Sri Lanka's competitive advantage promises continuing growth. International companies that wish to invest in the Textile/Apparel sector should consider the comparative and competitive advantages offered :

- Awell established, export oriented manufacturing industry.

- Raw material is readily available.

- A literate and trainable workforce with excellent hand-to-eye coordination.

- Location and infrastructure advantages.

- Compliance with best international labour and environmental laws and practices.

- Availability of Electronics Visa information systems (ELVIS)

- Market and investor- friendly policies of the government.

- An array of attractive incentives extended for the textile/apparel industry.

- Availability of the GSP+ scheme of the European Commission which gives zero duty for Sri Lanka's GSPeligible exports to the 25 member states. This scheme came into effect from 1st July 2005. Thus companies, who manufacture in Sri Lanka qualify for zero duty on exports to the EU, provided the raw materials are wholy obtained from Sri Lanka or sourced from either the SAARC region or the EU.

- Preferential access to the Indian market including duty free concessions afforded through the Free Trade Agreement (FTA) between Sri Lanka and India.


Awell established, export oriented manufacturing industry
Sri Lanka's strongest advantage is its highly developed apparel-manufacturing sector, which has evolved into a powerful export oriented industry over two decades. Currently around 800 companies in Sri Lanka produce a wide range of apparel products including branded names most of them catering to the international market. Today clothing bearing the “Made in Sri Lanka” label can be found in most major department stores in the USA, UK, Germany and Australia.

A ready supply of raw material and an expanding resource base
Over the years the apparel industry has increased its avenues of raw material supply and expanded its resource base. Foreign and Local companies have set up textile mills/finishing plants and many accessory-manufacturing industries to serve the customers increasing needs of the industry which currently has a 70% import base. Products manufactured include items such as: buttons, zippers, hangers, yarn, thread, fabric, interlinings, packaging, elastic, padding, quilting etc. Services offered range from dyeing and finishing to screen-printing, embroidery, training, washing, etc. While most of these companies tend to be labour intensive, currently the introduction of modern technology and capital infusion has resulted in many existing factories becoming automated and upgraded. Computerization of inventory /stock control, etc., has also assisted in increased efficiency, leading to a rapid expansion of the industry.

Literate and trainable workforce.
Sri Lanka's labour force is considered the country's most valuable asset, of a population of 20 Mn. The textile /apparel industry provides direct employment to 270,000 people and indirectly over 1 Mn. The industry accounts for around 1/3 of total employment in the manufacturing industry, a fact that clearly demonstrates the industry strength and economic importance.

Potential investors in the textile/apparel sector should consider the following facts relating to Sri Lanka's labour.
50% of Sri Lanka's population is under 25 years.

Literacy rate is around 93% .

English is widely spoken and understood.

38,000 students graduate annually from 9 universities with more than 50% specializing in technical and business disciplines.

Availability of special Diploma/ Degree programes in Textile and Apparel by University of Moratuwa and other private institutes.

Competitive wages from US$ 50-100/ month.

High productivity, good hand-to-eye coordination, proven precision and manual dexterity.


Training and human resource development
Sri Lanka has a enviable record in human resource development and is grouped among the leading industrialized nations that have made significant headway in this area. Regarding human resource competitiveness, Sri Lanka has been ranked 35 by the World Bank far ahead of other SAARC and ASEAN counterparts. Sri Lanka considers her Human Resource to be her most valuable resource, and a vital factor in the implementation of the country's economic plans and development goals. Public and private sector textile and clothing training institutes serve the industry.