Thailand is making significant strides toward enhancing its economic outlook through potential trade agreements with India, particularly focusing on the elevation of the existing Free Trade Agreement (FTA) negotiations and boosting bilateral trade relations. This development emerges following discussions on February 26, 2025, between Phichai Naripthaphan, Thailand’s Minister of Commerce, and Suman Berry, Vice-Chairman of the National Institution for Transforming India (NITI Aayog).
During their meeting, both parties acknowledged the underwhelming trade figures between the two countries, which they deemed did not reflect the true potential of both economies. India, with its population of approximately 1.4 billion and significant economic size, offers tremendous opportunities for Thai exports and investments. "The current trade levels are only the tip of the iceberg," said Minister Phichai. He posited the notion of transforming the Early Harvest Scheme, which allows for some tariff liberalization, toward a Comprehensive FTA. This comprehensive agreement would extend beyond goods trades to include services, investments, and broader economic cooperation.
Both nations are eyeing to solidify their relationship and establish strategic partnerships, with Thailand prepared to support India’s goals of revisiting the ASEAN-India Trade Agreement to reach substantial conclusions by the end of 2025. Minister Phichai underlined the importance of eleviating their Joint Trade Committee discussions to ministerial-level gatherings to accelerate economic collaboration and policy alignment.
The interest from India was reciprocated as officials expressed appreciation for Thailand’s OTOP (One Tambon One Product) initiative, aimed at eleviating local product values and supporting community income. India's implementation of the One District One Product policy shows its commitment to community-level economic enhancement. Officials discussed synergies between Thailand’s and India’s tourism sectors, especially concerning Buddhist tourism, pointing out the prospects for developing joint tourism routes aimed at maximizing their offerings to religious travelers.
Statistics reinforce the necessity of strengthening ties between Thailand and India. For the fiscal year 2024, trade between the two nations reached approximately $17.45 billion, reflecting an 8.80% increase from 2023. Major exports from Thailand included chemicals, jewelry, plastics, and machinery, amounting to around $11.76 billion, with key imports from India including precious stones, machinery, metals, and agricultural products totaling around $5.70 billion. Thailand currently holds a trade surplus of approximately $6.06 billion with India, highlighting its favorable export capacities.
The governmental efforts to strengthen trade relations come at a time when external agricultural pressures influence local markets. Minister Phichai noted the pressures on Thailand's rice-producing farmers resulting from India’s reintegration as a major exporter after pausing its rice exports for two years. Amidst fluctuated prices, the National Rice Policy Committee has approved measures to support farmers, including direct financial aid of 1,000 Baht per rai, with households capped at 10 rai.
Phichai emphasized, "The pain of the farmer is the pain of the land," indicating the urgency for systematic solutions to stabilize agricultural income. Acknowledging the competitive edge of neighboring nations, like Vietnam, and their higher output per rai, Thailand aims to invest long-term strategies for enhancing crop yields and developing superior rice strains. Moving forward, sustainability and diverse agricultural development will be fundamental, allowing farmers to explore other economic crops to mitigate risks.
Looking toward the future, Indian officials noted potential collaborations not just within agricultural practices but also by learning from Thailand's established methods, especially concerning high-demand crops like durian. This unique fruit has become increasingly valuable, with estimations of generating export earnings around $6 billion annually.
With proactive measures and strategic dialogues underway, Thailand's government remains focused on reshaping its trade landscapes to create mutual opportunities with India. By leveraging existing economic structures and strengthening relationships, Thailand can pave the way for inclusive growth and sustainable economic development.
The embrace of these initiatives indicates Thailand's commitment to fostering dynamic economic ties and adapting to challenges. The collaboration with India serves as a blueprint for enhancing trade policies within the region and beyond.