Embassy of India

Bangkok

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ECONOMIC & COMMERCIAL BRIEF

A. Overview:

i. Thailand is the second largest economy in the Association of Southeast Asian Nations (ASEAN) and the Greater Mekong Subregion (GMS). Thailand is an upper middle income country which maintains an open and market-oriented economy, and actively promotes foreign direct investment into the country. The country has well-developed infrastructure and has managed to transform its economy from primarily agriculture-based, to one of the most diverse in the region.

ii. India’s economic and commercial relations with Thailand are deep rooted in history, age-old socio cultural interactions and extensive people to people contacts. India’s ‘Look East’ policy (since 1993) and Thailand’s ‘Look West’ policy (since 1996) have metamorphosed into India’s ‘Act East’ and Thailand’s ‘Act West” policies, and are strongly contributing to consolidation of bilateral relations including economic and commercial linkages. India’s partnership with Thailand also has a strong regional dimension in the context of India’s engagement with ASEAN and membership of groupings such as BIMSTEC, Mekong Ganga Cooperation (MGC) and Asia Cooperation Dialogue (ACD). There has been regular high level exchanges between the two countries in the recent years and the closer political relationship has contributed to a new dynamism in economic and commercial ties.

iii. The strategic location of Thailand at the heart of South East Asia makes it the gateway to ASEAN as the region has integrated into the ASEAN Economic Community (AEC). In ASEAN region, Thailand is the 4th largest trading partner of India after Singapore, Indonesia and Malaysia. Bilateral trade between India and Thailand stood at US $ 16.04 billion in 2023 with exports from India to Thailand at US $ 5.92 billion and import from Thailand to India at US $ 10.11 billion(Source: Ministry of Commerce of Thailand).

iv. The fast-growing Indian market remains attractive for Thai investors, with vast opportunities available in infrastructure, agro & food processing, automotive & auto parts, pharmaceuticals & health, tourism, retail and renewable energy sectors. An Early Harvest Scheme (EHS), covering 83 products, under the proposed India-Thailand Comprehensive Economic Cooperation Agreement (CECA) was put in place in September 2004, and has contributed to the growth of bilateral trade. ASEAN-India Trade in Goods Agreement(AITIGA), which came into effect from 01 January 2010, also contributed to enhanced bilateral trade. ASEAN and India sides are currently working on review of AITIGA to make it more user-friendly, simple and trade facilitative for businesses.

B. Thai Economy:

i. Gross Domestic Product (GDP) of Thailand was US $ 513 billion in 2023 registering a growth rate of 1.9 % from previous year and with per capita GDP at approximately US$ 7,330 Thailand is an export-dependent economy with exports accounting for 55% of GDP. Services sector has the largest share of Thailand’s GDP at around 61%, industrial sector contributes to around 30% and agriculture, which has been a mainstay of the rural economy contributes to around 9%. Wholesale and retail trade formed major part of services sector and the Thai economy.

ii. Global trade of Thailand stood at USD 574.31 billion in year 2023, and registered a contraction of 2.40% from previous year. Total export of Thailand in year 2023 was USD 284.56 billion registering a contraction of 0.99 % from previous year, and total import of Thailand was USD 289.75 billion, which decreased by 3.74 % as compared to 2022. Major trading partners of Thailand in 2023 were China, USA, Japan, Malaysia, Taiwan, UAE, Australia, Vietnam, Singapore, Indonesia and India. Thailand is a net exporter of agricultural commodities, and a major global producer of several crops such as rice, rubber, cassava etc. Thailand is also a net fish exporter. Thailand imports energy products to meet its consumption needs. Other major export items by Thailand are Chemicals, Electrical Machines, electronic integrated circuits, jewellery and iron & steel product. Thailand has preferential trade agreements and Free Trade Agreements with the following countries:

Japan, Australia, New Zealand, South Korea, China, Peru, and Chile and implemented the Regional Comprehensive Economic Partnership (RCEP) which includes the ASEAN Member States and its Free Trade Agreement Partners.

iii. Total FDI into Thailand was around US $ 16.06 billion in 2023 with major investing countries including China, Singapore, USA, Japan, and Taiwan. Besides electrical appliances and electronics, major industries include automotive parts and assembly, food processing, cement, integrated circuits, petroleum products, textiles, footwear, toys, furniture, synthetic fibre, agriculture and tourism.

c. Bilateral Trade:

Bilateral Trade between the two countries has increased manifold in recent years. Trade between the two countries over recent years is as under:

  (amount in billion USD)

Year	Total trade	Thai Exports to India	Thai Import sfrom India
2019	12.14	7.34	4.80
2020	9.79	5.50	4.29
2021	14.99	8.58	6.40
2022	17.70	10.53	7.17
2023	16.04	10.11	5.92

(Source: Ministry of Commerce of Thailand)

As per the DOC, India data- Bilateral trade in FY 2023-24 stood at 14.94 billion.

ii. Major Indian Exports to Thailand: Jewellery including silver bars & gold; machinery and parts; metal waste scrap and products; chemicals; Vegetables and vegetable products; medicinal and pharmaceutical products; fresh aquatic animals, chilled, frozen, processed and instant, parts & accessories of vehicles; Iron, steel and products; electrical machinery & parts; coffee, tea and spices; electrical household appliances; Fabrics etc.

iii. Major Indian Imports from Thailand: Animal or vegetable fats and oils; chemical products; polymers of ethylene, propylene, etc. in primary forms; precious stones and jewellery; iron and steel and their products; machinery and parts thereof; motor cars, parts & accessories; copper and articles thereof; aluminium products; spark-ignition reciprocating internal combustion piston; automatic data processing machines and parts thereof; air conditioning machine and parts thereof; rubber products; rubber etc.

D. Investments:

i. Approved Indian investment in Thailand during the last few years is as under;

Year	Investment (million USD )
2019	23.38
2020	42.35
2021	124.73
2022	37.98
2023	29.44

[Source: BOI, Thailand]

ii. Investment from Thailand in India has increased in the recent years. Thai investments are mainly in infrastructure, real estate, Agro processing, electronics, automotive, food processing sectors, hotel hospitality sector and renewable energy sector. In 2021, Global Renewable Synergy Co., Ltd  made largest an investment of $453.29 million in India in renewable energy sector. Break-up of approved yearly FDI:

Year	FDI inflow (in million USD)
2019	34.92
2020	89.92
2021	533.86
2022	79.03
2023	225.01

[Source: DPIIT, MOC, GOI]

iii. Major Indian companies present in Thailand include Apollo Tyres (Thailand) Ltd, Camber Pharmaceuticals Co., Ltd, Coforge Ltd (former NIIT), Dr. Reddy’s Laboratories (Thailand) Limited, Dee Development Engineers Ltd., Dhoot Transmission Pvt. Ltd, Intellect Design Arena Limited, Ivax Paper Chemicals Ltd., Innovative Gloves Co., Ltd, Indian Overseas Bank, NRB Bearing (Thailand) Ltd,, Kirloskar Brothers Ltd, Kirloskar South East Asia Co., Ltd, Larsen & Toubro Limited, Polyplex (Thailand) Public Co. Ltd, Rajratan Global Wire Ltd., Parle Products Pvt. Ltd., Ranbaxy, Royal Enfield (Thailand) Limited, Saraff Group, Sicgil (Thailand) Ltd, SRF Industries (Thailand) Ltd, Tata group (Tata Steel Thailand, Tata Consultancy Services and Tata Motors),Tech Mahindra, The Aditya Birla Group, The New India Assurance Co., Ltd, Triveni Turbines DMCC, Usha Siam Steel Industries PCL, Wendt Grinding Technologies Ltd and CtrlS Datacenters (Thailand) Co., Ltd.

iv. Leading Thai companies in the fields of Agro-processing, construction, automotive, engineering, hospitality, electronics, banking and renewable energy have active and growing business presence in India. Major Thai companies active in India are – Charoen Pokphand Group, Chia Tai Co., Ltd, Italian Thai Development PCL, The Thai Union Frozen Products PCL, Thai Summit Neel Auto Pvt. Ltd., Delta Electronics (Thailand) PCL, Eureka Design India Pvt. Ltd., Srithai Superware PCL (Melamine tableware manufacturing), CP AXTRA PCL, Siam Cement Group (SCG), Magnolia Quality Development Corporation Limited, Dusit Group of Hotels, Vee Rubber Corporation Co., Ltd, Allied Metals(Thailand) Co., Ltd., Tong Garden Food Marketing Pvt. Ltd., Rockworth PCL, Ltd, Pranda Jewelry Pvt. Ltd., Krung Thai Bank PCL., Global Renewable Synergy Co., Ltd, Aapico Hitech PCL , Shera PCL, and Dutch Mill Thailand.              

v. Air connectivity between India and Thailand is stronger than ever and constantly growing. Currently there are around 400 plus flights per week. Both sides have recently agreed to a phased increment in the current seat entitlement in two stages, each stage comprising 7000 seats. This enhancement is bound to unlock new opportunities for businesses, promote tourism, and deepen cultural exchanges. Indian tourists are the fourth largest group after Malaysia, China and South Korea to visit Thailand in 2023. About 1.62 million Indian tourists visited Thailand in 2023. The number of Thai tourists to India was around 0.11 million in 2023. All major airlines of India & Thailand operate between the two countries such as Air India, Vistara Airlines, Thai Airways, Thai Air Asia, Indigo, Thai Lion Air, Nok Air and Spicejet.

vi. Port Authorities of both the countries are actively collaborating with each other to boost direct port-to-port connectivity. Three MoUs were signed between Ranong Port and Indian ports in Visakhapatnam, Chennai and Kolkata during the BIMSTEC Ports Conclave held from 7-9 November, 2019 in Vishakapatnam, India. Earlier on August 15, 2019 an MoU was also signed between Ranong Port and Krishnapatnam Port of India in Bangkok.

E. Institutional Mechanisms:

A Joint Trade Committee(JTC) (at JS/DG level) between the two countries has been established. The last meeting of JTC was hosted in India on 20 April 2023 at New Delhi. During the JTC, both sides reviewed the progress in Trade & investment and related issues concerning tariff, non-tariff barriers and market access were discussed.

F. Events organised in FY 2023-24:

i. Seminar on ‘Business Opportunities in India’ and ‘Incredible India Tourism Meet’ from 11-12 May 2023 in at Udon Thani.

ii. Virtual Buyer Seller Meet 2023 “Focus on Electronics and Computer Software” on 30 May 2023 in Bangkok.

iii. Seminar on ‘Essential Oil and Aroma Industry of India’ at India Thai Chamber of Commerce on 5 July 2023 in Bangkok.

iv. ‘Indian MSME Coir Expo-2023 from 15-16 July 2023 at ICONSIAM Bangkok.

v. Seminar on ‘Investment Opportunities in Coir Sector’ at ICONSIAM on 15 July 2023.

vi. World Food India Promotion Event 2023 on 25 August 2023 in Bangkok.

vii. Seminar on ‘Business opportunities in India’ and ‘Incredible India Tourism Meet’ on 30 August 2023 at Nakhonratchasima.

viii. Seminar on ‘Opportunities in Make in India’ on 11 October 2023 in Bangkok.

ix. Seminar on ‘Business opportunities in India’ on 30 November 2023 at Lamphun.

x. ‘Incredible India – Tourism Meet’ on 1 December 2023 at Chiang Mai.

xi. ‘Samvaad with Thai Man Made Fibre Association’ on 7 December 2023 at Bangkok.

xii. ‘Samvaad with Chemical Industry Club, FTI’ on 18 December 2023 at Bangkok.

xiii. ‘Andaman & Nicobar Investment Seminar’ on 19 January 2024 in Bangkok.

xiv. Make in India Pavilion @ Thailand Industrial Fair 2024 on 31 January to 3 February 2024 at BITEC

xv. Tourism Meet – “Visit Uttar Pradesh – The blessed land of Lord Buddha” on 2 March, 2024 at Indian Pavillion, Sanam Luang

xvi. India-Thailand Chemical Business Meet on 15 March 2024 at Bangkok