Sri Lanka and Indonesia are set to submit a joint application to enhance their apparel exports under the United Kingdom’s tariff preference scheme for developing countries, according to a cabinet statement. Following the UK’s exit from the European Union, the UK Global Tariff (UKGT) and the UK Generalized Scheme of Preferences (UK GSP) have replaced the previous GSP.
For Sri Lankan apparel products to qualify for these benefits, finished garments must be made using locally knitted or woven fabrics. However, local garment manufacturers have struggled to fully capitalize on the UK’s trade scheme due to a shortage of domestically produced fabrics.
The cabinet statement emphasized that under the Import Scheme for Developing Countries, products that incorporate inputs from one regional group with preferential benefits can gain advantages when combined with products from another regional group with similar benefits. Both the ASEAN region (Regional Group I) and the SAARC region (Regional Group II) are identified as regions eligible for these preferential benefits.
To leverage these opportunities, Sri Lanka and Indonesia will jointly apply for benefits through inter-regional cumulation, taking necessary steps to procure fabrics and raw materials from Indonesia. This collaboration aims to facilitate the export of ready-made garments from Sri Lanka to the United Kingdom under favorable tariff conditions.