The Textile and Apparel industry occupies a prominent position in Sri Lanka’s
industrial structure. It is the biggest employer in manufacturing sector and it is
considered as Sri Lanka’s number one foreign exchange earner.
The Textile and Apparel industry is not merely a type of industry in Sri Lanka
but it represents the major economic, political and social changes that took place in
the country. After the independence the governments held the rein of the country
made attempts to initiate industrial activities. The local industries were protected by
the government intervention under the industrial policy in 1950s. However, Textile
and Wearing Apparel industry was not even included as a category of exports in
national accounts in early 1950s (Central Bank Reports). In the 1960s and early
1970s the existence of a well-run Textile industry was evident that was
underpinned by the government intervention following an import substitution
strategy. After the introduction of open economic policies in 1977 the outlook of the
industry was totally changed within an export-oriented strategy. Since the late
1970s the industry gradually acquired the relative importance of traditional
agricultural exports and became the highest export earner by the mid 1980s
(Tennakoon 1999). The total industrial exports account for approximately 77% of
the total exports while textile and Wearing Apparel industry solely accounts for 67%
of industrial exports.