Sri Lanka's garment industry has called for trade negotiations with Russia, China, Japan and Brazil, and wants the government to expand existing trade concessions from India, in a bid to reduce its dependence on the EU and US.

"Over 90% of our exports are now going into the US and EU. But there are other good markets, like Japan and Australia, that our competitors have got preferential access into," said Rohan Masakorala, secretary general of the Joint Apparel Association Forum (JAAF), the garment industry representative body.

"So in our five-year strategy report we have recommended that the government negotiate trade agreements with suitable countries. Our competitor countries are already doing this."

Sri Lanka's current market concentration in the US and the EU is seen as a risk. In addition to the loss of preferential trade terms recently, exports to both these markets were hit by the recession.

"New markets can't immediately take the place of the US and EU. But in the long run new markets will generate new growth opportunities and will also reduce risk by reducing market concentration," said Masakorala.

Apparel is Sri Lanka's biggest export, but at this point the industry benefits from some level of preferential access only from two markets – India and the EU.

Under the Indo-Sri Lanka trade agreement, Sri Lanka can export 3m pieces of garments to India at zero duty per year, without any entry-port or fabric restrictions.

Another 5m pieces, made of Indian fabrics, can enter India at zero duty or at a Margin of Preference of 75% - depending on the product category.

The EU's GSP+ scheme is no longer available but the industry can fall back on the EU's GSP scheme.

The industry says it gets no benefits from the US GSP, which is also under review.