Sri Lanka apparel exports and textile exports grew 7.96% in May 2026 to $394.14m. This export growth was described as a sign that demand from key markets is beginning to firm up after a difficult start to the year in the textile industry.
US market and trade context
The US led the improvement, with apparel shipments rising 15.36% to $149.96m. This growth in US‑bound exports comes as Sri Lanka prepares for a critical phase in its trade relationship with the US.
Sri Lanka is involved in a US trade investigation under Section 301 by the Office of the US Trade Representative concerning the prohibition of imports involving forced labour. The US trade investigation may result in additional Section 301 tariffs of either 10% or 12.5% on affected goods. According to a US government report published in June, Sri Lanka is named among 46 countries set to face the higher 12.5% tariff rate. By contrast, Bangladesh, Cambodia, Pakistan and Indonesia were each listed for the lower 10% tariff, having been recognised for actions taken over forced labour concerns. A public hearing on the tariff proposal related to Section 301 tariffs is scheduled for 7 July in Washington, with Sri Lankan industry bodies able to apply for a hearing slot until 22 June.
“May’s numbers are genuinely encouraging, and they reflect the trust our buyers continue to place in Sri Lankan manufacturing even amid a challenging trade environment,” says JAAF. “Our focus now is on securing a fair and competitive tariff outcome in Washington, so that this momentum can translate into long-term growth rather than a short-term gain. We remain confident that with the right policy support, the second half of 2026 can be considerably stronger for the sector.”
Performance beyond core destinations
During May, shipments to markets outside Sri Lanka’s traditional three core destinations rose 14.61% to $70.67m. Apparel shipments to the UK recorded an increase of 0.87%, while exports to the European Union fell slightly by 0.3% to $121.35m. Export growth outside core destinations reached 14.61% to $70.67m.
Year-to-date trend
Despite May’s upturn, JAAF notes that total exports of apparel and textile goods over the first five months of 2026 reached $1.93bn, down 4.68% compared to the same period a year earlier. All three main export markets the US, EU and UK recorded cumulative declines over that period. Over January to May, Sri Lanka apparel exports and the wider textile industry remained lower year on year.
