Greater access to Indian market for Lankan textiles

The Government of India has accepted Sri Lanka's request for relaxation in the requirement of fabric sourcing for five million pieces of RMG exports to India and approval processes are under way. Once the notification by the Government of India is issued to this effect, Sri Lanka could export eight million pieces of readymade garments to India at zero duty under the Indo-Lanka Free Trade Agreement, the Indian High Commission said.

Under the existing FTA arrangement, India has granted two sets of apparel quotas at zero duty to Sri Lanka: Three million pieces without fabric sourcing requirements from India and another five million pieces per year, which should be made only of Indian fabrics. Sri Lanka used the three million quota fully in the last few years, but only 10-15 percent of the quota for the five million pieces.

Further SAFTA duty concessions were notified on September 6. Under the revised SAFTA duty regime notified by India for non-LDC countries, Sri Lankan textile exports would attract a duty of five percent as against the earlier 11 percent. This will also facilitate greater Sri Lankan exports of readymade garments to India.

These decisions have been welcomed both by the Government of Sri Lanka and Sri Lankan industry represented by the Joint Apparel Association Forum (JAAF), as part of the steps taken by India to increase the export capacity of Sri Lanka and reducing the bilateral trade deficit.