UK Grants Zero-Tariff Access to Sri Lankan Apparel Exports in Major Trade Boost
Colombo / London — The United Kingdom has granted zero-tariff export access to Sri Lankan apparel products, marking a significant milestone in bilateral trade relations and providing a major boost to Sri Lanka’s export-led economic recovery.
The decision, announced following extensive diplomatic and technical engagement, is expected to deliver immediate benefits to Sri Lanka’s largest export sector. Apparel exports from Sri Lanka to the UK are currently valued at approximately USD 675 million annually, with industry projections suggesting the figure could double to over USD 1.4 billion in the coming years as a result of the tariff concession.
Sri Lankan and British officials credit the breakthrough to sustained efforts by the British High Commission in Colombo, led by British High Commissioner His Excellency Andrew Patrick, alongside the High Commission’s Economic Affairs team. Officials also acknowledged the role played by the Sri Lankan Ministry of Trade, Indo Pacific -UK Minister Seema Malhotra , and counterparts at the UK Foreign, Commonwealth and Development Office (FCDO).
“This decision provides much-needed oxygen to the Sri Lankan economy at a critical moment,” a senior Sri Lankan trade official said. “Zero-tariff access dramatically improves competitiveness and sends a strong signal to international investors.”
Manufacturing Expansion and Job Creation
Industry sources indicate that the tariff-free regime has already triggered strong interest from UK-based manufacturers and retailers. At least six UK apparel manufacturers and two major retail groups are reportedly exploring plans to establish or expand manufacturing hubs in Sri Lanka, attracted by cost efficiencies, ethical manufacturing standards, and preferential market access.
The expansion is expected to generate between 30,000 and 45,000 new jobs, strengthening Sri Lanka’s position as a regional apparel manufacturing centre while supporting livelihoods across the supply chain.
“Sri Lanka has long been recognised for compliance, sustainability, and skilled labour,” said an industry analyst. “Removing tariffs makes the country even more attractive compared to competing manufacturing destinations.”
Beyond Apparel: Wider Export Gains
The zero-tariff concession forms part of a broader UK strategy to deepen trade ties with key partner countries following its exit from the European Union. In addition to apparel, Sri Lanka has secured full or phased tariff-free access for a range of other exports, including gems, food products, spices, and agricultural goods, with further liberalisation expected over the coming years.
UK trade officials have emphasised that strengthening trade with Sri Lanka aligns with Britain’s post-Brexit objective of diversifying supply chains and engaging with reliable Commonwealth and Indo-Pacific partners.
Diaspora’s Economic Role Highlighted
The development also underscores the growing economic significance of the Sri Lankan diaspora in the United Kingdom. Estimates suggest there are around 400,000 Sri Lankan-owned small and medium enterprises (SMEs) operating across the UK, ranging from corner shops and petrol stations to restaurants, food outlets, and logistics businesses.
In many towns and cities, Sri Lankan-origin entrepreneurs play a dominant role in the retail fuel sector, convenience stores, and food services, contributing substantially to local employment, tax revenues, and community cohesion.
“Trade policy does not exist in isolation,” a UK-based Sri Lankan business leader noted. “The diaspora acts as a living bridge between the two economies—creating demand, facilitating investment, and strengthening trust.”
Strategic Importance for Both Economies
For Sri Lanka, the zero-tariff facility enhances export earnings, supports foreign exchange inflows, and reinforces confidence in the country’s manufacturing base at a time of ongoing economic restructuring. For the UK, it ensures stable access to high-quality apparel while reinforcing partnerships with a country that has demonstrated resilience and reliability in global supply chains.
Trade officials from both sides have indicated that further engagement is planned to explore cooperation in sustainable manufacturing, skills development, and value-added exports.
As one senior diplomat observed, “This is not just a trade concession. It is a strategic investment in a long-term economic partnership between the United Kingdom and Sri Lanka.”
The zero-tariff agreement is widely seen as one of the most consequential developments in UK–Sri Lanka trade relations since Brexit, with tangible benefits expected for manufacturers, workers, and consumers in both countries.