Data from the Joint Apparel Association Forum (JAAF) revealed that the EU recorded the steepest fall in Sri Lankan apparel imports at 19.48%, while exports to other markets decreased by 18.54%.
Shipments to the US and UK experienced more modest contractions of 3.53% and 5.67%, respectively.
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Cumulatively, for January and February 2026, Sri Lanka’s total apparel exports declined by 6.91% compared to the same period last year.
The sharper contraction in European and other regional demand highlights increased competition and softer market conditions for exporters.
The downturn follows a similar trend among industry competitors in South Asia. Bangladesh’s apparel shipments to the EU fell by 25.25% in January 2026 to €1.43bn ($1.64bn) from €1.91bn in the previous year, indicating that weaker demand is affecting multiple countries in the region.
Sector representatives point to broader demand correction rather than country-specific issues as the cause of the decline, JAAF stated.
While demand-side pressures are broadly felt, countries differ in their capacity to respond, with Sri Lanka’s competitiveness still influenced by structural cost burdens, logistical frictions, and shifting sourcing requirements from global buyers.
Against this backdrop, JAAF suggested performance depends not only on external market conditions but also on how effectively domestic constraints are identified and mitigated.
JAAF added: “The current decline in exports reflects a broader softening in global demand, particularly in Europe, which is now evident across the region. Bangladesh’s apparel exports to the EU, for instance, fell by over 25% in January, indicating that this is not a Sri Lanka-specific issue but a wider market correction. That said, in a more competitive environment, domestic constraints become more critical. Improving logistics efficiency, ensuring cost competitiveness, and strengthening market access must now be treated as immediate priorities if Sri Lanka is to retain and grow its position in global apparel supply chains.”
