India Thailand Economic & Commercial Relations

Overview

1. Thailand is the second largest economy in the Association of Southeast Asian Nations (ASEAN) and the Greater Mekong Subregion (GMS). It is an upper middle income country with a Gross Domestic Product (GDP) of US$ 397.6 billion in 2016. The growth of GDP in Thailand has averaged between 3% to 4% in the last decade.
2. India’s economic and commercial relations with Thailand are rooted in history, age-old socio- cultural interactions and extensive people to people contacts. India and Thailand are celebrating 70 years of diplomatic relations in 2017. India’s ‘Look East’ policy (since 1993) and Thailand’s ‘Look West’ policy (since 1996) which has now metamorphosed into India’s ‘Act East’ and Thailand’s ‘Act West” are strongly contributing in consolidating bilateral relations including economic & commercial linkages.
3. Two-way trade in 2016 totaled US $ 7.72 billion, with about US $5.15 billion in Thai exports to India and US $ 2.57 billion in Indian exports to Thailand. In the ASEAN region, Thailand ranks as India’s 4th largest trading partner after Singapore, Indonesia and Malaysia. The growing ties between the two countries have come at a time when the AEC is expected to bring greater integration among member countries be it in the form of physical connectivity, economic links, cultural and educational ties.
4. The fast growing Indian market remains attractive for Thai investors, given the vast opportunities available in infrastructure sector, tourism and retail industries. India continues to remain an interesting market for export of goods from Thailand. Currently, Thai goods have benefited from tax reduction under ASEAN-India FTA in Goods, which came into effect from 01 January, 2010 and resulted to the flow of more goods into Indian market. An Early Harvest Scheme (EHS), covering 82 products (now 83 products) under the proposed India-Thailand FTA, in place since September 2004, has already resulted in phenomenal growth in our bilateral trade.

Bilateral Trade

5. Thailand views India as the gateway to South Asia and beyond. As a result of the reduced tariff rates and new initiatives adopted by both the countries, trade between two countries increased manifold in recent years. Bilateral Trade has multiplied eight times since 2000 to reach US$ 7.72 billion in 2016. Trade figures between the two countries are as under:
   (amount in billion USD)

6. Major imports from India are in the following sectors : Chemicals, Jewelry including silver bars and gold, Machinery and parts, Parts and accessories of vehicles, Fresh aquatic animals, chilled, frozen, processed and instant, Electrical machinery and parts, Medicinal and pharmaceutical products, Coffee, tea and spices, other metal ores, metal waste scrap, and products, Vegetables and vegetable products, Iron, steel and products, Yarn and fibers, Fabrics, Metal manufactures and Fertilizer and pesticide., etc.
7. Major exports to India are in the following sectors: Polymers of ethylene, propylene, etc. in primary forms, chemical products, Air conditioning machine and parts thereof, Precious stones and jewelry, Motor cars, parts and accessories, Parts of aircraft and accessories thereof, Iron and steel and their products, Machinery and parts thereof, Copper and articles thereof, Radio-broadcast receivers, television receiver and parts, Automatic data processing machines and parts thereof, Spark-ignition reciprocating internal combustion piston, and Rubber products etc.

Investments

8. Investment by Indian and Thai companies into each other’s’ countries has been growing in the recent times. Approved Indian investment in Thailand during the last few years is as under:

9. Investment from Thailand in India has also increased in the recent years. Thai investments are mainly in infrastructure, real estate, food processing sectors, chemicals, hotel and hospitality sector. Break-up of yearly FDI from Thailand to India in the previous years is as under:

10. Major Indian Companies in Thailand include Tata group - Tata Motors (Thailand), Tata Steel Thailand and Tata Consultancy Services, The Aditya Birla Group, Mahindra Satyam, Ranbaxy, Dabur, Lupin, NIIT, Kirloskar Brothers Ltd, Punj Lloyd Group, Polyplex (Thailand) Public Co. Ltd, Precious Shipping PCL and Usha Siam Steel Industries PCL. It is known that companies like Jindal group [steel], Ashok Leylands [automobiles], Mahindras [automobiles], Escorts, D.R. Hotels (Nellore) Pvt. Ltd. and D.R. Utthama (Thailand) Co. Ltd., are also keen to expand their operations into Thailand.
11. Leading Thai companies in the fields of Agro-processing, construction, automotive, engineering and banking have active and growing business presence in India. Major Thai companies in India are -

12. There is an active India-Thai Joint Commission (headed by respective Foreign Ministers) as also a well-established India-Thai Chamber of Commerce and an active India-Thai Business Association. A Joint Business Council has been set up since May 2013 with the involvement of the private sector to stimulate expansion of bilateral trade and investments, and facilitate business partnerships.
13. Air connectivity between India and Thailand is growing with 176 flights per week reflecting a rapidly growing traffic of tourist and businesspersons between the two countries. All major airlines of India operate between the two countries: Air India, Jet Airways, Spicejet, Thai Airways, Bangkok Airways, Air Asia and IndiGo.

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