The Sri Lankan budget has been announced. Among many things, it primarily focuses on strengthening the country's economy. Following the route listed by the budget, it becomes quite evident that there are multiple benefits for the apparel and textile sector.
Presenting the budget, FM Ravi Karunanayake said his government has proposed the formation of a textile cluster that would include sizing, dyeing and finishing units by the private sector. The government will support the formation of a textile cluster by providing investment relief to businesses that will invest in this venture and will also provide adequate space to save close to $2,000 million per annum.
The budget also enlists that garment exporters will also be granted permission to import branded products by enterprises for reworking, operating under the commercial hub regulation. These garments will then be exported to countries where there is no preferential treatment.
The textile and handloom industry of Sri Lanka has a significant domestic market and will generate employment for many. The Industrial Development Board (IDB) will provide the necessary infrastructure and training. The board has also been requested to increase engagement with the industrialists who require knowledge transfer and upgrade the industrial estates to support the small and medium enterprises (SME) sector. The government has proposed to allocate Rs 500 million towards this sector.
The government will also allow apparel companies based in the country to invest in overseas entities involved in apparel design and manufacture up to 5 percent of their average export turnover of the preceding three years in any given year. Profits and income of such enterprises established overseas should be received by the investing company in Sri Lanka.
The government has also proposed a significant shift in the policy framework by keeping a special room for vocational training, which will thus mean providing scholarships to anyone who wishes to follow a vocational training programme at a state operated institution. This will enable vocational training in Sri Lanka for all at no cost.