India and Thailand are eager for a comprehensive agreement including more of services and investments. Thai companies are eager to invest in infrastructure projects in India.

The Indian Prime Minister, Manmohan Singh will visit Thailand in late October, this year to sort out trade irritants and the Thai Prime Minister, Abhisit Vejjajiva is scheduled to visit India around early December, this year.

Addressing Indian and Thai business leaders at the India-Thailand Business Forum, organised by FICCI, Royal Thai Embassy and the Board of Investment of Thailand in Delhi on Wednesday, the visiting Thai Deputy Prime Minister, Korbsak Sabhavasu said : “The India-Thailand Free Trade Agreement Framework signed in October 2003 covers trade in goods, services, investment and cooperation between the two countries. The Early Harvest Programme started since 2006 has already reduced tariffs in 82 categories of goods such as plastic pellets, air conditioners, fans, refrigerators, radios, ball bearings and automotive components. At present both the countries are engaged in converting the FTA into a comprehensive agreement to include more services and investments. This will further boost the growth in trade and investment between India and Thailand in the future.”

Sabhavasu said that he would talk to the India government for encouraging more Thai investment in Indian infrastructure.

India-Thailand bilateral trade rose to $4,108.91 million in 2007-08. The trade balance was heavily tilted in favour of Thailand with its exports amounting to $2,301 million while India's exports to Thailand was $1,807.91 million. Major items of Indian exports were gems and jewellery, non-ferrous metals, primary and semi-finished iron and steel and oil meals. Major items of Thai exports were electronic goods, non-electrical machinery, artificial resins and plastic materials, iron and steel.

Sabhavasu informed that the ASEAN-India Free Trade Agreement signed on August 14, 2009 would create a new free trade area of 1.7 billion people covering 11 countries - India and 10 ASEAN countries with a combined GDP of $2.3 trillion. This FTA would lead to tariff reduction for more than 4,700 categories of goods in the member countries from January 1, 2010.

He said, “I also anticipate even greater flow of investments in the near future between India and Thailand. I believe that India's 'Look East Policy' and Thailand 'Look West Policy' would help in improving the economic relations between the two nations as also supplement each other in enlarging market size and business opportunities.”

The Thai Deputy Prime Minister said that with the strategic location of Thailand and its bilateral and regional FTAs, Indian enterprises could enjoy access to the Southeast Asian market, particularly the Mekong region. A growing number of Indian companies have opened branches in Thailand such as the Aditya Birla Group, Tata Steel, Dabur Pharma, Usha Martin, Ranbaxy, Lupin Laboratories, Indo-Rama Group, 3i Infotech, Infosys, Satyam Computers and NIIT. Most recently, in 2006, Tata Steel took over the Thailand-based Millennium Steel with an investment of $ 130 million.

“The Government of Thailand will give priority to mutual cooperation between India and Thailand. We are confident of the Indian skills, knowledge, resources and potential. We will ensure effective implementation of the existing agreements and policies, and seek new measures to facilitate more investments from India,” Sabhavasu said adding that he was looking to support investments from India, especially for projects that will create a knowledge-based economy and enhance economic sustainability. Thailand, he said, was ready for investments and cooperation from India to increase the prosperity and strengthen the relationship between the two nations.

The head of the India desk in the Board of Investment of Thailand, Songsak Limbanyen, pointed out that doing business with Thailand was an attractive proposition as there were no restrictions on foreign currency remittances, no export requirement, no foreign equity restrictions in the manufacturing sector and no local content requirement.

The chairman of the committee on India-Thailand/India-ASEAN FTA and BIMSTEC, Boonpong Santiwattanatam said that both countries can benefit through ASEAN-India FTA. The Thai side will benefit from colour television, aluminimum, plastic, gems and jewellery, iron and rubber while India will benefit from gems and jewellery, copper, plastic, rubber, marine products. “It is necessary to push forward the negotiations in India-Thailand FTA and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), he said.

He said Thailand has invested in India in electricity and electronics, automotive and chemical products and partly in food sector. India is interested to invest in Thailand in agriculture machinery, tractor, auto parts, textiles, medicine, food and rubber.

The chairman of India-Thailand Joint Business Council (JBC) and Managing Director, Indo Rama Synthetics (I) Ltd, OP Lohia said that while India and Thailand were connected to each other by over 200 flights per week, this connectivity needed to be improved in terms of roads and railways. “The idea of a road link between India and Thailand cannot but captivate one's imagination. For India, it would mean road connectivity with all of ASEAN, for Thailand, it would mean road connectivity with a market of more than a billion people,” he said.

He said that there were huge opportunities for both countries for two-way investments in the development of urban infrastructure, knowledge economy, chemicals and petrochemicals industry, food processing, tourism, health and wellness industry, and gems and jewellery.

The business forum was also addressed by the Ambassador of Thailand to India, Krit Kraichitti, Director, Tourism Authority of Thailand in India, Chattan Kunjara Na Ayudhya and Mr. Rajan Kohli, Advisor, FICCI.