Sri Lanka apparel exports to US, EU fall in January, UK holds steady

Sri Lanka's apparel exports to the US and EU saw a decline in January, while the UK market remained stable. The Joint Apparel Association Forum (JAAF) reported that total exports for January reached $425.44 million, down from $437.07 million in January 2025. Shipments to the US dropped by 2.73% year-on-year, totaling $165.11 million in January 2026, compared to $178.29 million in the previous month. Exports to the EU, not including the UK, also fell by 1.93%, amounting to $126.99 million in January 2026, down from $141 million in December 2025. In contrast, the UK market showed slight growth, with a 0.23% increase to $61.71 million in January 2026, following a 12.95% rise to $55.12 million in December 2025. Exports to other regions fell by 6.07% in January 2026, totaling $71.63 million. JAAF noted that these January figures reflect uneven global demand and highlight the importance of improving "diversification and competitiveness." The UK’s modest growth aligns with trade reforms from the revised Developing Countries Trading Scheme (DCTS), which started on January 1, 2026. This reform has relaxed rules of origin, allowing Sri Lankan manufacturers to export clothing tariff-free to the UK, even if they source raw materials from around the world instead of just certain Asian countries. Additionally, a new uniform 10% temporary US tariff has replaced previous higher rates based on countries, giving Sri Lankan exporters better pricing certainty in the short term.