Population (2019): 69.6 million
GDP (2019): US$ 543.5 billion
World Bank “Ease of Doing Business” Rank (2019): 27
Bilateral trade with India (2019-20): US$ 11.1 billion
Gateway to the Mekong Region
Thailand is the second largest economy in Southeast Asia, and it is an attractive market you should consider. With its central location in Indochina, Thailand is the ideal gateway to the growing economies of its neighbours and export trade partners in the Mekong region – Cambodia, Laos, Myanmar and Vietnam (CLMV).
In 2017, Thailand proposed a master plan to improve infrastructure development to link the region’s logistics network. By bringing your business to Thailand, your customer base can potentially become bigger than the country’s population of 69 million and extend to the 230 million in the CLMV markets.
Nationwide Digital Push
Under Thailand’s National Digital Economy Masterplan, the Thai government has made it a priority to develop digital hard infrastructure. The Masterplan lays out a 20-year strategy to capture growth opportunities in the rising digital economy. It aims to broaden the outreach of digital technology in Thailand and usher the country into the Thailand 4.0 era – a new digital economic model launched in 2016.
Under Thailand 4.0, the country has changed its investment incentive policy. It has moved from location based strategy to activity-focussed strategy. The 2019 investment data shows investment in industries like automotive, petrochemicals, electronics and the target industries constituted 38% of total application value and 42% of FDI application value in 2019.
This makes Thailand an attractive market for tech companies in sectors such as agritech, e-commerce, enterprise services, fintech, and healthtech. However, one of the key challenges for the Thai technology sector is a shortage of talent. Computer science graduates in Thailand are highly sought after by multinational corporations and other companies every year. This is an area Indian companies can make up for, by providing related solutions in areas such as database management, software engineering, and systems & networking to bridge the market gaps.
Thailand is witnessing an infrastructure boom. Transport infrastructure development, in particular, is a key priority of the Thai government, which wants to boost its regional connectivity and strengthen its position as a manufacturing hub.
As a growing country, Thailand requires investments in infrastructure development and public services. The government realises the importance of investment to raise the living standards, quality of life and support the urbanisation. At the same time, it recognises its inability to directly provide funds and hence gives importance to the PPP mechanism as a key instrument to drive the projects in Thailand.
In 2019, Thailand announced a New PPP policy (Public-Private Partnership Act BE 2562) keeping in view its need for development of infrastructure and replacing the previous PPP Strategic Plan 2017-2021. This new plan, however has not been enacted. Total estimated cost of investment for projects included in PPP Strategic Plan is about 1.4 trillion baht and number of projects currently in pipeline are 55. The new PPP Act is expected to have a rippling effects through infrastructural development as it will have a more detailed infrastructure plan.
Two-way trade in 2019-20 totalled US$ 11.1 billion, with about US$ 6.8 billion in Thai exports to India and US$ 4.3 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.
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.
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.
Machinery and mechanical appliances, pearls, vehicles other than railway or tramway and their accessories, organic chemicals, fish, iron and steel, pharmaceutical product, mineral fuels, vehicles, coffee, tea, mate & spices, are some of the major commodities that India exports to Thailand.
|Product Code||Product Label||Thailand’s imports from India in 2019 (US$ million)|
|’84||Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof||701.1|
|’71||Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad …||640.6|
|’87||Vehicles other than railway or tramway rolling stock, and parts and accessories thereof||276.7|
|’03||Fish and crustaceans, molluscs and other aquatic invertebrates||219.2|
|’72||Iron and steel||173.9|
|’85||Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television …||146.4|
|’27||Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral . . .||144.5|
|’09||Coffee, tea, maté and spices||129.7|
Source: ITC trade map
According to ITC trademap products with greatest export potential from India to Thailand are Diamonds, worked, Copper cathodes, and Insecticides, rodenticides, fungicides, herbicides & similar. Diamonds, worked shows the largest absolute difference between potential and actual exports in value terms, leaving room to realize additional exports
|Product code||Description||Export potential|
|710239||Diamonds, worked||US$ 1.1 billion|
|740311||Copper cathodes||US$ 194.6 million|
|3808||Insecticides, rodenticides, fungicides, herbicides & similar||US$ 158.6 million|
|0904XX||Pepper (Capsicum or Pimenta), dried, crushed or ground||US$ 155.7 million|
|760110||Aluminium, not alloyed, unwrought||US$ 143.5 million|
|8708XX||Parts & accessories of motor vehicles, nes||US$ 143.2 million|
|711319||Jewellery, of precious metal, nes||US$ 123.5 million|
|03XXXX||Molluscs & other aquatic invertebrates||US$ 111.8 million|
|3004Xb||Medicaments consisting of mixed or unmixed products, for retail sale||US$ 106.2 million|
|6907||Unglazed ceramic flags, paving, hearth, wall tiles, mosaic cubes & the like, nes||US$ 91.8 million|
Source: ITC trade map
India imports machinery, plastics, organic chemicals, vehicles, pearls, rubber, copper, animal oils and iron & steel are the top import commodities.
|Product Code||Product Label||India’s imports from Thailand in 2019 ( in US$ million)|
|’84||Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof||1,318.7|
|’85||Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television …||906.7|
|’39||Plastics and articles thereof||847|
|’71||Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad …||561.7|
|’87||Vehicles other than railway or tramway rolling stock, and parts and accessories thereof||444.5|
|’40||Rubber and articles thereof||286.1|
|’74||Copper and articles thereof||286.1|
|‘38||Miscellaneous chemical products||159.6|
|’72||Iron and steel||195.24|
Embassy of India
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