Sri Lanka gains tariff-free apparel access to the UK starting January 2026, enhancing export opportunities and market competitiveness. The liberalised rules simplify sourcing, expand materials access, and are expected to drive significant growth in the garment sector.
New UK trade rules boost Sri Lanka apparel exports from January 2026
Sri Lankan apparel manufacturers are set to benefit from tariff-free access to the United Kingdom under revised trade rules that take effect from 1 January 2026, the British High Commission in Colombo announced. The reforms are part of the UK’s Developing Countries Trading Scheme (DCTS), which aims to simplify rules of origin and enhance market opportunities for developing nations.
Under the updated regulations, Sri Lankan manufacturers can now source up to 100 percent of materials globally while still maintaining zero tariffs on exports to the UK. Previously, exporters were required to complete two significant manufacturing processes within Sri Lanka. By removing this restriction, the new framework allows for greater flexibility in production and encourages the sector to expand its supply chain capabilities.
British High Commissioner to Sri Lanka Andrew Patrick emphasised the economic benefits, stating, “By simplifying rules of origin, we are supporting Sri Lanka’s economic growth by improving market access to the UK and helping to further diversify exports.” The reforms are expected to increase the competitiveness of Sri Lanka’s apparel sector in one of its most important markets.
The liberalised rules also introduce an Asia Regional Cumulation Group comprising 18 countries, which applies to all Sri Lankan exports. This framework allows manufacturers to source materials from a broader set of regional partners without losing preferential tariff benefits, further increasing supply chain flexibility and efficiency.
Yohan Lawrence, Secretary General of the Joint Apparel Association Forum (JAAF), highlighted the significance of the reforms: “The changes to the UK’s DCTS remove previous restrictions requiring materials to be sourced regionally. It is a significant boost for our export potential to an important market, and we are excited to work with buyers and manufacturers in creating significant growth from this opportunity.”
Mark Surgenor, President of the Council for Business with Britain (CBB), noted the broader impact of the reforms, stating, “With over 90% of products eligible for zero tariffs under the UK’s DCTS, we hope exports from other sectors will also seize the benefits arising from the creation of a larger number of regional countries from whom they can now source inputs.” This flexibility is expected to benefit not only apparel but other export sectors seeking to expand their UK market presence.
The UK remains Sri Lanka’s second-largest garment export market, valued at approximately USD 675 million. Analysts anticipate that exports will increase significantly under the new arrangements, supported by reduced compliance burdens and wider sourcing options. By simplifying rules of origin and offering zero tariffs for a broader range of products, the reforms are poised to reinforce Sri Lanka’s competitiveness on the global stage.
The Developing Countries Trading Scheme, which provides preferential trading arrangements for 65 developing countries, aims to promote sustainable trade growth by incentivising efficient production and cross-border collaboration. For Sri Lanka, the enhanced access to the UK market represents a strategic opportunity to strengthen trade relations, diversify export portfolios, and attract foreign investment into the garment sector.
Industry stakeholders have welcomed the reforms as a crucial step toward modernising Sri Lanka’s apparel sector. By enabling manufacturers to source materials globally while maintaining tariff-free access, the DCTS liberalisation supports scalability, operational flexibility, and improved engagement with international buyers. The changes are expected to drive employment growth, encourage innovation, and reinforce Sri Lanka’s position as a competitive garment exporter in the global market.
Overall, the new UK trade arrangements mark a significant milestone for Sri Lanka’s export economy. By providing tariff-free access and easing sourcing restrictions, the reforms create an environment conducive to growth, competitiveness, and sustainable development within the apparel sector and beyond. As manufacturers adapt to the new framework, the country is well-positioned to leverage enhanced trade opportunities and foster long-term economic growth.