Entry Strategy Differentiators and Summary: Dhaka, Colombo, Pakistan, and New Delhi Compared

India is the world's fifth-largest economy with a $3.9 trillion GDP, but competition is intense and barriers to entry are high. Pakistan has domestic demand potential driven by 240 million people, but political instability persists. Sri Lanka is under IMF restructuring following its 2022 default, while Bangladesh maintains 6.5% growth and occupies an unrivaled position in attracting manufacturing-focused FDI. This report systematically compares the four countries from macroeconomic indicators through sector-by-sector entry suitability, risk matrices, and final strategic recommendations.

Comparing macroeconomic indicators across the four countries clarifies the nature of the opportunities and risks each market offers Korean companies. Sri Lanka has the highest GDP per capita ($3,354) but still carries the aftereffects of its default; India's absolute market size is overwhelming but per capita income is $2,730, still in the lower-middle income range. Bangladesh's per capita GDP of $2,750 significantly exceeds Pakistan's ($1,540), and its growth trajectory is the most stable of the four.

India is dominant in absolute FDI inflows at $71 billion, but in terms of FDI as a percentage of GDP, Bangladesh (0.78%) is on par with Pakistan (0.49%) and Sri Lanka (1.22%). However, Bangladesh's FDI is concentrated in manufacturing — particularly garments and textiles — generating the largest real employment effect, and provides the most suitable environment for Korean company manufacturing base entry.

Bangladesh is the world's second-largest garment exporter ($47 billion) and the greatest beneficiary of global supply chain diversification (China+1). Abundant low-wage labor of 170 million people (monthly minimum wage $113), EU-EBA duty-free export privileges, a plan for 8 EPZs and 100 economic zones, and decades of accumulated success experience by major Korean companies (Korea Trading, Korea Fashion B, etc.) are strong foundations. The diversified industrial portfolio including IT-BPO ($2 billion in exports), pharmaceuticals (97% domestic self-sufficiency), shipbuilding ($3 billion+ in exports), and agri-food processing is also attractive.

India is the world's fifth-largest economy with 1.44 billion people and a $3.9 trillion GDP. With IT service exports exceeding $200 billion, the world's largest generic pharmaceutical producer, and a strong space and defense industry, India is actively attracting electronics, automotive, and semiconductor manufacturing under its Make in India policy. However, a complex regulatory environment, varying regulations by state, high tariffs (10–25%), and intense local competition act as high barriers to entry for SMEs.

Pakistan has vast domestic demand potential driven by 240 million people (world rank 5) and abundant natural resources (cotton, marble, copper), with $62 billion in infrastructure investment underway through the China-Pakistan Economic Corridor (CPEC). However, structural risks persist — including 12.3% inflation, chronic foreign exchange shortages, an energy crisis, and security concerns. Fiscal austerity continuing under IMF programs has kept consumer market recovery sluggish.

Sri Lanka has the highest per capita GDP in South Asia at $3,354 and holds high geopolitical value as a maritime hub in the Indian Ocean. Black tea, spice and gem exports, tourism (2.5 million visitors pre-COVID), and IT-BPO industry growth are noteworthy. However, the country is under an IMF restructuring program following its 2022 default, with external debt restructuring ongoing. The small domestic market of 22 million people is a limitation, but Sri Lanka can be utilized as a transit hub to India and Southeast Asia.

The following compares the three factors that determine the cost structure of market entry: tariffs, infrastructure, and labor costs. On tariffs, Bangladesh benefits from EU-EBA duty-free access and US GSP (excluding garments), although a gradual phase-out is expected after LDC graduation in 2026. India maintains high import tariffs (10–25%) under its Make in India policy, but provides PLI subsidies for domestic manufacturing.

Risk assessment is just as important as opportunity evaluation in entry decision-making. The core risks of the four countries were evaluated across four axes: political, economic, operational, and legal/regulatory. Bangladesh's primary risks are the 2024 government transition and bureaucracy, but these are relatively manageable compared to Pakistan (security and foreign exchange) and Sri Lanka (post-default effects).

Pakistan scores highest overall (25), while India (16) and Sri Lanka (17) score lowest. Bangladesh (23) is mid-range, but its growth rate (6.5%) and FDI returns relative to risk make its risk-return ratio the most favorable. Notably, Bangladesh's risks center on infrastructure and bureaucracy, which can be substantially mitigated through EPZ/SEZ tenancy and BIDA one-stop service utilization.

Korean company presence in South Asia is highest in India, but Bangladesh stands out in Korean company density relative to GDP and investment efficiency. The approximately 400 Korean companies in Bangladesh are primarily distributed across garments and textiles (60%), IT-BPO (10%), construction (8%), and trade (15%), and the accumulated decades of operational know-how from large companies such as Young One and Korea Fashion B provides invaluable references for later-entering companies.

The comparative analysis of the four countries reveals that Bangladesh provides differentiated strategic value across the following five dimensions. This demonstrates Bangladesh's standing not simply as a low-wage country, but as a strategic base that Korean companies must leverage in an era of global supply chain realignment.

The optimal entry destination varies depending on a company's scale, sector, and target market. The following table summarizes recommended entry destinations and rationale by major company type.