As tensions rise between India and Pakistan, the economic impact on Thai exports remains a focal point for local officials. Ms. Sunanta Kangwanakul, Director-General of the Department of International Trade Promotion (DITP) under the Ministry of Commerce, addressed the ongoing conflict, stating that despite the situation being the most intense in years, it is currently localized in the northern regions of India near the Himalayas. She expressed cautious optimism, noting that the conflict is not expected to escalate into other states.
"Although the clashes are severe, we believe they won't spread beyond the northern area of India, which is crucial for maintaining trade routes," Ms. Sunanta said. Reports from the Thai Trade Promotion Office in New Delhi and Dhaka indicate that while air transport routes may be affected, the overall impact on trade with India and Pakistan remains limited for now. However, she warned that adjustments in flight paths, particularly for Thai Airways, could lead to increased fuel costs and longer delivery times.
Currently, six airports in India have been closed, but this has not significantly hindered Thai exports to India. Conversely, Pakistan's closure of Islamabad International Airport has forced Thai Airways to cancel flights to that destination, although services to Karachi continue. Ms. Sunanta emphasized that there is still no direct impact on exports from Thailand, but prolonged conflict could create opportunities for Thai exporters to fill gaps in necessary goods that would typically be imported from India.
In terms of trade statistics, Thai exports to India have shown promising growth. In March 2025, exports reached $1.08 billion, reflecting an 8.3% increase. For the first quarter of the year, total exports to India amounted to $4.95 billion, marking a remarkable 91.4% increase, which constitutes 6.1% of Thailand's total exports. Meanwhile, exports to Pakistan in March totaled $91.5 million, up 21.6%, with the first three months of the year seeing a total of $282 million, a 33.2% increase, accounting for 0.4% of total exports.
On another front, the Federation of Thai Industries (F.T.I.) has raised alarms about the rapid strengthening of the Thai baht, which is reaching levels between 32.50 and 32.70 baht per dollar. Mr. Kriangkrai Thiennukul, Chairman of the F.T.I. and the Joint Standing Committee on Commerce, Industry, and Banking (JSCCIB), expressed concerns that this could undermine the competitiveness of Thai businesses in the global market.
"The rapid appreciation of the baht poses challenges for our exporters, making it difficult to compete internationally," Mr. Kriangkrai stated during a recent meeting. He called for measures to stabilize the currency and prevent excessive fluctuations that could disrupt trade.
While a stronger baht may reduce import costs, it also presents challenges for exporters who rely on competitive pricing. Mr. Kriangkrai noted that the agricultural sector, in particular, could benefit from lower production costs due to reduced import prices for energy and raw materials.
Despite the challenges posed by the currency situation and the ongoing geopolitical tensions, there is a silver lining. The F.T.I. estimates that the Customs Department could see an increase in revenue of 1.6 trillion baht over the next five years, which could provide a boost to the Thai economy. However, the organization stresses the need for ongoing negotiations with the United States to reduce tariffs and enhance the competitiveness of Thai products in an increasingly competitive market.
"We must work collaboratively with the government to ensure that our exporters can thrive in this challenging environment," Mr. Kriangkrai added, emphasizing the importance of enhancing the capabilities of Thai entrepreneurs.
As the situation unfolds, both the DITP and F.T.I. are closely monitoring developments in India and Pakistan, along with the fluctuations of the Thai baht. They remain hopeful that proactive measures can be taken to mitigate any adverse effects on trade and to support Thai exporters in navigating these turbulent times.
In summary, while the ongoing conflict between India and Pakistan poses potential risks to trade, officials are optimistic that the impact on Thai exports will remain manageable for the time being. The strengthening baht presents its own set of challenges, but with careful management and strategic negotiations, there is hope for continued growth in Thailand's export sector.
