‘FTAs have not provided sizeable market access to apparel exports’
by Sanath Nanayakkare
Lanka’s FTAs have not provided considerable market access to the
apparel exports industry. Therefore, we propose to the authorities to
continue the trade dialogue which was under way in 2013, Rehan Lakhani,
chairman, Sri Lanka Apparel Exporters Association said at the
Association’s AGM on Wednesday.
“Sri Lanka is essentially a
trade dependent country where imports and exports play a major role.
So, the trade dialogue should be directed towards preferential
arrangements with EU and the UK on a high priority basis followed by
the recommencement of negotiations with China, Japan and India to
penetrate those markets, Lakhany said.
“The only available
GSP+, a unilateral preferential facility offered by the EU, will
continue only for three more years since we have graduated to middle
income country status. At the same time, we do not have the required
verticality and are dependent on other sources for our raw materials.
Hence, our utilization is only 47% though we could claim 98% if we could
meet the country of origin rules”, he added.
“We can see
that the countries which are connected within major markets through
preferential arrangements are having exponential growth during the last
decade in apparel and textile exports: Bangladesh, Cambodia and Vietnam
to name a few,” he said.
Lakhany, who is giving leadership
to Sri Lanka Apparel Exporters Association for the second consecutive
year, further said, among other things -“The apparel industry is an
industry making the largest contribution to the economy of our country
by way of manufactured exports representing approximately 43% of the
country’s total exports. We are one of the largest employers and the
most visible industry right throughout the island as our members are
scattered all over. We are touching the hearts of millions of people in
the country and outside and extensively contributing approximately a
massive sum of Rs. 294 bn to the reduction of poverty and for the
prosperity of the regional economy of our country.
“Our industry has set itself a target of reaching US$ 8bn export turnover in 2025.
is disrupting the traditional market practices and is achieving double
digit growth. Buyers are now demanding goods to be supplied from
nominated sources where preferences are available when country of origin
rules are met. On the other hand, the consumers are continuously
seeking the transparency and traceability ensuring that the planet that
we are living in is protected at all points of the supply chain.
management of total supply solutions in collaboration with regional
producers and also engaging in international sub-contracting mechanisms
would be key. Thus Sri Lankan exporters will be able to create new
flow of export earnings which could reach approximately an additional US
$ 300 mn from our sector alone.
“Such offshore activities
will play a major role in creating new businesses where Sri Lanka could
manage large orders and utilise both local and external capacities by
engaging in order management, supply management, quality management,
etc., both within Sri Lanka and outside. All export proceeds will be
brought to the country because of the friendly tax regime that was
prevalent. ‘We earnestly request that this relatively new model of
business be encouraged by the government by revisiting the prevailing
tax provisions which was introduced about three years ago based on IMF
“The industry in collaboration with the BOI
has identified a dedicated textile manufacturing zone to be set up in
Eravur in a land of extent of 200 acres. The industry is of the view
that if the completion of the project could be done in one year, we
could guarantee a minimum of three projects to be established.
Simultaneous allocation of land to the prospective investor while the
infrastructure is being developed by the government is a mechanism that
we expect from the government and request that the government takes
immediate action and give this project their full attention.
incidents of B2C transactions are clearly visible in that large
numbers of companies engaged in such e-commerce have shown remarkable
progress where the traditional retail shop concept would be of minimal
value in time to come. The major issue that we are facing today is the
absence of a mechanism to receive payments online from the consumer if
we are engaging in e-commerce in the proper sense. This perhaps is the
stepping stone for our own brand journey. In view of the growing demand
and the need to facilitate transactions of this nature, it will be
necessary for the government of Sri Lanka to take required action to
create a mechanism similar to PayPal enabling us to receive payments
“The establishment of the Directorate to monitor BOI
enterprises under the Department of Customs has created serious
complications in doing our business. We find that new directions are
coming from this Directorate creating more difficulties. This matter
needs to be sorted out with the Treasury as a priority item”.
S R Attygalle, Secretary, Ministry of Finance and Treasury and guest of honour Sarah Hulton, British High Commissioner to Sri Lanka, also spoke at the event.