Top Lankan apparel exporters set up units in India

by Elmo Leonard

Sri Lanka's leading apparel exporters are setting up units in India in a big way, well assisted by New Delhi, chairman The Ceylon National Chamber of Industry (CNCI) A. K. Ratnarajah said.

The apparel export sector now adds value by 32 percent to exports. It also employs a large number of young girls, who, in the alternative would end up as housemaids to West Asian countries.

Could the nation rely solely on garments as an industry? If not, the CNCI chairman called on those concerned to identify what competitive advantage other feasible sectors hold. CNCI had identified the potential sectors such as rubber based products, processed food, motor vehicle components and accessories and plastic based industries, Ratnarajah said.

There was much talk of industrial development, SME development and the like, but the creation of an enabling environment for such development and growth are slow paced. Industry is burdened with poor infrastructure, a "multitude of taxes", many government institutions to deal with, shortage of trained factory floor hands, rules governing the disengagement of personnel, low legal system, besides other constraints, Ratnarajah said.

Even, for the 300 industries program to be set up outside the Colombo and Gampaha districts to succeed, infrastructure in those places must be in place. It must not be confined to utilities, but include roads, housing, schools, health services and the like, Ratnarajah said. The local industry has to compete at home, with free imports from China, Malaysia, Taiwan, Thailand, Korea and Indonesia, often, being inferior quality goods. Also, under invoiced goods brought in as personal luggage.

These countries enjoy free trade agreements with India and Pakistan. Coincidentally, the export sector is hampered by higher cost of productivity due to a variety of factors; over dependence on imported inputs, and limited local supplies, Ratnarajah said. The manufacturing sector presently contributes 19 percent of the GDP and employs over 1.4 million people.

Markets for Sri Lankan industries have to be enlarged to carry the benefits of the economies of scale, besides, finding export markets are a must. Successive governments have ventured to enter into free trade agreements, while more are in the offing.

Sri Lanka already has FTAs with India, Pakistan, SAFTA, BIMSTEC and GSP with the European Union, and other agreements, Ratnarajah said.

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