Political stability, US export tariffs attract more businesses
Countries like India and Bangladesh are looking at opportunities available in Sri Lanka to export their products to the US following the recently imposed high tariffs on imports to the US and political stability.
With Sri Lanka enjoying a 20 per cent tariffs on exports to the US there is growing attraction with Indian and Bangladeshi companies looking to give orders to local factories for manufacturing of garments, JAAF Deputy Chairman and Omega Line MD/CEO Felix Fernando told The Sunday Times Business. While India has been slapped with a 50 per cent US tariff, Bangladesh is at the same level like Sri Lanka of 20 per cent but the country is facing a turbulent political scenario, affecting production.
Mr. Fernando explained that even prior to the US tariffs there had been growing interest from Bangladesh and some international brands to expand operations in Sri Lanka as they sought out a country with more political stability.
A few months back as well there have been interest by Bangladeshi manufacturers to buy factories in Sri Lanka in order to mitigate risks.
In the meantime the autumn/summer orders still face a risk factor based on the concerns whether the duty is absorbed by the brands or passed down to the customers, he noted.
Mr. Fernando explained that they however, believe that going forward there might be some reduction in garment exports to the US.
He noted however, that if there is more demand from other countries then there might be an increase in orders as a result of which Sri Lanka might need to increase its garment factory workforce.
Apparel exports have recorded a steady growth in July this year rising by 9.84 per cent to US$455.16 million compared with US$414.38 million last year during the same period. Sri Lanka’s exports to the UK are likely to be more favourable in the wake of the recent concessions granted for local exports.
January to July total exports reached $2916.10 million up 9.09 per cent from 2673.19 million during the same period of 2024. Growth was broad based across markets, with exports to the EU rising by 18.2 per cent and other markets increasing by 11.02 per cent.
A JAAF spokesperson identified these movements in the markets to reflect manufacturers’ ongoing efforts to meet buyer expectations on speed, quality, and compliance. Sustaining moments will require expanded trade opportunities, supportive policies, and a stronger focus on value addition across the supply chain.
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