Obviously I need the correct import statment to solve this problem. According to the docs for AndroidJUnit4, this should be
import android.support.test.runn
If you're using project with multiple build-type then the selected build-type in build-variant window must be mentioned with testBuildType tag in module's build.gradle file.
For e.g.: If you're using build type debug then you should add android{testBuildType "debug" }, if using stage then add android{testBuildType "stage"} statement in android tag.