The trade group that represents Sri Lanka’s tentpole apparel industry on Tuesday praised the U.K. government’s announcement of liberalized rules of origin that will allow the country’s manufacturers to source up to 100 percent of their inputs from any geography while retaining duty-free access to the British market.
The easing of requirements, which were announced last month and will go into effect in early 2026 as part of a rejiggered Developing Countries Trading Scheme, represent a “significant upgrade” for Sri Lanka’s exports, said Yohan Lawrence, secretary general of the Joint Apparel Association Forum. Current rules grant the country’s garments tariff-free entry into the United Kingdom only when inputs hail from the South Asian region.
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By reducing restrictions on processing, the move will put Sri Lanka, an “enhanced preferences” nation, on a more even keel with “comprehensive preferences” countries that are given greater latitude because of their economic vulnerability, including rivals such as Bangladesh and Cambodia. This, Lawrence said, will provide its manufacturers with the flexibility to “deliver greater value to global brands and U.K. consumers alike.”
“We see this as an opportunity to expand trade, strengthen industry competitiveness and secure more jobs and livelihoods across Sri Lanka’s apparel sector,” he added. “This reform is a timely recognition of Sri Lanka’s role as a resilient and responsible sourcing destination.”
The DCTS is still a relatively new program, replacing the prior Generalised Scheme of Preferences as a “simpler and more generous” way to boost trade with developing countries in 2023. In July, the U.K. government said that upgrades to the DCTS will make it easier for businesses to trade with the United Kingdom while helping lower prices on the British high street.
The timing couldn’t be more auspicious. Sri Lanka counts the United Kingdom as its second-largest market for apparel, amounting to 15 percent of the $4.7 billion it reaped in 2024. The United States, which accounts for some 40 percent of Sri Lanka’s garment exports, making it their top destination, recently imposed an additional 20 percent tariff on all goods from the country. While significantly down from an initial ”Liberation Day” rate of 44 percent, the new figure has positioned the country no worse off than its biggest competitors, but also no better than most, save for India, which received a punishing 50 percent rate for purchasing Russian oil. For a nation that was on the verge of bankruptcy a mere three years ago, Sri Lanka must take whatever trading wins it can get.
“We want Sri Lanka to improve the utilization of the U.K.’s Developing Countries Trading Scheme for a wider range of goods, not just garments,” said Andrew Patrick, the British High Commissioner to Sri Lanka. “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.”
