If Sri Lanka fails to reduce the 30% tariff imposed on Sri Lanka by the US under the “reciprocal duty” system, there is a risk that American garment buyers will turn to other countries with lower tariff concessions, garment industry professionals point out. This 30% tariff is scheduled to be implemented from August 1.
Vietnam is currently subject to a 20% tariff, and India is expected to have a tariff lower than 20%. Accordingly, garment industry professionals emphasize that maximum efforts should be made to reduce the 30% tariff imposed on Sri Lanka.
Reports have been published that a tariff lower than 20% may be imposed on India due to the upcoming trade agreement between India and the US. In such a situation, industry stakeholders say that India could pose the biggest threat to Sri Lanka’s garment industry.
Last year, Sri Lanka’s garment export revenue was US$4.7 billion, of which 40.04% or US$1.9 billion was earned from exports to the US.