Boost for Sri Lankan garment sector after new UK trade measures
Source: gov.uk (2025-07-11)

Sri Lankan garment sector set to benefit following reforms to simplify imports from developing countries like Sri Lanka.

- Liberalised rules of origin will now allow for more garments manufactured in Sri Lanka to enter the UK tariff-free.
- Further measures will make it easier for countries like Sri Lanka to trade, supporting jobs and growth.
- UK businesses and consumers to benefit from more competitively priced products.
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 (JAAF). 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.

The 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.

Responding to the announcement Secretary General of the Joint Apparel Association Forum (JAAF) Yohan Lawrence said:

“We warmly welcome the UK’s Trade Strategy. JAAF has worked very closely with the UK Government to work on solutions to improve utilisation of the Scheme. 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.

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

Background

Launched in 2023, following the UK’s exit from the EU, DCTS is the UK’s flagship trade preference scheme. Covering 65 countries (including Sri Lanka) DCTS offers reduced or zero tariffs on thousands of products. It is one of the most generous schemes of its kind in the world. The recent changes further improve this offer. This will open up new commercial opportunities for UK businesses to build resilient supply chains, invest in emerging markets, and tap into fast-growing economies.

In addition to the DCTS changes, the UK 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:

The UK Trade Partnerships programme will continue to support on-going work on strengthening and rolling out Sri Lanka’s national organic standards, alongside completing certification audits of existing beneficiaries, and delivering training on digital marketing.

Following the work on establishing the SheTrades Commonwealth+ hub in Sri Lanka earlier this year, the UK will continue to support in building policy capacity to mainstream gender into trade policy.