“The latest trade data released by the Indian Embassy in Bangkok, Thailand shows that trade between the two nations has grown at least 60 per cent since 2016.”
Trade relations between India and Thailand, the second-largest economy in the Southeast Asian economic group, ASEAN, has grown by leaps and bounds in the last two years. Latest statistics published by the Indian Embassy in Bangkok, Thailand, shows that trade has been grown some 60 % since 2016. However, if the timeline is drawn back to 2014, the total growth is down to 44 % in 5 years or a less impressive CARG of 7.6 %. This can be attributed to trade decline in 2014 and 2015 due to the uncertainty following the 2014 imposition of martial law in Thailand and which just ended this year.
According to the World Bank, Thailand had a nominal GDP of US$ 505 billion in 2018 of which two-thirds are dependent on exports.Thailand owes its close trade and diplomatic ties with India to historic, cultural and social reasons.The main religion in Thailand, Buddhism as well as the script used for its language, has Indian roots.
Fourth-place Malaysia’s bilateral trade with India stands at US$ 15 billion in 2018 and is expected to be a touch lower in 2019. India’s trade with Thailand is expected to overtake Malaysia in the next 2 to 3years if it continues at the current growth trajectory.Two-way trade in 2018 totalled US$ 12.46 billion with US$ 7.60 billion in Thailand exports to India and US$ 4.86 billion in Indian exports to Thailand. In ASEAN, Thailand ranks as India’s fifth-largest trading partner after Singapore, Vietnam, Indonesia and Malaysia.
Foreign direct investments (FDI) from Thailand into India has also grown significantly from just US$ 11.55 million in 2012 to US$ 92.22 million in 2018 (CAGR 34.6 per cent), and with about US$ 90 million already committed in the first six months of this year, this is expected to continue to grow strongly. These investments have been mostly in infrastructure, real estate, food processing, chemicals and hospitality.
However, FDI from Thailand to India has been on a steady decline over the years. It was US$ 63.45 million in 2014 and US$ 13.34 million in 2018.What is going to boost investment and business opportunities in the coming years is the ASEAN Economic Community (AEC) blueprint 2025. The ultimate aim of the AEC blueprint is to achieve the ASEAN common market with intermediate steps taken to gradually bring greater integration among member countries.
Both Thailand and India have been touted as beneficiaries of the protracted trade war between the US and China. With no sign of this abating any time soon, many businesses are planning to or are already in the process of re-siting their manufacturing facilities to other locations including India, Thailand and Vietnam (which is an ASEAN country).