- Liberalised rules of origin will now allow for more garments
manufactured in Sri Lanka to enter the UK tariff-free.
- Further measures will make it easier for countries like Sri
Lanka to trade, supporting jobs and growth.
- UK businesses and consumers to benefit from more
competitively priced products.
On 10 July, the UK government unveiled a package of reforms to
simplify imports from developing countries like Sri Lanka.
Upgrades to the Developing Countries Trading Scheme (DCTS) make
it easier for businesses to trade with the UK and help lower
prices on the UK high street.
The changes, announced as part of the UK's wider Trade for
Development offer, aim to support economic growth in partner
countries including Sri Lanka while helping UK businesses and
consumers access high-quality, affordable goods. This
announcement builds on the UK's Trade Strategy published last
month.
New measures include simplifying rules of origin, enabling more
goods from countries such as Sri Lanka, Nigeria, and the
Philippines to enter the UK tariff-free — even when using
components from across Asia and Africa.
The announcement follows engagement with UK businesses and
international partners, major importers and trade associations.
This included the Sri Lankan government and the Joint Apparel
Association Forum (JAAF). The most significant positive change
for Sri Lanka is that the rules of origin for the garments sector
specifically will be liberalised. The changes will ensure that
DCTS countries can now source their materials from a wider range
of nations and will give manufacturers from countries such as Sri
Lanka the opportunity to take advantage of 0% tariffs on
garments. These changes are expected to be in place by early
2026.
The British High Commissioner to Sri Lanka Andrew Patrick
said:
“This is a win for the Sri Lankan garment sector, and for
UK consumers. With the UK being the second largest export market
and garments making up over 60% of that trade, we know
manufacturers here will welcome this announcement.
“We want Sri Lanka to improve the utilisation of the UK's
Developing Countries Trading Scheme for a wider range of goods,
not just garments. With the Sri Lankan government's ambition to
grow exports, and with the simplification of rules of origin for
other sectors too, we strongly encourage more exporters to
explore how they can benefit from the preferences offered by the
DCTS.
“The UK remains committed to working towards creating shared
prosperity for both our countries.
Responding to the announcement Secretary General of the
Joint Apparel Association Forum (JAAF) Yohan Lawrence
said:
“We warmly welcome the UK's Trade Strategy. JAAF has worked very
closely with the UK Government to work on solutions to improve
utilisation of the Scheme. We are delighted that, for garments,
it will now be possible to source more raw material regionally
and continue to qualify for duty free export to the UK. This will
be a game-changer for our trade with the UK under the DCTS.
“We believe that the changes will also deliver significant
improvements against the objectives of the Scheme. At around USD
675m in value, the UK is the second largest market for Sri Lanka
Apparel, accounting for close to 15% of apparel exports, while
the industry supports a million livelihoods across the country.
This announcement will help secure employment opportunities and
ensure sustainable growth in Sri Lanka by allowing us to compete
on equal terms with our major competitors, and we expect exports
to increase significantly when the new rules come into effect.”
Background
Launched in 2023, following the UK's exit from the EU,
DCTS is the UK's flagship trade preference scheme. Covering
65 countries (including Sri Lanka) DCTS offers reduced or zero
tariffs on thousands of products. It is one of the most generous
schemes of its kind in the world. The recent changes further
improve this offer. This will open up new commercial
opportunities for UK businesses to build resilient supply chains,
invest in emerging markets, and tap into fast-growing economies.
In addition to the DCTS changes, the UK will continue to provide
targeted support to help exporters in Sri Lanka to access the UK
market and meet import standards particularly focused on
agri-foods and apparel sectors. This is through programmes being
delivered by the International Trade Centre (ITC) in partnership
with the Sri Lanka Export Development Board:
-
The UK Trade Partnerships programme will continue to support
on-going work on strengthening and rolling out Sri Lanka's
national organic standards, alongside completing
certification audits of existing beneficiaries, and
delivering training on digital marketing.
-
Following the work on establishing the SheTrades
Commonwealth+ hub in Sri Lanka earlier this year, the UK will
continue to support in building policy capacity to mainstream
gender into trade policy.
