📈 Garment Exports Gain Duty-Free Edge in UK Market

Sri Lanka's apparel & textiles sector is set for a major boost as the UK's liberalised Developing Countries Trading Scheme (DCTS) officially took effect on 1 January 2026. • Core Reform: Manufacturers can now source up to 100% of raw materials globally while maintaining zero-tariff access to the UK. This removes the "double transformation" rule that previously required two major manufacturing steps to occur within Sri Lanka. • Sector Impact: • The apparel industry accounts for over 60% of exports to the UK and supports ~1 million livelihoods. • The UK is Sri Lanka's second-largest garment market, valued at approximately US$ 675 Mn. • New rules allow Sri Lankan firms to access global supply chains on a level playing field with regional competitors. • Regional & Export Diversification: • An Asia Regional Cumulation Group of 18 countries has been established. • This allows exporters to source inputs from these regional partners while retaining preferential benefits, encouraging diversification in non-garment sectors where over 90% of products are now eligible for zero tariffs. • Economic Outlook: Based on provisional data, garment exports are expected to increase significantly under these arrangements, supporting national economic recovery and employment.