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Sri Lankan garment sector may miss US$5bn target

28th Nov 2012

The Sri Lankan apparel sector may not be able to achieve the US$ 5 billion target fixed by the Government for 2015, mainly due to waning exports and increasing costs of production, according to experts.
 
In the first three quarters of the current year, clothing exports from Sri Lanka plummeted 7 percent over same period last year. The main fall was witnessed in exports to the EU and the US, which dipped by 10 percent year-on-year and 6 percent year-on-year, respectively.
 
Sri Lankan garment sector is losing its competitive edge in world market due to high production cost, and leading buyers are now shifting to cheap sourcing destinations, experts said at the annual meeting of the Sri Lankan Apparel Exporters Association.
 
Moreover, the financial crunch in European countries is making buyers cost conscious, which, too, is affecting Sri Lankan apparel exports, according to industry analysts.
 
Both the incumbent and the outgoing chiefs of the association said the loss of EU’s Generalized System of Preferences (GSP) Plus concessions by Sri Lanka two years ago have slowly started impacting the Sri Lankan garment industry.
 
EU has not extended the GSP Plus concessions mainly due to the Sri Lankan Government’s failure to implement UN conventions on labour rights and right to association and formation of trade unions in free trade zones.
 
In this context, the association urged the Government to implement the recommendations made by the Lessons Learnt and Reconciliation Commission (LLRC).
 
 

Fibre2fashion News Desk - India