Sri Lanka’s garment and textile sector struggles amid financial crisis

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“Today we somehow survived, but I don’t know about tomorrow,” Ranjith Koralage, head of Kolonna Manufacturing, told the BBC.

His factory, which makes clothes for Levi’s, Puma and Victoria’s Secret, is among dozens of others struggling to meet production targets due to fuel shortages, power outages and rising costs.

Clothing is the second largest source of foreign currency for the Sri Lankan economy. The sector had just recovered from being hit by the pandemic, reaching a value of $5.42 billion after fashion exports rose 22.93% year-on-year in 2021, according to provisional data released by the Sri Lanka Export Development Board.

But Sri Lanka is now facing its worst financial crisis in decades, with foreign exchange reserves down more than 16% to $1.93 billion in March, central bank data showed.

The shortage of dollars has left the country struggling to pay for imports including food, medicine and fuel, and the textile industry now fears the disruptions will see it lose business to India, Vietnam and from Indonesia.

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