The United Kingdom has granted a major trade advantage to Sri Lanka’s apparel sector by further liberalising the rules under its Developing Countries Trading Scheme (DCTS), significantly strengthening Sri Lanka’s competitiveness in the UK market.
The UK, Sri Lanka’s second-largest export destination, introduced the DCTS on 19 June 2023 to provide preferential market access to 65 developing countries, including Sri Lanka. Under the scheme, more than 92% of Sri Lanka’s product lines qualify for duty-free access to the UK market.
The benefits of the DCTS were further enhanced with the implementation of liberalised rules of origin from 1 January 2026. Under the revised framework, Sri Lankan apparel manufacturers are now allowed to source up to 100% of their raw materials globally while continuing to enjoy zero-tariff access for garment exports to the UK. This change offers greater supply chain flexibility, improved cost efficiency, and enhanced production competitiveness.
Sri Lanka’s apparel exports to the UK were valued at approximately USD 660 million in 2024 and around USD 610 million during January–December 2025. Apparel accounts for nearly 73% of Sri Lanka’s total exports to the UK, highlighting the significance of the revised DCTS rules for export earnings and industrial growth.
Another key improvement under the revised scheme is the simplification of processing requirements, including the removal of the earlier condition that two substantial manufacturing processes must take place in Sri Lanka. These streamlined rules are expected to ease compliance and further strengthen the position of Sri Lankan apparel exporters in the UK market.
Beyond apparel, the revised DCTS also benefits other export sectors. Sri Lankan manufacturers can now source inputs from the Asia Regional Cumulation Group, comprising 18 countries, while still treating such inputs as originating in Sri Lanka for DCTS preferences. This expanded cumulation facility allows exporters greater sourcing flexibility while retaining preferential tariff benefits.
The liberalised DCTS framework positions Sri Lanka to integrate more actively into UK and global supply chains, supporting export diversification, sustainable economic growth, employment generation, and stronger free and fair trade relations between the two countries.
In this context, Chairman and Chief Executive Officer of the Sri Lanka Export Development Board, Mr. Mangala Wijesinghe, and British High Commissioner to Sri Lanka, Mr. Andrew Patrick, recently held discussions on the enhanced trade opportunities arising from the revised DCTS. The talks also focused on Sri Lanka Expo 2026 and upcoming brand promotion initiatives aimed at strengthening Sri Lanka’s presence in the UK market.
These engagements reaffirm the commitment of Sri Lanka and the United Kingdom to deepen bilateral trade relations and further position Sri Lanka as a reliable and competitive trading partner.