Sri Lanka’s apparel industry has welcomed Budget 2027’s trade and investment measures but is pressing the government to implement them quickly — and to say whether smaller manufacturers can qualify for a new capital allowance that currently requires a US$ 3 million investment.
The Joint Apparel Association Forum (JAAF) said the budget adopted several of its own proposals, among them a 200 per cent allowance on qualifying capital expenditure for export-oriented manufacturers approved by the Board of Investment who invest at least US$ 3 million, the Daily Mirror reported.
The forum said the measure could push manufacturers to upgrade technology and expand capacity, but asked for a lower threshold for small and medium-sized enterprises, which would be shut out at US$ 3 million.
“Budget 2027 gives the exporters a constructive base to build on,” JAAF Chairman Felix Fernando said. “Announcements create confidence but implementation delivers results.”
What the industry wants clarified
JAAF welcomed the Rs. 1.99 billion allocated to the National Single Window for Trade, scheduled to connect exporters in the first half of 2027, and asked for detail on the scope and timing of the rollout. It backed plans to overhaul the Customs Ordinance, modernise the Temporary Importation for Export Processing scheme and move to paperless clearance.
The association also asked the government to identify the 800 tariff lines covered by a proposed 25 per cent cut in cess rates, and to say whether they include materials imported to build new manufacturing facilities.
On VAT, the budget proposes letting newly registered exporters qualify earlier for “eligible exporter” status and reviewing procedural requirements that can block legitimate refunds or input tax credits. JAAF sought clarity on the indicative exchange rate to be used for VAT on foreign-currency supplies.
The forum flagged energy costs and supply reliability as competitiveness factors, said it hoped to join the labour law review through the National Labour Advisory Council, and restated its support for Sri Lanka’s reapplication for EU GSP+ tariff preferences. It welcomed a Rs. 3.43 billion EU-funded project running from 2027 to 2030 to support export competitiveness.
Apparel is Sri Lanka’s largest export earner, with shipments exceeding US$ 5 billion in 2025.
The call echoes the Ceylon Chamber of Commerce’s response a day earlier, which also made timely implementation its central demand.
A note on the tariff line count
JAAF’s statement puts the cess reduction at “800 HS code lines”, and both filings reproduce that figure. The budget’s own figure, as reported separately, is 795 lines. The five-line gap is almost certainly rounding in the association’s statement rather than a disagreement about the measure, but no filing reconciles the two numbers — which is itself part of why JAAF is asking the government to publish the list.