• Power tariff hike and fuel costs push production expenses higher
• Industry warns orders shifting to Vietnam, Bangladesh and India
• Calls for targeted electricity relief to safeguard export sector

The Sri Lanka Chamber of Garment Exporters (SLCGE) warned that Sri Lanka is gradually losing market share to more competitive countries such as Vietnam, Bangladesh, and India, stating that rising fuel prices and electricity tariff hikes are driving up production costs.

Speaking to The Daily Morning yesterday (17), SLCGE Vice President Rumesh Perera said the recently announced 18 per cent electricity tariff hike for domestic consumers using over 180 units had created additional pressure on garment factories already struggling with rising operational costs.

“We have not faced the immediate shock yet because we are currently supplying already secured orders. But when we now calculate costs for future production, the cost per garment unit has increased. If we cannot offer competitive pricing to our clients, we risk losing a considerable volume of orders to other competing countries,” he said.

He noted that although some large-scale factories had shifted to green energy solutions, the majority of garment factories in Sri Lanka still depend heavily on the national electricity supply. “The garment sector is facing a major challenge. If the Government can introduce a programme to provide electricity at a lower price for manufacturers, the industry will be able to sustain itself,” he added.

He further said Sri Lanka’s manufacturing costs were already higher than those of competing countries even before the latest tariff increases. “We recently increased factory workers’ wages following the new private sector basic salary requirements. At this point, we cannot further increase salaries without losing our profit margins and risking the loss of orders. At the same time, factory workers are also struggling with the rising cost of living,” he said.

Sri Lanka’s garment industry remains the country’s largest industrial export sector, generating more than 40 per cent of total merchandise export revenue and contributing around seven per cent to the national GDP. The industry directly employs over 350,000 people and is considered one of the country’s leading sectors for female workforce participation and ethical manufacturing.