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A special meeting of the Sri Lanka Garment Manufacturers Association (Domestic) was held recently to discuss the severe crisis situation the industry is faced with and to formulate measures to alleviate the threats to the industry, which sustains about 500,000 people in the formal and informal sectors.

The Association said that large volumes of ready-made garments, at under-valued prices, are imported from countries where monetary incentives are given to exporters.

According to Customs statistics, the revenue collected by the Government on ready-made garment imports has been only Rs. 169 million in 2001 and Rs. 103 million in the first six months of 2002. Many large retailers have larger annual turnovers than this.

It was also pointed out by the Association that most courier-passengers bring in garments in commercial quantities, sometimes even up to 200 kg per passenger. These are released without proper valuations and at minimal or no duty. The combined effect of such activities has forced the industry to the brink of collapse, thereby threatening the livelihood of those employed in the sector.

"The State aims to make the country a high profile centre for garments, but in contrast, the domestic industry is heavily discriminated against, by laws, regulations, and other restrictions, preventing the industry to expand and flourish," they said.

The Association is of the view that the State should remove the tariff structure on the domestic garment manufacturing industry inputs, and impose restrictions on the volume and value of imports to provide a level playing field.

It also resolved to request the government to permit domestic manufacturers to purchase raw materials, accessories and packing materials from the Board of Investment sector on a duty-free basis and in rupees to reduce production costs.The Association is of the view that setting up a minimum floor price for imported garments, where there is no value addition by employing Lankans, will help the State to increase its present revenue from such imports to at least fivefold.

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