A Framework Agreement for establishing Free Trade Area (FTA) between India-Thailand was signed by their respective Commerce Ministers on 9th October 2003. The Early Harvest Scheme (EHS) under Framework FTA, became operational from 1.9.04, with a tariff reduction of 50% on 82 items and subsequent reduction of 25% from 1.9.05. The duty on these 82 items has since been reduced to zero from 1.9.06. The items included range from fresh mangoes, grapes, apples, crab (prepared or preserved) to chromium ores and concentrates, acrylic polymers, precious stones (other than diamonds), semi-precious stones (un-worked, sawn or roughly shaped), diamond dust and powder, jewellery, alloy pig iron, helical springs of iron/steel, fans, parts of air/vacuum pumps, compressors, fans, refrigerators, certain machinery items, office machines, ball bearings, printed circuits, TV picture tubes, gear boxes wrist watches, etc.The India-Thailand FTA covering trade in goods is to be finally established by 2010. Negotiations under the framework agreement are underway for the establishment of an FTA covering trade in goods, services, investment and economic cooperation. Text of the Framework Agreement dated 9.10.03 and the subsequent Protocol to amend this Framework dated 30.8.04 can be accessed at

http://commerce.nic.in/thailand.htm
and
http://commerce.nic.in/thailand_protocol.htm#protocol
 

Total FDI approvals (net of ADRs/GDRs*) during 1991-2007 (upto March) are over US$ 75.63 billion. Thailand ranks 19th & accounts for 0.93% (net of ADRs/GDRs) with FDI approvals of US $ 831.2 million of the total investment approvals.

Cumulative FDI inflow (net of ADRs/GDRs) during 1991-2007 (upto March) was US$ 54.63 billion, including amount on account of acquisition of existing shares (up to 1999), RBI's NRI Schemes, stock swapped and advance pending for issue of shares. Thailand ranks 28th and Cumulative FDI inflow (net of ADRs/GDRs) from Thailand is US $ 78.8 million (0.16%) excluding FDI inflows received acquisition of existing shares (up to 1999), RBI's-NRI Schemes, stock swapped & advance pending for issue of shares

Top sectors attracting FDI approvals from Thailand (from August 1991 to March 2007) are Telecommunications (49.53%), Hotel & Tourism (22.91%), Food Processing Industries (14.69%), Trading (6.14%) and Chemicals (other than fertilizers) (3.44%).

Top sectors attracting FDI inflows from Thailand (from August 1991 to March 2007) are Telecommunications (56.19%), Transportation Industry (15.32%), Hotel & Tourism (13.41%), Trading (2.97%), and Textiles, including Dyed, Printed (1.91%)

Since the announcement of new industrial policy in August 1991, foreign collaboration approvals and investment from Thailand has risen substantially.

From August 1991 to March 2007, the government (including RBI's automatic route) has approved 27,426 foreign collaboration (technical & financial) proposals with a corresponding foreign direct investment of Rs.2,876.32/US$ 75.73 billion. Out of this, the total number of approvals with Thailand have been of the order of 144 (0.53% of the total approvals) with an equity participation of Rs. 26.82 (US$ 0.83) billion (0.93% of the total approvals). Thai companies rank 19th in the list of countries in terms of cumulative FDI approved from August 1991 to March 2007.

Total (overall) number of technical collaborations during the last fifteen years is 7,846 out of which 41 (0.52%) are with Thailand since 1991.

Top five sectors attracting technology transfer from Thailand are - Food Processing Industries (8 collaborations),Industrial Machinery (4 collaborations), Hotel & Tourism Industry (3 collaborations), Transportation Industry (2 nos.) and Rubber Goods (2 nos.).

Top FDI inflows received (from January 2000 to March 2007) from Thailand through Indian companies are M/s Fascel Ltd., Interglobe Hotel P. Ltd., Ajinomoto India (P) Ltd., Royal Embroideries (P) Ltd., Enland International Pvt. Ltd., Charoen Pokphand Seeds (India) Pvt. Ltd, Thai Summit Neel Auto Pvt. Ltd.,Tigar jewellery India Pvt. Ltd., Grobest Fees Corporation India Ltd., Holley Meters (India) Pvt. Ltd., etc.

Indian Investments in Thailand

The major Indian groups that have invested in Thailand are the Aditya Birla Group, Indorama Group, Tata Steel, Tata Motors, Baroda Industries, Dabur Pharma, Usha Martin Industries, etc. According to the India-Thai Chamber of Commerce, the potential areas for Indian investment in Thailand include information technology, pharmaceuticals, herbal-based medicines and cosmetics, dairy development and products, space technology, biotechnology and biomass projects, manufacturing of machine tools, medical supplies and instruments, transport and equipment.
 

Indo-Thai Interactions in Financial Sector

One Indian bank namely Bharat Overseas Bank (now Indian Overseas Bank) has been functioning in Thailand since 1973. On the reverse side, the Krung Thai Bank opened its branch in Mumbai in January 1997. The Siam Commercial Bank closed its branch, which had been functioning in Mumbai since 1995, in November 2002 due to financial problems back home. As part of its global expansion plans, a representative office has been opened in Thailand by the Bank of Baroda in August 2005 and the ICICI Bank in September 2006.

(Amount in million)

(Amount in million)

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