The value of Sri Lanka’s apparel and textile (T&A) exports declined by 5.8 per cent to $2,398.1 million in H1, FY26 from $2,537.3 million recorded over the same period last year.
Of this, garment shipments declined by 5.8 per cent to $2,264.1 million, while primary textile exports contracted 5.8 per cent to $134.0 million. Manufactured textile items also dipped 22.8 per cent to $22.2 million. High interest rates and freight volatility have squeezed order volumes from primary Western buyers.
Industrial dominance anchors recovery focus
However, despite these contractions, textiles and garments exports accounted for 50.8 per cent of Sri Lanka’s total industrial exports, demonstrating the sector's crucial economic footprint. Central Bank data shows, the nation’s total textile imports declined by 7.1 per cent to $1,348.6 million in H1 2026, pointing to disciplined inventory management across domestic supply chains. Exporters are shifting focus toward high-value niche merchandise and regional supply chains to hedge against Western market shocks.
Cost pressures demand regional efficiency
Rising energy charges and raw material costs continue to compress profit margins across regional production hubs. Maintaining market share requires shifting focus from high-volume commodities to specialized, sustainable product categories, states Yohan Lawrence, Secretary General, Joint Apparel Association Forum. A case in point is regional manufacturer Linea Clothing which stabilized operating margins by integrating energy-efficient automation and sourcing eco-certified yarn locally, proving that structural upgrades offset global price competition.
Scaling zero-carbon smart production
Sri Lanka's textile and garment industry produces eco-friendly knitwear, performance activewear, and intimate apparel for global brands like Victoria's Secret and Nike. Targeted expansion focuses on scaling zero-carbon smart manufacturing and strengthening trade links across Asian markets. Revenue remains anchored to major Western buyers despite current export head-winds.
