SL Textile exports expands amidst economic crisis and other challenges
By: Staff Writer
Colombo (LNW): Textile exports from the island nation by 5.9 per cent year-on-year to US $88.9 million during the first quarter of 2023 amidst economic crisis and other internal challenges.
The exports of other made-up textile articles stood at $26.1 million during the same period, down 19.6 per cent, according to the central bank’s ‘External Sector Performance’ report.
Textiles, garment, and other made-up textile articles’ exports together accounted for 53.62 per cent of all industrial exports from Sri Lanka during the period under review, the report showed.
The exports of all textile products totalled $1,273 million in January-March 2023, while Sri Lanka’s total industrial exports stood at $2,374.7 million in the first quarter of the current year.
In March 2023, all textile products exports from the nation declined by 10.2 per cent year-on-year to reach $417.2 million.
Category-wise, garment exports decreased by 10.7 per cent to $379.5 million, while textile exports eased 0.3 per cent to $28.5 million. The exports of other made-up textile articles were down by 15.6 per cent to $9.3 million.
On the other hand, imports of textiles and textile articles eased 31.3 per cent to $604.6 million, while clothing and accessories imports were down by 36.6 per cent to $45.7 million during January-March 2023.
Economic expert and SJP MP Harsha de Silva highlighting the challenges faced by Sri Lanka’s textile and apparel export sector emphasised the crucial role the textile and apparel industry played during the economic crisis, lending crucial support to keep the country afloat and providing employment opportunities to hundreds of thousands of people.
The COVID-19 pandemic has led to a decrease in global demand for clothing, resulting in domestic wardrobe inventory build-up.
This reduction in demand has affected the textile industry, particularly as big brands, anticipating a post-COVID surge, now face inventory build-up in their warehouses.
As a consequence of the challenging market conditions, several factories have closed down, and others have been forced to place their workers on furlough.
The competitive landscape in the textile industry has intensified as brands dictate cheaper prices, turning it into an auction-like scenario among countries in the region.
De Silva stressed the importance of protecting the vital textile industry, as the problem is expected to persist for another 6-12 months.
He urged the government to take immediate action, including a reevaluation and amendment of the 30 percent taxes on exports to alleviate the financial burden faced by exporters.
De Silva highlighted the significant increase in spending power among Indians, particularly in states like Tamil Nadu, Karnataka, Telangana, Andhra Pradesh, and Kerala.
He called for measures to attract India’s growing middle class and suggested renegotiating the existing Free Trade Agreement to remove barriers that restrict exports above $8 million.
With corporations and foreign direct investments moving out of China and relocating to countries like Vietnam, Singapore, and India, De Silva urged the government to establish mechanisms similar to India to attract these investments.