How to import to Sri Lanka from Thailand

In an era of globalisation, understanding the intricacies of international trade is crucial for small business owners. For those in Sri Lanka looking towards Thailand, a country known for its diverse market and robust export portfolio, the opportunities for business expansion and sourcing unique products are immense.

This guide serves as a comprehensive walkthrough for Sri Lankan businesses aiming to navigate the complexities of importing from Thailand, ensuring a smooth and compliant process.

Exploring Sri Lanka-Thailand trade dynamics

With its strategic location in Southeast Asia, Thailand has emerged as a key trading partner for Sri Lanka. The bilateral trade between these nations has been flourishing, with Thailand being a major source of electronics, machinery, and various agricultural products. According to the Observatory of Economic Complexity (OEC), the export value from Thailand to Sri Lanka was around US$409 million in 2021, signalling strong economic ties.

Sri Lanka's import tax landscape

Understanding the import tax landscape in Sri Lanka is vital for businesses importing goods from Thailand. The system comprises varying customs duties designed to protect local industries while supporting economic growth, with higher duties on luxury and allowed non-essential items.

Additionally, a standard Value-Added Tax (VAT) rate of 15% applies, though this is set to increase to 18% from 1 January 2023. Exemptions or reductions may, however, exist for certain essential goods. Import taxes are calculated based on the transaction value, which includes the cost, insurance, freight, and any other charges up to arrival in Sri Lanka, necessitating accurate invoicing for efficient tax assessment.

Utilising FTAs

The free trade agreements (FTAs) between Thailand and Sri Lanka are pivotal in shaping the trade dynamics between these two countries. These agreements, such as the pipelined Sri Lanka-Thailand Free Trade Agreement (SLTFTA), offer significant benefits, including tariff reductions on various products.

This FTA, once implemented, is expected to cover a wide range of goods and services, potentially reducing import costs for Sri Lankan businesses and making Thai products like electronics, automotive parts, and certain agricultural items more accessible. For Sri Lankan importers, keeping abreast of these agreements, their specific terms, and product coverage is essential. It enables them to strategically plan their imports, reduce costs, and improve market competitiveness.

Adhering to export and import regulations

Adhering to export and import regulations is crucial for businesses engaged in international trade, especially when importing goods from countries like Thailand to Sri Lanka. A thorough understanding of which items are restricted or prohibited is not just a matter of compliance, but also a key to avoiding potential legal consequences and significant financial losses.

Restricted and prohibited goods

Sri Lanka maintains a detailed list of items that are either restricted or outright banned from importation, encompassing a range of categories, including certain foods, plants, electronic items, and more. This list is crucial for businesses to understand, as non-compliance can lead to severe penalties.

Among perishable items, fish, grain, and other items which are in a damaged, stinking, or offensive condition are subject to restrictions due to health and safety standards. 

For example, importing dairy products from Thailand may require health certifications and adherence to strict quality control measures. Similarly, the import of meat for human consumption should also adhere to requirements and be licensed. 

To import live fish such as bettas, guppies and goldfishes, you will need to obtain health certifications from the relevant authorities in Thailand, secure an import permit from Sri Lanka, and adhere to quarantine and inspection procedures upon arrival to ensure the health and safety of the fish and local ecosystems. 

For importing perishables like fruits and ornamental plants such as orchids, you need a phytosanitary certificate from Thailand. Ensure you are aware of Sri Lanka’s specific import restrictions or additional certifications required. Proper packaging is also crucial to maintain quality during transit.

Other restricted or prohibited items include, but are not limited to:

• Chinese crackers
• Gas discharging appliances
• Beedy tobacco
• Indecent prints and other materials
• Japanese shaving brushes
• Mattur dhal (Lathyrus Sutivus)

It is advisable for businesses to consult with customs experts or use the services of experienced logistics providers like DHL Express to ensure full compliance with Sri Lankan import regulations.

On the other hand, Thailand restricts the following items from exportation:

• Buddhist statues, relics, and ancient artifacts
• Firearms, ammunition, explosives, and similar weaponry
• Botanical specimens and plant components
• Live animals and animal remains
• Edibles, pharmaceuticals, cosmetics, and dietary supplements
• Automotive components and parts
• Tobacco products, cigarettes, and alcoholic beverages
• Communication devices, radios, and telecommunications equipment

Goods prohibited from being exported from Thailand include:

• Illegal drugs and narcotics
• Adult content and explicit materials
• Counterfeit products and items infringing on intellectual property rights
• Counterfeit currency or coins
• Protected animals or wildlife listed under CITES (Convention on International Trade in Endangered Species of Wild Fauna and Flora)

Best products to import from Thailand to Sri Lanka

Among the most profitable items to import from Thailand are Thai silverware, cosmetics, and automotive parts. To start, research Sri Lankan market demand, establish contacts with Thai suppliers, and comply with Sri Lankan import regulations, including necessary documentation and customs procedures.