UK Liberalises Trade Rules to Boost Sri Lankan Garment Exports from 2026

Sri Lankan garment manufacturers are set to gain unprecedented access to the UK market under liberalised trade rules scheduled to take effect in early 2026. The reforms, part of the UK’s Developing Countries Trading Scheme (DCTS), will allow Sri Lankan manufacturers to source up to 100% of garment inputs from any country while retaining tariff-free access to the UK.

Currently, Sri Lanka enjoys ‘Enhanced Preference’ status under the DCTS, which allows tariff-free exports provided inputs are sourced from the South Asian region and certain processing requirements are met. The upcoming changes will align Sri Lanka’s apparel rules with those of lower-income countries, such as Bangladesh, offering greater flexibility in sourcing materials and manufacturing processes. Notably, the rule requiring two significant manufacturing processes—such as fabric production and garment assembly—to take place in Sri Lanka will be removed.

British High Commissioner to Sri Lanka, Andrew Patrick, welcomed the reforms, stating:
“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 the garment sector in Sri Lanka, while helping lower prices on the UK high street.”

Mark Surgenor, President of The Council for Business with Britain, added:
“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 liberalised rules are part of the UK’s broader commitment to support developing countries’ competitiveness in global markets. In June, the UK also announced the creation of a new Asia Regional Cumulation Group comprising 18 countries. This allows Sri Lanka to source inputs for other products from any country in the group while still qualifying for preferential tariffs, further enhancing its trade potential.

With these reforms, Sri Lanka’s garment sector is poised for growth, strengthening trade ties with the UK and enhancing the country’s position in the global apparel market.