Sri Lanka’s regional cumulating agreement with Indonesia will grant the country a greater access and enhance competitiveness within the EU apparel market.

Approved by the European Union this year, the agreement will enable Indonesia supply approved textile fabrics to Sri Lanka, which will then be processed into apparel products for export to the EU. This will help boost the apparel industry in Sri Lanka, notes Yohan Lawrence, Spokesperson, Joint Apparel Association Forum (JAAF).

Under this agreement, Indonesia will export fabrics to Sri Lanka, which will then re-process these materials to manufacture apparel products for the EU market. The agreement permits cumulation of origin for certain materials from Indonesia—specifically, HS Chapters 51 to 55, 58, and 60. Sri Lanka can produce textile products under HS Chapters 61 and 63 using regional cumulation, provided both countries remain in the Generalized System of Preferences (GSP) scheme. This ensures Sri Lanka a steady supply of high-quality materials, which is crucial as the country faces stiff competition from Bangladesh and Vietnam.

Dhammika Fernando, Chairman, Free Trade Zone Manufacturers Association, adds, Indonesia serves as a key source market for fabric imports used in Sri Lankan garment production for the EU.

While Sri Lanka is already negotiating a Free Trade Agreement with Indonesia, this new regional cumulation deal specifically benefits trade with the EU under the GSP Plus scheme.