Thailand, india eye untapped potential

So says Harsh Pati Singhania, senior vice president of the Federation of Indian Chambers of Commerce and Industry.

"Economic relations between the two countries have grown in recent years, as reflected in the 2006-07 bilateral trade, which amounted to $3.18 billion," Singhania said last week at the Global Business Forum 2008, whose theme was "India-Thailand Business Summit: The Way Forward".

"Indian exports to Thailand registered growth of almost 34 per cent over the previous year, while imports from Thailand increased by 43 per cent. From April to June this year, total trade reached $850 million."

Thailand's Board of Investment said the Bt7.4 billion invested in Thailand by Indian companies last year had already been exceeded in this year's first quarter. The investments were mainly in agriculture, minerals, ceramics, automobiles, metal processing, petrochemicals and electrical concerns. Thailand is the third-largest Asean investor in India, mainly in telecommunications, construction, hotels and tourism, railway components and land transport.

The two countries adopted a partial free-trade agreement (FTA) called the Early Harvest Scheme in 2003, under which tariffs on 82 items were eliminated last September. A full FTA will be ratified this year.

Singhania said there were business opportunities to be explored, because India required investment of more than $500 billion in urban infrastructure, while Thailand had acclaimed competence in that sector.

He said Thailand could take advantage of India's skills in biotechnology and invest in food-processing plants, because India was the world's second-largest fruit and vegetable producer. Indians' rising disposable income has also led to a boom in the fitness industry. Other areas of increased business opportunities include India's rapidly growing chemical and petrochemical industry, gems and jewellery, tourism and automobiles, he said.

A PricewaterhouseCoopers Knowledge Report released during the forum highlighted huge untapped trade potential, particularly in the healthcare and wellness sector in India. There is a demand for at least 250,000 hotel rooms in India, but only 100,000 rooms are available now. Each new hotel is introducing spas, and hospitals are also diversifying.

Indian Ambassador Latha Reddy said with bilateral trade growing steadily at 20-40 per cent annually, this year's target should be $6.5 billion.

While the Aditya Birla Group, the Indorama Group, Saraff Energies and Alva Aluminium are already among Indian investors in Thailand, the recent entry of the Tata Group in steel and software and of other Indian companies involved in pharmaceuticals and information and communications technology have had a catalytic effect on other companies exploring business opportunities here. Meanwhile, Thai businesses like the Charoen Pokphand Group, Italian-Thai Development, Thai Summit and Delta now have growing presence in India in the fields of agriculture, construction, automobiles and electronics, engineering and banking.