The new target looks at a modest three to five percent annual growth, focusing on intimates, casualwear and woven pants which brings in over half of the industry's export revenues.

Sri Lanka, which had earlier set a target of four-billion dollar revenues by 2007, has now revised it down to five-billion dollars by 2010, amidst stiff competition from China, India, Vietnam, Cambodia and Bangladesh.

"Our forecasts is about a five to six percent growth on average each year, which can hopefully, easily bring us up to the five-billion rupee turnover target by 2010," said Ajith Dias, Chairman of the Joint Apparel Association Forum or JAAF, an industry apex body.

Over half the island's export earnings come from the three billion dollar clothing industry, with nearly all clothes shipped to international labels in the US and European Union.

Export earnings for the eight months to August 2007 grew 11 percent to 2.1 billion dollars, as higher sales to the EU offset a lower uptake from the US, according to JAAF data released this week.

The clothing industry is scrambling to retain its market share after the multi-fibre agreement, which guaranteed export market quotas, ended in 2004.

Sri Lanka has since benefited from the EU's General System of Preferences plus (GSP+) duty concessions, which has helped export earnings to these countries climb 25 percent to 907.5 million dollars for the eight months to August this year.

However, exports to the US has slipped nearly three percent to 1.1 billion dollars in Jan-Aug this year, as Americans bought more clothes from cheaper rivals like China (36 percent), Vietnam (27 percent), Indonesia (15 percent), Cambodia (19 percent), Bangladesh (13 percent), Pakistan (10 percent) and India (1 percent).

Over a million people currently find some employment in the apparel industry, which has carved out a niche to turn out high quality garments for top labels at a quick turnaround time.

Dias said casualwear clothes, intimates and woven pants have lifted Sri Lanka's fortunes in the price-sensitive global apparel market, and account for about 59 percent of total garment export earnings.

"Of this, lingerie is our most high profile product, but accounts for about 12 percent of export earnings," he said.

Sri Lanka is currently the biggest lingerie supplier to Victoria's Secret, and also ships clothes to top brands like GAP, Levis, Marks and Spencer, Nike, Speedo and Tesco.

JAAF is also looking at securing trade concessions, supply chain issues, and strategic alliances with designers and fabric suppliers.

As trade pacts take awhile to materialise, JAAF feels their "ethical clothes" campaign may gain some duty concessions, under a new law the US is proposing to encourage ethical trading practices.

Dias feels their image-building programme -- "Made in Sri Lanka: Garments without Guilt" -- would give Sri Lanka an edge to stand out as an "ethical clothing producer", when competing with rival nations in China and India.

Clothing is also Sri Lanka's highest net foreign revenue earner after remittances sent home by expatriate workers and tea.