There is also a stiff increase seen in the airline development within the countryaccounting for more foreign investment in terms of infrastructure management.The Board of Investment (BOI) of Sri Lanka approved an estimated 354 newforeign investment projects in the country committed to an investment of 3991.6billion in 2007 [Roh07]. According to the AFP reports Sri Lanka on a whole
attracted a whopping $600 million foreign investment of which $350 wasconcentrated towards the telecom sector[Roh07]. This shows that the islandcountry of Sri Lanka is free and open to foreign trade, providing investmentbenefits and perks to the investors. K. Trade statistics The trade dependency ratio i.e. the ratio of sum of exports revenue to importsrevenue was 66 in the year 2007. The major exports of Sri Lanka are tea, rubberand coconuts which account for 74% of the total exports in the country. Industrialexports have started to be a major contributor to export earnings with a stiff risefrom 14% - 76% in ten years. The industrial exports are powered by textiles andgarments industry accounting for 68% of the total exports. Transitional products dictate the Sri Lanka imports story apart from investmentgoods and consumer goods. Intermediate goods account for 51% of the totalimports, investment goods 27% and consumer goods 21%. The increase in theimport of investment goods can be accounted to the exploitations ininfrastructural facilities, construction and transport sector and the use of advancedand latest technology. Overall the export estimate of Sri Lanka was $7.899 billionin 2008 and the import estimate was $12.26 billion. The exchange rate in SriLanka was 108.23 per US dollar in 2008. L. Trade restrictions
PENETRATION OF RURAL AND URBAN MARKETSFor marketers Sri Lanka’s rural market offers a potential market, which is facing astiff competition in urban markets. The rural market environment is totallydifferent from the urban environment. Rural market offers a great potential marketfor the products and also for services because of two reasons1.Huge number of consumers2.In rural it is largely untapped market; in rural market they have very lesspenetration for many products.Sri Lanka rural markets is unique because - The wants of the rural consumers are not the same of the urban consumers, thesewants are regarding to their lifestyle, environment and values. [Pra09]IMPORTS POLICIESSri Lanka is open for foreign investment; they have a policy of tariff horizontalcode, which deals with the import licensing. Sri Lanka requires import license forover 400 items and at 6-digit level of THC, mostly for their security reasons likehealth, environment. To receive import license importers must pay 0.1 percent ofthe import price. The government of Sri Lanka has followed the transaction valuemethod to determine the CIF value and also in 2004 they have implemented WTOcustoms valuation agreement.