The reforms to the UK’s Developing Countries Trading Scheme means Sri Lanka fashion manufacturers can now source up to 100% of materials globally while maintaining zero UK tariffs.
Plus, fewer processing requirements now apply, removing the previous rule that two significant manufacturing processes must take place in Sri Lanka.
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The liberalised rules also include the creation of an Asia Regional Cumulation Group of 18 countries applicable to all other exports from Sri Lanka. This enables Sri Lankan manufacturers to source materials from regional partners whilst maintaining preferential tariff benefits.
The changes are said to be in response to requests from many businesses and countries, including the Sri Lankan government and the Joint Apparel Association Forum.
The UK is Sri Lanka’s second largest garment export market at approximately $675m in value.
Sri Lanka’s Joint Apparel Association Forum (JAAF) secretary general Yohan Lawrence explained: “The reforms to the UK’s Developing Countries Trading Scheme remove previous restrictions requiring materials to be sourced regionally. Sri Lankan manufacturers can now compete equally by accessing global supply chains. The garment sector accounts for over 60% of Sri Lanka’s exports to the UK and supports one million livelihoods across the country. It is a significant boost for our export potential to an important market, and we are excited to work with buyers and manufacturers in creating significant growth from this opportunity.”
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By GlobalDataThe President of the Council for Business with Britain (CBB) Mark Surgenor added:
“We are excited for the potential that the reforms will bring in enhancing the UK-Sri Lanka trade relationship. The most significant boost is to the garment sector. But with over 90% of products eligible for zero tariffs under the UK’s DCTS, we hope exports from other sectors will also seize the benefits arising from the creation of a larger number of regional countries from whom they can now source inputs. We are keen to see greater utilisation of the DCTS. This will form part of the CBB’s ongoing information sessions aimed at supporting Sri Lankan businesses in growing their trade with the UK.”
