Exploring Barriers to International Trade Faced by Sri Lankan Exporters to the Indian Market
DOI:
https://doi.org/10.14738/assrj.82.9661Keywords:
International business, bilateral trade, Sri Lankan exports, Indian market, barriers to tradeAbstract
In recent decades, India has emerged as a major economy in the world. Although Sri Lanka is situated in close proximity to India and has entered into trade agreements with India to boost its international trade, it has still not been able to achieve the expected level of growth in exports to India. Based on the 2019 United Nations COMTRAD data, India is the third largest export destination of Sri Lanka, and the export revenue from trade with India amounted to US $ 759 million in 2019. However, the statistics in the past years indicate a drop in Sri Lankan export revenue to India from $ 767 million in 2018 to $ 759 million in 2019. In spite of different bilateral and multilateral trade agreements entered into between the two countries, Sri Lankan export performance still remains unsatisfactory. This indicates that apart from tariff reductions, certain other non-tariff barriers influence international trade performance between the two countries. Therefore, this study aims to explore barriers to Sri Lankan exporters which undermine their international trade performance in the Indian market. The study follows a qualitative research methodology and has collected data using face-to-face unstructured interviews with twenty (20) respondents representing different stakeholders engaged in the process of exporting from Sri Lanka to India. The collected data was coded and analyzed through template analysis. Findings revealed thirty-five (35) important factors which influence successful penetration into and performance in the Indian market. The results reveal that host market and home market characteristics have a greater impact on successful performance in the Indian market than product or firm characteristics.
References
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[1]. The Observatory of Economic Complexity (OEC)., Country profile Sri Lanka, 2019. <https://oec.world/en/profile/country/lka>.
[2]. Comtrade., 2020. <https://comtrade.un.org/>.
[3]. Hirantha, S. W., From SAPTA to SAFTA: Gravity Analysis of South Asian Free Trade. University of Jayewardenepura, 2004.
[4]. Sumanasiri, E. A. G., Impediments to Intra-regional Trade in South Asia: A Stakeholder Perspective. Journal of Economics, Management and Trade, 2020. 26(4): p. 21-36.
[5]. Rajakaruna, S.M., Chandrarathne, S.G., and Jayasundara, J.M., Effectiveness of South Asia Free Trade Agreement (SAFTA): A study of Trade Flows between Sri Lanka and India. 2019. 8: p. 51-68.
[6]. World Bank., The World Bank Annual Report: Year in Review. Washington, DC. 2008.
[7]. Sawhney, A., and Kumar, R., Rejuvenating SAARC: The Strategic Payoffs for India. Global Economy Journal, 2008. 8 (2).
[8]. De Mel, D., Bilateral Free Trade Agreements in SAARC and Implications for SAFTA, Promoting Economic Cooperation in South Asia. 2010: p. 89.
[9]. Weerakoon, D., SAFTA: Current status and prospects. Promoting Economic Cooperation in South Asia: Beyond SAFTA. Washington, DC: World Bank and New Delhi: Sage Publications India Ltd, 2010.
[10]. Sri Lanka Customs., 2020. <http://www.doc.gov.lk/index.php?option=com_content&view=category&id=13&Itemid=154&lang=en>.
[11]. Siriwardana, M., An analysis of the impact of Indo-Lanka free trade agreement and its implications for free trade in South Asia. Journal of Economic Integration, 2004. p.568-589.
[12]. Indian High Commission in Sri Lanka. 2020. <https://hcicolombo.gov.in/>.
[13]. Kelegama, S., and Mukherji, I. N., India-Sri Lanka Bilateral Free Trade Agreement: Six Years Performance and Beyond. 2007.
[14]. Varma, S., and Abhayarathne A., Impact of foreign trade agreements on trade flows: a study of the India - Sri Lanka free trade agreement. Journal of Business Thought, 2017. 7 (March).
[15]. Kelegama, S., India–Sri Lanka Free Trade Agreement and the Proposed Comprehensive Economic Partnership Agreement: A Closer Look. Regional Integration in South Asia, 2014. p. 469.
[16]. Perera, M.S.S., Impact of the Indo-Sri Lanka Free Trade Agreement on the Sri Lankan Economy: A Computable General Equilibrium Analysis. South Asia Economic Journal, 2008. 9(1).
[17]. Rahman, M., et al., Bangladesh’s export opportunities in the Indian market: Addressing barriers and strategies for future. South Asia Economic Journal, 2011 Mar. 12(1): p.117-141.
[18]. UNCTAD., The Least Developed Countries Report 2019. United Nations publication. New York and Geneva, 2019. <https://unctad.org/webflyer/least-developed-countries-report-2019>
[19]. Razzaque, M. A., Weaker Economies in SAFTA. Promoting Economic Cooperation in South Asia, 2010. p.373.
[20]. Bandara J.S., and Yu W., How desirable is the South Asian Free Trade Area? A quantitative economic assessment. World Economy, 2003 Sep. 26(9): p.1293-1323.
[21]. Rahman, M., et al., Bangladesh’s export opportunities in the Indian market: Addressing barriers and strategies for future. South Asia Economic Journal, 2011. 12(1): p.117-141.
[22]. Lofland, J., Analyzing Social Settings: A Guide to Qualitative Observation and Analysis. Wordsworth, CA, 1971.
[23]. Marshall, C., and Rossman, G., Designing qualitative research. 2nd edition, Newbury Park: Sage, 1995.
[24]. Miles, M.B., and Huberman, A.M., Qualitative Data Analysis: An Expanded Sourcebook. 2nd edition, Sage Publications, Newbury Park, CA, 1994.
[25]. Bandara, J. S., and Yu, W., How desirable is the South Asian Free Trade Area? A quantitative economic assessment. World Economy, 2003. 26(9): p.1293-1323.
[26]. Yatawara, R. A., Exploring Sri Lanka’s Free Trade Agreements with India and Pakistan: An Exporter’s Perspective. South Asia Economic Journal, 2007. 8: p. 219.
[27]. Kjeldgaard, D., Faurholt, C.F., and Ger, G., Grasping the global: multi-sited ethnographic market studies. In Handbook of qualitative research methods in marketing. Edward Elgar Publishing. 2006. p. 521-533.
[28]. Heide, J.B., and Weiss, A.M., Vendor consideration and switching behavior for buyers in high-technology markets. Journal of Marketing, 1995. 59(3): p.30-43.
[29]. Flint, D.J., and Woodruff, R.B., The initiators of changes in customers’ desired value: results from a theory building study. Industrial Marketing Management, 2001. 30(4): p.321-337.
[30]. King, N., Using Templates in the Thematic Analysis of Text. Essential guide to qualitative methods in organizational research. 2004. 28: p. 256.
[31]. Jain, N.K., Pangarkar, N., Yuan, L., and Kumar, V., Rapid internationalization of emerging market firms—The role of geographic diversity and added cultural distance. International Business Review, 2019 Dec 1. 28(6): p. 101590.
[32]. Samaddar, A., et al., Capturing diversity and cultural drivers of food choice in eastern India. International Journal of Gastronomy and Food Science. 2020 Dec 1. 22: p. 100249.
[33]. Doole, I., and Lowe, R., International Marketing Strategy – Analysis, Development and Implementation, 3rd edition. Thomson Learning, London, 5th. Edition. (4th 2004, 3rd Ed 2001, 2 nd edition.1999; 1 st edition.1994)
[34]. Hofstede, G., Cultures and Organizations: Software of the Mind. McGraw-Hill, New York, NY. 1991.
[35]. Tansuhaj, P., Gentry, J., John, J., Manzer, L., and Cho, B., A cross national examination of innovation resistance. International Marketing Review, 1991. 8(3): p.7-20.
[36]. Sriram, V., Neelankavil, J., and Moore, R., Export policy and strategy implications for small-to-medium sized firms. Journal of Global Marketing, 1989. 3(2): p.43-60.
[37]. Calantone, R., and Knight, G., The critical role of product quality in the international performance of industrial firms. Industrial Marketing Management, 2000. 29(6): p.493-506.
[38]. Griffith, D.A., Hu, M., and Ryans, J.K.Jr., Process standardization across intra- and inter-cultural relationships. Journal of International Business Studies, 2000. 31(2): p.303-323.
[39]. Menapace, L., and Fathinejad, N., 3 International standardisation versus adaptation of marketing: Globalisation versus Localisation. Analyses of economic rationale behind differences in the composition of seemingly identical branded food products in the Single Market, 62.
[40]. Tsai, W. S., Tao, W., Liu, Y., and Lee, Y., Understanding the Interplay between Brand Globalness and Localness among Homegrown and Foreign Global Brands in South Korea. Journal of Global Marketing, 2020. p. 1-18.
[41]. Malthotra, N.K., Agrawal,. J, and Baalbaki, I., Heterogeneity of regional Trading Blocs and global marketing strategies: A multicultural perspective. International Marketing Review, 1998. 15(6): p. 476-506.
[42]. Salvatore, D., International Economics. Wiley & Sons, Inc. Seventh Edition, 2002.
[43]. Akrasanee, N., and Tambunlertchai, S., Transition from import substitution to export expansion – the Thai experience. Naya, S., Takayama, A. (Eds), Economic Development in East and Southeast Asia, Institute of Southeast Asian Studies and East-West Center, Singapore and Honolulu. 1990.
[44]. Gan, W.B., Industrialization and the export of Malaysian manufactures. Hughes, H., (Edition), The Dangers of Export Pessimism: Developing Countries and Industrial Markets, ICS Press, San Francisco, CA, 1992. p. 202-223.
[45]. Hill, H., Indonesia: export promotion after the oil boom. Milner, C., Edition, Export Promotion Strategies: Theory and Evidence from Developing Countries, New York University Press, New York, NY, 1990. p.184-212.
[46]. Sharma, S., Shimp, T.A., and Shin, J., Consumer ethnocentrism: a test of antecedents and moderators. Journal of the Academy of Marketing Science, 1995. 23(1): p.26-37.
[47]. Chaudhry, N. I., et al., Impact of consumer ethnocentrism and animosity on brand image and brand loyalty through product judgment. Journal of Islamic Marketing. 2020.
[48]. Chakraborty, S., and Sadachar, A., Predicting Indian consumers' purchase intention from Western apparel brands. Journal of Fashion Marketing and Management: An International Journal, 2020.
[49]. South Asian Regional Standard Organization, 2020. <http://www.sarso.org.bd/>
[50]. Zucchel. A., and Palamara G., Niche Strategy and Export Performance. Advances in International Marketing, 2006. 17: p.63 – 87.
[51]. Bhardwaj, R. K., et al., Challenges and constraints of marketing and export of Indian spices in India. Proceedings of. International conference on technology and business management, 2011. March. p. 28-30.
[52]. Sinha, B., An analysis unto the validation of market segmentation from the Indian Vyapari’s Perspective. International Journal of Technical Research & Science, 2020. v(x): p.1-3.
[53]. Central Bank of Sri Lanka., 2019.
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Published
2021-02-08
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Sumanasiri, A. (2021). Exploring Barriers to International Trade Faced by Sri Lankan Exporters to the Indian Market. Advances in Social Sciences Research Journal, 8(2), 1–32. https://doi.org/10.14738/assrj.82.9661
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