UK is the second largest market for Sri Lanka Apparel, accounting for close to 15 per cent of apparel exports, while the industry supports a million livelihoods across the country,” he noted.

“This announcement will help secure employment opportunities and ensure sustainable growth in Sri Lanka by allowing us to compete on equal terms with our major competitors, and we expect exports to increase significantly when the new rules come into effect,” Lawrence added.

Launched in 2023, following the United Kingdom’s exit from the European Union, DCTS is the UK’s flagship trade preference scheme. Covering 65 countries, it offers reduced or zero tariffs on thousands of products.

In addition to the DCTS changes, the United Kingdom will continue to provide targeted support to help exporters in Sri Lanka to access the UK market and meet import standards particularly focused on agri-foods and apparel sectors.

This is through programmes being delivered by the International Trade Centre (ITC) in partnership with the Sri Lanka Export Development Board.

ALCHEMPro News Desk (DS)