Sri Lanka’s apparel industry is set to gain a significant competitive edge in the UK market following the liberalisation of rules of origin under the United Kingdom’s Developing Countries Trading Scheme (DCTS), effective from 1 January 2026. The UK, Sri Lanka’s second-largest export destination, introduced the DCTS in June 2023, granting preferential market access to 65 developing countries. Under the scheme, more than 92% of Sri Lankan product lines qualify for duty-free entry into the UK.
The latest reforms mark a major shift for apparel exporters, allowing manufacturers to source up to 100% of raw materials globally while continuing to enjoy zero-tariff access to the UK. The removal of earlier requirements—such as the need for two substantial manufacturing processes to be carried out domestically—significantly improves supply-chain flexibility, reduces costs, and enhances competitiveness. Apparel exports to the UK stood at around USD 660 million in 2024 and USD 610 million in 2025, accounting for nearly 73% of Sri Lanka’s total exports to that market.
Beyond apparel, the revised DCTS expands regional cumulation benefits, enabling Sri Lankan exporters to source inputs from 18 countries in the Asia Regional Cumulation Group while retaining preferential tariff treatment. These changes are expected to support export diversification, employment growth, and deeper integration into global supply chains. Recent discussions between EDB Chairman and CEO Mangala Wijesinghe and British High Commissioner Andrew Patrick underscored the renewed momentum in bilateral trade ties, with a focus on leveraging the DCTS reforms through initiatives such as Sri Lanka Expo 2026 and targeted brand promotion in the UK.
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