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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$ 504.9 billion in 2018.
  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 celebrated 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 2018 totaled US $ 12.46 billion, with about US $7.60 billion in Thai exports to India and US $ 4.86 billion in Indian exports to Thailand. In the ASEAN region, Thailand ranks as India’s 5th largest trading partner after Singapore, Vietnam, 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

  1. 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$ 12.46 billion in 2018. Trade figures between the two countries for the last five years are as under:
    (amount in billion USD)

Year

Total trade

Thai Export to India

Thai Import from India

2014

8.65

5.61

3.04

2015

7.92

5.29

2.63

2016

7.72

5.15

2.57

2017

10.39

6.49

3.90

2018

12.46

7.60

4.86

 

  1. Major Thai Exports: Motor cars, parts & accessories, Automatic data processing machines and parts thereof, Precious stones and jewellery, Rubber products, Polymers of ethylene, propylene, etc in primary forms, Electronic integrated circuits, Machinery and parts thereof, Chemical products, Refine fuels, Rubber, Iron and steel and their products, Rice, Air conditioning machine and parts thereof, Spark-ignition reciprocating internal combustion piston, Plastic products, etc.

 

  1. Major Thai Imports : Crude Oil, Machinery & Parts, Electrical machinery & parts, Chemicals, Jewellery including silver bars & gold, Iron, steel and products, Parts & accessories of vehicles, Electronic integrated circuits, Other metal ores, metal waste scrap and products, Computers, parts and accessories, Electrical house-hold appliances, Vegetables and vegetable products, Aeroplanes, gliders, instruments and parts, Finished Oils, Plastic products, etc.

 

Investments

  1. Approved Indian investment in Thailand during the last few years is as under:

Year

Investment (million USD )

2014

63.45

2015

37.53

2016

32.66

2017

32.17

2018

13.34

  1. Investment from Thailand in India has 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:

Year

FDI inflow (in million USD)

2012

11.55

2013

60.89

2014

23.72

2015

24.30

2016

68.87

2017

81.76

2018 (Jan-Dec)

92.22

  1. 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.
  2. 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 -

Sl. No.

Name

Sl. No.

Name

1.

Charoen Pokphand Group

2.

Italian-Thai Development PCL

3.

Krung Thai Bank Pcl.

4.

Srithai Superware PCL

5.

Stanley Electric Engineering India Pvt. Ltd.

6.

Thai Summit Group.

7.

Thai Airways International Pcl.

8.

The Thai Union Frozen Products PCL

9.

Rockworth Public Company Limited and Precious Shipping (PSL) of Thailand

10.

Delta Electronics (Thailand) PCL

11.

Allied Metals (Thailand) Co., Ltd

12.

Pruksa Real Estate PCL (Real Estate business)

13.

Tong Garden Food Marketing (I) Pvt. Ltd

14.

Dutch Mill Thailand

15.

Bangkok Airways

16.

Thai Air Asia

17.

Vee Rubber Corporation Co.,Ltd

18.

Builder Smart Plc (BSM)

19.

Siam Cement Group (SCG)

20.

Minor International Public Co., Ltd

 

  1. 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.

 

  1. Air connectivity between India and Thailand is growing with 330 flights per week reflecting a rapidly growing traffic of tourist and businesspersons between the two countries. All major airlines of India& Thailand operate between the two countries: Air India, Jet Airways, Spicejet, Thai Airways, Thai Smile Airway, Bangkok Airways, Thai Air Asia, Go Air, Nok Scoot, Thai Lion Air, and IndiGo, .

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