Cabinet nod to extend duty concessions to apparel industry
The Cabinet of Ministers at its meeting on Monday approved granting duty concessions to import appliances and items needed for the apparel industry.
“The duty concessions will be granted to import items that are not manufactured locally,” Cabinet Co-Spokesman and Minister Bandula Gunawardena told journalists at the post-Cabinet meeting media briefing this week.
The proposal to this effect was submitted by Industries Minister Dr. Ramesh Pathirana to provide relief to the apparel industry which is dealing with price hikes of raw materials and the prevailing unfavourable economic situation in the country.
The apparel exports have become one of the main sectors earning much-needed foreign exchange despite multiple challenges of the COVID pandemic and ongoing economic crisis.
In June, apparel exports recorded an all-time high figure for a month of $ 537 million as well as in the first half with $ 2.8 billion, reaffirming the sheer resilience of the private sector-driven industry.
Investors are cashing in on the strong prospects of Sri Lanka’s apparel and textile exports sector, the country’s main export industry, which caters to some of the leading fashion brands globally.
The BOI has thus far signed agreements worth $ 76 million for both new investments and expansions in the apparel sector in 2022. The total pipeline – together with pending approvals for investments and expansions in apparel – currently stands at $ 165 million.
Besides expanding apparel manufacturing facilities, some investors are also eyeing lucrative opportunities in raw material production and backward vertical integration in the Sri Lankan apparel industry.
The apparel and textile sector recorded us$ 2.25 billion in export earnings during the during the first quarter of 2022 reflecting an 86% increase year-on-year.
FDI inflows to the apparel sector – considering the value of agreements signed with investors too as increased fourfold up to the end of June 2022 in comparison to January-June of the corresponding period in the previous year.
“Considering the challenges that Sri Lanka has overcome in the past, investors remain confident of the country’s prospects and resilience,” said Board of Investment Director-General Renuka M. Weerakone.
“Due to strong interest, especially among apparel industry investors, we recently set up three new re-investment teams to support investors. We have been receiving multiple queries regarding the availability of suitable land from investors looking to further expand their apparel manufacturing plants in Sri Lanka since many of them have seen an increase in orders.”