Sri Lanka's apparel industry is export-driven, and the sector is promoted by the country's export development board as one that stands for quality and ethical production. With capital Colombo ready to host the Intex South Asia 2018 sourcing fair in November, Subir Ghosh presents a country snapshot.
The global apparel trade is made up very broadly of two types of countries-the big brothers like China, India and the United States, and the much smaller ones like Bangladesh, Vietnam, Sri Lanka and others. The latter bloc constituents are similar in nature: they are sure-shot small and hardly grow any cotton worth the name; and their economies are heavily dependent on exports, and in turn on the West. Of these small countries, there is one that stands out: Sri Lanka. The tiny island nation off the southern tip of big neighbour India embodies quality and has a vibrant fashion ecosystem of its own. It is tiny for sure-as many of 17 of India's states are bigger than that island. Sri Lanka's apparel export industry is one of the most crucial drivers of the economy. The industry has grown over the past four decades and now accounts for close to half of total exports and provides a third of the manufacturing employment in the country. Earnings from apparel exports in 2017 was $ 4.8 billion. In 2014, the industry provided direct employment opportunities to over 300,000 people and indirect to 600,000. As the US Department of Commerce's International Trade Administration summarises on the export.gov portal, "Sri Lanka has built its competitive edge on value-addition rather than cheap production cost, with greater emphasis on product quality and its ability to manufacture niche products. Despite increased international competition, exporters seem to be faring quite well."
A Market Two Few
The numbers clearly indicate the lopsided nature of Sri Lanka's exports-towards the United States (US) and the European Union (EU). According to Sri Lanka's Export Development Board (EDB), the biggest market in 2017 was the US ($2,140.42 million), followed by the United Kingdom ($802.26 million) and Italy ($430.53 million). The other markets were much smaller in size even to bring up for comparison. The fortunes of Sri Lanka's apparel industry are heavily dependent, some might even insist over-dependent, on the two markets. That might make Sri Lanka a bit vulnerable; at the same time, the same set of statistics would also indicate that the prospects of expanding to other markets are phenomenal.
Most wonder: can this trend continue, can this sustain the economy?
An interesting perspective comes from Asim Younoos, global CEO of Avirate (Pvt) Ltd, a high-street international label for women from the Timex and Fergasam Group (T&FG), one of the top five apparel manufacturers in Sri Lanka and among the top ten apparel manufacturers in the world. Younoos agrees that Sri Lanka is dependent on the two markets, but believes that the trend is shifting. He says, "Exporters are working with the Indian, Australian and MiddleEast markets. Asia is the next super power and will play a key role in the growth. Also, there are some countries that we do not have any trade agreements; thus, that makes it difficult to enter (those markets).