The British High Commission in Colombo says Sri Lankan garment manufacturers will gain unprecedented access to UK markets under liberalised trade rules taking effect in early 2026. 

Issuing a statement, the British High Commission said the reforms enable manufacturers to source up to 100% of garment inputs from any country worldwide while maintaining tariff-free access to the UK.

Under the UK’s Developing Countries Trading Scheme (DCTS), Sri Lanka receives benefits as an ‘Enhanced Preference’ country. Current rules allow tariff-free access to Sri Lankan garments if inputs are sourced from the South Asian region, along with restrictions around processing. 

The liberalised rules will now offer Enhanced Preference countries, including Sri Lanka, the same product-specific rules for apparel (chapters 61 and 62) as lower-income countries covered by the scheme, such as Bangladesh, which have ‘Comprehensive Preferences’.

The British High Commissioner to Sri Lanka, Andrew Patrick said: “We are pleased to confirm further details of the reforms to the DCTS. I know from my discussions with the JAAF, Sri Lankan manufacturers and UK brands that the changes are likely to have a significant positive impact on garment sector in Sri Lanka, while helping lower prices on the UK high street.”

The President of The Council for Business with Britain, Mark Surgenor, said: “The upcoming changes to the DCTS will further strengthen Sri Lanka’s exports to the UK. This is a particular success story for Sri Lanka’s garment industry where the proposed changes will mean that more of Sri Lanka’s garment exports to the UK could qualify for zero tariffs. The Council for Business with Britain is very supportive of these changes and looks forward to continuing our work with businesses to promote trade between the UK and Sri Lanka.”

The enhanced trade arrangements demonstrate the UK’s role as a progressive trade partner. By simplifying rules of origin, the reforms enable Sri Lankan manufacturers to compete more effectively in global markets while maintaining preferential access to the UK.

The Developing Countries Trading Scheme provides preferential trading arrangements for 65 developing countries. Sri Lanka holds Enhanced Preference status, offering significant tariff reductions across multiple product categories.

Aside from the changes to product-specific rules associated with garments, the UK announced in June the creation of a new Asia Regional Cumulation Group of 18 countries that Sri Lanka can source from for all other products eligible to access the UK’s preferential tariff benefits. Input sourced from another country in this regional group will be considered as originating in Sri Lanka, where the final processing or manufacturing takes place. Increasing cumulation provisions and adding value to exports in this way support countries to be competitive by allowing more products to qualify for preferential tariffs. (Newswire)

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The United Kingdom (UK) is implementing the Developing Countries Trading Scheme (DCTS) from today, June 19, 2023.

According to the British High Commission in Sri Lanka, Sri Lanka is one of 65 countries benefiting from the UK’s DCTS which provides tariff reductions and simpler terms of trade. 

The High Commission stated that the scheme allows Sri Lanka to trade with the UK tariff-free on 92 per cent of goods, leading to increased competitiveness of Sri Lankan products in the UK market.

The full statement of the British High Commission in Sri Lanka:

From Monday 19 June 2023, the UK is implementing one of the most generous preferential trading schemes in the world. Sri Lanka is one of 65 countries benefiting from the UK’s Developing Countries Trading Scheme (DCTS) which provides tariff reductions and simpler terms of trade. The scheme was announced last year, and legislation has now been finalised to bring it into force.

The British High Commissioner to Sri Lanka Sarah Hulton OBE said: “The UK is Sri Lanka’s second-largest export market and the DCTS demonstrates the UK’s continued interest in strengthening this trade relationship. We hope that Sri Lankan exporters will broaden their opportunities with the UK by making use of the wider number of products for which tariffs have been removed. The DCTS is a tangible example of the UK’s commitment to growing free and fair trade with countries like Sri Lanka, boosting economies, and supporting jobs.”

Speaking at the launch of the scheme, UK Minister for International Trade Nigel Huddleston said: “[The scheme] will create opportunities for businesses around the world, supporting livelihoods, creating jobs and diversifying local and international supply chains.”

The DCTS allows Sri Lanka to now trade with the UK tariff-free on 92% of goods, leading to increased competitiveness of Sri Lankan products in the UK market. Sri Lanka is well positioned to supply the UK due to increasing demand for sustainable, fair-trade, and healthier products. With more flexible rules of origin, it is easier for least developed countries to trade with Sri Lanka without losing tariff-free status, increasing the potential for supply chain development.

To support business take-up of the DCTS, the UK Trade Partnerships Programme (UKTP) has expanded and now covers Sri Lanka. UKTP provides technical assistance to almost-ready-to-export small and medium-sized enterprises (SMEs) and is delivered by the International Trade Centre (ITC). The programme will primarily provide trade promotion technical assistance to a selected number of Sri Lankan SMEs, preparing them to participate successfully in international trade fairs. This will improve the visibility of Sri Lankan producers, equip exporters with the necessary tools and knowledge, and facilitate their entry into new markets. (NewsWire)

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The United Kingdom’s new Developing Countries Trading Scheme (DCTS) will facilitate access to the UK market for Sri Lankan businesses across a wide range of industries, the British High Commissioner to Sri Lanka Sarah Hulton stated.

Hulton stated that the United Kingdom has selected Sri Lanka in its new preferential Developing Countries Trading Scheme (DCTS) for a deeper analysis of market potential.

She revealed this at a forum to promote DCTS, the successor to the GSP+ scheme post-Brexit, during an event held yesterday (14).

“Sri Lankan utilisation rates of some of the lines are relatively low and they are products that Sri Lanka exports to other countries but not to the UK. Expert analysis will help to address the shortcomings. The UK is keen that there will be a great basis for ensuring that Sri Lanka takes full advantage of the new DCTS,” she added.

Hulton further said, “We have simplified the scheme, making it more generous. UK trade preferences reduce import costs by over £ 750,000,000 every year, so it’s good for business in developing countries. It also helps reduce prices and increase choices for UK consumers, particularly on household items such as clothes and food.”

The DCTS was first announced by the Secretary of State for International Trade last August and has been designed to offer greater UK market access for developing countries, build stronger investment partners for the future and deepen global supply chains.

State Minister of Finance Shehan Semasinghe and Governor of the Central Bank of Sri Lanka Dr. Nandalal Weerasinghe were also present at the event. (NewsWire)

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