"Discussion Of Table 12:i. As multiple regressions is 0.63. So, it indicates that there is a very normal level of correlationbetween the dependent (Import) and independent variables (Domestic Income and Exchange rate).2ii. R is 0.36 which is a good fit as it means that 36% of the variation in Imports is explained by theDomestic Income and the Exchange rate. iii. A 1% appreciation in the Real Exchange rate causes the imports to increase by 3.030%.iv. A 1% increase in the domestic income causes 3.125 % decrease in the imports.Marshall-Lerner condition in Sri Lanka (1985-2013)Here, the affect of the changes in Real Exchange rate and the Domestic Income on the imports isrepresented in the value terms (Price *Quantity). Moreover, supply and demand quantities take time toadjust. There are various lap years involved.Apart from that there are various factors which influenced theimports of Sri Lanka which are discussed later in this paper. So, using export and import elasticity from theabove we can write Marshall -Lerner Condition = 9.61+3.03= 12.645. Therefore, since it is greater than 1,Marshall-Lerner equation is justified for Sri Lanka for the period 1985-2013. However, there are variouspoints worth noting which might have affected the results. 5. DISCUSSION AND CONCLUSIONThe results (from table 1 to table 12) show that the Marshall-Lerner condition is satisfied in India, Pakistan,and Sri Lanka though there is difference in the degree of satisfaction. Broadly we can conclude and comparethe outcomes of the three countries in the Table 13 in order to have a clear look at these country’seconomies. Table 13: Country-wise ComparisonVariable/Country India Pakistan Sri LankaExport Elasticity 0.97 6.669.61 (Highest)Import Elasticity 2.49 2.702 3.030World Income Elasticity 2.808 5.263 6.66 (Highest)Domestic Income Elasticity 1.545 2.307 3.125Marshall-Lerner Condition 3.46 (Verified) 9.368(Verified)12.645 (Verified) (Highest)Source: Compilation form Table 3, 4,7,8,11 and 12So, as we can see that the condition is satisfied in all the four countries, this means that thedepreciation will be helpful in raising the country’s economy but there are certain domesticconstraints which are listed below:Bottlenecks faced by India to increase exports Former Prime Minister Dr. Manmohan Singh analyzed in one of his studies that it is because of the India’sown domestic policies which are creating obstacles for the export-oriented growth in India. Complementaryto this, the Great economist AMARTYA SEN said that to see development in the export sector of theCountry, literate workforce and female empowerment are indispensable instruments. On the other hand,MONTEK AHLUWALIA has given importance to the infrastructural development for the growth of thecountry. He says that during the reform period, India experienced a boom in the international market forsome time in spite of the low infrastructure level but now all the little available is used up to the maximumand hence there is need to pay attention to this crucial part of the economy. In order to do so, one way is toadopt a pro-active approach to involve the private sector to the max and to create the pre-conditions forfinancing the private infrastructure projects. On the other hand, ASHOK GULATI (pg 10) argues that nowthe time has come to give importance to the institutional reforms and for the public investment in canal irrigation and organic farming.Moreover, the various plans under the Planning Commission have initiallyfocus on the service sector but the studies shows that now the service sector has reached the saturation level.Therefore, this is the correct time to put emphasis on the manufacturing sector.Apart from the abovedomestic constraints, there are some economic situations that also played a significant role in the foreigntrade of the country. One of the major economic phenomenon was the Recession of 2007.We can conclude as follows:a. India: High cost of domestic production, therefore, the industrial sector is craving formodernization, diversification, capacity building; prevalence of rampant poverty and unemploymentrequires and high Subsidies given.India’s needs a change in the domestic policies such as highpublic investment in the required areas such as to modernize and diversify the industrial sector.Moreover welfare programmes are needed in order to remove the obstacle in the country such asilliteracy and poverty. Therefore, a proper policy mix in the domestic front is the need of the time.Many programmes such as Make in India have been launched by PM Modi. Hoping them to becomea success and help India to top the ladder of the development. b. Pakistan: Poor infrastructural facilities, unable to take advantage of the international agreements,regulatory issues, the biggest issue the country facing is terrorism and a poor state-controlled market.Therefore, Pakistan needs immediate policies to recover the damaged economy, stabilize it and thenfollow the track of development. It will be highly beneficial for the economy as the Marshall- Lernercondition is satisfied with a very high Export-Elasticity.c. Sri Lanka: The Sri Lanka Civil war which lasted for 25 years from 1983 to 2009 had caused greathardship s for the growth of economy and apart there are other domestic constraints which this "