Sri Lankan garment exports gain tariff-free access to UK from 01 January

• Reforms to the UK’s Developing Countries Trading Scheme are now in force with liberalised trade rules taking effect from 1 January 2026.
• Manufacturers can now source up to 100% of materials globally while maintaining zero UK tariffs.
• Garment exports from Sri Lanka to the UK are expected to increase significantly under the new arrangements.

Sri Lankan garment manufacturers gain unprecedented access to UK markets under liberalised trade rules. The changes allow manufacturers to source up to 100% of inputs for garments from any country worldwide whilst maintaining tariff-free access to the UK market. Fewer processing requirements now apply, removing the previous rule that two significant manufacturing processes must take place in Sri Lanka.

The liberalised rules also include the creation of an Asia Regional Cumulation Group of 18 countries applicable to all other exports from Sri Lanka. This enables Sri Lankan manufacturers to source materials from regional partners whilst maintaining preferential tariff benefits.

The British High Commissioner to Sri Lanka H.E. Andrew Patrick said:

“The reforms that are now in force demonstrate the UK’s commitment to creating shared prosperity through trade partnerships. By simplifying rules of origin, we are supporting Sri Lanka’s economic growth by improving market access to the UK and helping to further diversify exports. We recognise Sri Lankan government’s ambition for export growth and continue to advocate for improved utilisation of the scheme. Therefore, I invite exporters to explore how they can benefit from these reforms and access the zero tariffs that the DCTS offers”

Welcoming the enforcement of the reforms, Mr Yohan Lawrence Secretary General of the Joint Apparel Association Forum (JAAF) said:

“The reforms to the UK’s Developing Countries Trading Scheme remove previous restrictions requiring materials to be sourced regionally. Sri Lankan manufacturers can now compete equally by accessing global supply chains. The garment sector accounts for over 60% of Sri Lanka’s exports to the UK and supports one million livelihoods across the country. It is a significant boost for our export potential to an important market,and we are excited to work with buyers and manufacturers in creating significant growth from this opportunity”

The President of the Council for Business with Britain (CBB) Mark Surgenor said:

“We are excited for the potential that the reforms will bring in enhancing the UK-Sri Lanka trade relationship. The most significant boost is to the garment sector. But with over 90% of products eligible for zero tariffs under the UK’s DCTS, we hope exports from other sectors will also seize the benefits arising from the creation of a larger number of regional countries from whom they can now source inputs. We are keen to see greater utilisation of the DCTS. This will form part of the CBB’s ongoing information sessions aimed at supporting Sri Lankan businesses in growing their trade with the UK.”

The changes respond to requests from many businesses and countries, including the Sri Lankan government and the Joint Apparel Association Forum. The UK is Sri Lanka’s second largest garment export market at approximately USD675 million in value, with exports expected to increase significantly under the new arrangements.

The Developing Countries Trading Scheme provides preferential trading arrangements for 65 developing countries. Further details are available at: www.gov.uk/government/publications/rules-of-origin-under-the-developing- countries-trading-scheme-dcts-are-improving