Sector Overview

Sri Lanka’s apparel industry started in the 1960s mainly producing textile and clothing for the local market under heavy protection. It was only a decade later that the concept of readymade garments with the focus on export-orientation began, ultimately expanding and becoming a contender in the global apparel industry in the 1980s, post liberalization of the Sri Lankan economy in 1977. By 1992, the garment industry had become the largest foreign exchange earner in the country (USD 400 million) overtaking the tea industry. By 2002, Sri Lanka’s textile and garment sector accounted for 6% of the GDP, 30% of industrial production, 33% of matter of fact, 52% of total exports and 67% of industrial exports.

Today, Sri Lanka’s apparel sector is a significant contributor to the growth of the country’s economy and a foremost foreign exchange earner. Employing nearly 15% of the country’s workforce, the sector provides over 390,000 direct employment and 600,000 indirect employment opportunities in the country. The apparel sector is also renowned for having the highest apparel exports per capita of any exporting nation in the region. The sector which accounted for the 27% of all exports in 1986 today accounts for 44% of the total exports of the country. The apparel sector realized a growth of 4.7% in 2017 with exports worth US$ 5,032 million in exports in 2017 compared to US$4.8 billion in 2016.

Sri Lanka’s apparel products are mainly exported to the USA (46%), and the EU (41%), while smaller quantities are exported to other countries and territories around the world. The main markets for Sri Lankan apparels are the USA, the UK, Italy, Belgium, Germany, Netherlands, France, Canada, Australia, China, Japan and South Korea. The continued demand from developed countries such as the USA and the EU for the manufacture of readymade branded garments has ensured that the sector remains competitive and focuses on reducing costs by introducing automated and technologically advanced processes to counter the challenge of increasing labor costs due to a reduction in supply.

Sri Lankan apparel sector has evolved from a traditional industry over the last three decades. Today, the apparel sector of the country is considered one of its most successful sectors, efficaciously catering to the needs of international apparel markets by providing sophisticated solutions, creativity and experience together with an array of supporting and supplementary services such as fashion design, R&D, and Innovation Centers to become the hub for the global apparel industry.

The Board of Investment of Sri Lanka (BOI) has been an integral part of the dynamic growth of the apparel industry since the 1980s. Having initially promoted the sector by granting tax holidays and other fiscal and non-fiscal concessions as incentives to invest in the sector, the BOI in 1992 introduced a program for garment manufacturers to move factory operations to rural areas of Sri Lanka by offering a special incentive package. This program resulted in 163 factories relocating to rural areas by 1995. The BOI continues our unique activities within the apparel sector to enable further growth and enhance productivity and opportunity for existing and new manufacturers willing to invest in the sector.

Key Contacts

Mr. Ranjith Dharmasiri
Senior Deputy Director
Telephone : +94 11 2434342
Mobile : +94 77 2957025
Email :

Investment in the Allied and / Ancillary sub-sectors:

  • Lingerie
  • Smart textiles (Wearable Technology)
  • Other Potential High-Value Clothing Items (Especially Niche Products)
  • Innovation & Research