SJB MP Dr. Harsha de Silva recently addressed the growing challenges faced by Sri Lanka’s textile and apparel export sector. The former UNP State Minister told the media that with a significant year-on-year decline of 17% in April, the industry was in trouble.
De Silva emphasised the crucial role the textile and apparel industry played during the economic crisis, lending crucial support to keep the country afloat and providing employment opportunities to hundreds of thousands of people.
The top SJB spokesperson discussed several key points. Commenting on decreased global demand, MP de Silva asserted that the COVID-19 pandemic has led to a decrease in global demand for clothing, resulting in domestic wardrobe inventory build-up. This reduction in demand has affected the textile industry, particularly as big brands, anticipating a post-COVID surge, now face inventory build-up in their warehouses, the MP said.
Referring to factory closures and competitive environment, the SJB official said that as a consequence of the challenging market conditions, several factories have closed down, and others have been forced to place their workers on furlough. The competitive landscape in the garment industry has intensified as brands dictate cheaper prices, turning it into an auction-like scenario among countries in the region, the MP said.
Emphasizing the pivotal importance in long-term outlook and government initiatives, MP de Silva stressed the importance of protecting the vital textile industry, as the problem is expected to persist for another 6-12 months. He urged the government to take immediate action, including a re-evaluation and amendment of the 30% taxes on exports to alleviate the financial burden faced by exporters.
Tapping into the Indian market, too, should be a priority, the MP said, while highlighting the significant increase in spending power among Indians, particularly in states like Tamil Nadu, Karnataka, Telangana, Andhra Pradesh, and Kerala. He called for measures to attract India’s growing middle class and suggested renegotiating the existing Free Trade Agreement to remove barriers that restrict exports above $8 million to India.
The MP also addressed the need to seize opportunities from shifting investments. Pointing out that corporations and foreign direct investments were moving out of China and relocating to countries like Vietnam, Singapore, and India, De Silva urged the government to establish mechanisms, similar to India, to attract these investments. This would provide opportunities for the textile industry to grow and flourish, he said.
De Silva’s urgent call to action underlines the importance of supporting Sri Lanka’s textile and apparel export sector during these challenging times. By implementing the proposed measures, the government can mitigate the impact of the crisis, revitalize the industry, and position Sri Lanka for long-term growth and sustainability, the former UNPer said.