U.S. Tariff Hits Sri Lanka Apparel; Teejay Eyes Egypt, Indonesia
Sri Lanka’s apparel industry is confronting a severe challenge as the United States imposes a steep 44% tariff on garment imports from the island nation, one of the highest duties applied to any exporting country. With the U.S. representing Sri Lanka’s largest apparel market, the move is expected to significantly dent competitiveness, potentially leading to a 20% decline in export volumes.
In response, Sri Lankan apparel manufacturers are urgently reassessing their market strategies. Industry leaders are exploring diversification opportunities and calling on the government to intervene with diplomatic and trade solutions to mitigate the fallout.
Among the companies leading the response is Teejay Lanka, a multinational textile manufacturer with operations in Sri Lanka, India and East Asia. The company is leveraging its geographic spread to soften the blow from the tariff shock. “While the ruling is being challenged in court, we are closely monitoring developments and have adapted our operations to ensure resilience,” said Group CEO Pududu de Silva in the company’s latest annual report.
Teejay Lanka’s diversified production footprint enables it to shift operations across multiple regions, ensuring supply chain continuity and cost optimization. Additionally, the company maintains a balanced customer portfolio between the U.S. and European Union markets, reducing dependence on any single region.
To further strengthen its position, Teejay recently expanded its global reach with new partner facilities in Egypt and Indonesia. These units commenced commercial production in FY 2024-25 and are supported by dedicated teams to ensure operational excellence. The expansion is part of the company’s broader strategy to grow sustainably while insulating itself from geopolitical and policy disruptions.
Teejay is also investing in renewable energy initiatives including solar and biomass projects to lower production costs and improve environmental sustainability.
Despite the headwinds, Sri Lanka’s apparel sector remains committed to ethical, sustainable manufacturing. Industry stakeholders are urging accelerated efforts to diversify trade relationships, especially with the European Union, Asia-Pacific, and Middle East markets.
