Meanwhile, Cooray and Fernando revealed that in order to enhance the benefits of GSP Plus, the industry stakeholders had submitted reports to the government requesting to source fabrics from Indonesia and South Korea, last year.
The Department of Commerce (DOC) has already commenced negotiations with relevant authorities in Indonesia and South Korea to enter into joint agreements with the EU to obtain GSP Plus for sourcing fabrics from these countries.
However, the progress of these negotiations has been impacted by the political crisis that persisted during last two months.
Apparel manufacturers are currently eligible for GSP plus concessions on woven fabrics only from the EU, Sri Lanka and SAARC countries.
“More or less, we are in the final stage now. Once we enter into agreements with the EU, our product will be more attractive to the EU importers.
“We are buying a lot of fabrics from China, where GSP Plus is not applicable. If we shift to Indonesia or South Korea, we can get this advantage. We will look more competitive in the market,” Fernando pointed out.
However, moving forward, he stressed that the apparel manufactures should focus more on BRIC countries with long-term targets as exports to the U.S. and the EU are getting more difficult and the growth opportunities in these markets are also becoming limited.
“It’s going to get difficult in Europe and United States as the consumer patterns and consumer complexities are getting tougher. Maybe you may not get the margins and desired pricing in the emerging markets. However, in the years to come, those are the markets which need to be looked at.”
Fernando noted that the proposed free trade agreement (FTA) with China and ETCA with India would facilitate Sri Lankan apparel manufactures to increase their exports to these countries.
For small and medium exporters to increase their exports, Fernando averred that increasing or the complete removal of the eight million apparel piece quota imposed on Sri Lankan apparel exports to India would be crucial, at least for the garments manufactured with Indian fabrics.