- UK simplifies trade rules under DCTS, benefiting developing nations.
- Sri Lankan apparel industry gains zero-tariff access to the UK market.
- Reforms are expected to increase exports and support local livelihoods.
The UK government announced a set of reforms to streamline imports from developing nations such as Sri Lanka. The improvements to the Developing Countries Trading Scheme (DCTS) facilitate trade with the UK for businesses and contribute to reduced prices on the UK high street.
The modifications, revealed as a component of the UK’s broader Trade for Development initiative, seek to enhance economic development in partner nations such as Sri Lanka while enabling UK businesses and consumers to obtain high-quality, cost-effective products. This announcement expands on the Trade Strategy of the UK that was released last month.
New measures involve streamlining rules of origin, allowing more products from nations such as Sri Lanka, Nigeria, and the Philippines to enter the UK without tariffs — even if they incorporate parts from various regions in Asia and Africa.
The announcement comes after discussions with UK businesses and global partners, key importers, and trade organizations. This involved the Sri Lankan government and the Joint Apparel Association Forum (JAAF). The most important beneficial change for Sri Lanka is that the regulations of origin for the apparel industry will be relaxed.
The modifications will guarantee that DCTS nations can now obtain their materials from a broader selection of countries and will provide manufacturers from countries such as Sri Lanka the chance to benefit from zero percent tariffs on apparel. These modifications are anticipated to be implemented by early 2026.
The British High Commissioner to Sri Lanka, Andrew Patrick, said, “This is a win for the Sri Lankan garment sector and for the UK consumers. With the UK being the second largest export market and garments making up over 60 percent of that trade, we know the manufacturers here will welcome this announcement. We want Sri Lanka to improve the utilisation of the UK’s DCTS for a wider range of goods, not just garments.
With the Sri Lankan government’s ambition to grow exports and with the simplification of rules of origin for other sectors too, we strongly encourage more exporters to explore how they can benefit from the preferences offered by the DCTS. The UK remains committed to working towards creating shared prosperity for both our countries.”
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Responding to the announcement, JAAF Secretary General Yohan Lawrence said, “We warmly welcome the UK’s Trade Strategy. The JAAF has worked very closely with the UK government to work on solutions to improve utilisation of the scheme. We are delighted that, for garments, it will now be possible to source more raw materials regionally and continue to qualify for duty-free export to the UK. This will be a game-changer for our trade with the UK under the DCTS.
We believe that the changes will also deliver significant improvements against the objectives of the scheme. At around US$675 million in value, the UK is the second largest market for Sri Lanka apparel, accounting for close to 15 percent of apparel exports, while the industry supports a million livelihoods across the country. This announcement will help secure employment opportunities and ensure sustainable growth in Sri Lanka by allowing us to compete on equal terms with our major competitors and we expect exports to increase significantly when the new rules come into effect.”
Introduced in 2023, after the UK left the European Union, the DCTS serves as the UK’s leading trade preference program, encompassing 65 nations (Sri Lanka included) and providing lower or no tariffs on numerous goods. It is among the most generous programs of its sort globally.
The recent modifications enhance this proposal even more. This will create new business opportunities for UK companies to develop robust supply chains, invest in developing markets, and access rapidly expanding economies.