Envoy, trade rep try to ease Thai fears
Anil Wadha, India's ambassador to Thailand, is bullish that the two countries will conclude their comprehensive bilateral free-trade agreement (FTA) in the next few months after some delays in 2012.Meanwhile, Satish Sehgal, president of the Thai-India Business Association, said the value of bilateral trade would likely jump from the current US$9 billion (Bt268 billion) per year to $15 billion once the expanded FTA is in place.
Wadha said: "Both countries want to conclude the free trade agreement as soon as possible. When Prime Minister Yingluck Shinawatra was in India in January 2012 as the chief guest for our Republic Day, there was a consensus that we would work towards the conclusion of the FTA by the end of 2012.
"However, some more time is required. When we are going to have a comprehensive economic cooperation agreement, it's not just about goods, but also investment and services as well as technical barriers of trade and sanitary and related measures.
"As far as goods and services are concerned, there are not many big issues pending, but we need to concentrate on technical barriers, including sanitary and related measures, which are well known internationally but it requires some time to resolve.
"This can't be done overnight. As we speak, both sides continue to exchange e-mails to clarify these problems, which may need a separate chapter.
"The next round of talks will be in Bangkok next month, after which we will assess how much time is needed to conclude the talks. It could be a few months, but it's definitely going to be within this year," the ambassador said.
Noting that some Thai negotiators are worried about an influx of Indian doctors and other professionals into Thailand, he played down this concern.
"I think there has been a big economic boom in India along with an increase of foreign direct investment, so the demand for doctors and other professionals has been phenomenal. In fact, there is already a shortage of nurses in some parts of India. There is also the linguistic issue if these people come to work in Thailand.
"On the other hand, Thailand should gain more from the service sector in India under the proposed FTA, as Thai spas, hotels and other services are quite popular in India. Thai workers in these sectors can start working in India.
"Regarding the Asean-India FTA and Thai-India FTA, there are differences, as you get the lowest common denominator in the multilateral FTA involving 10 Asean countries because everyone has their [individual] concern. However, a bilateral FTA between two countries like Thailand and India is much more beneficial, as two countries can give and take more than collectively with many other countries. This will lead to more trade and investment between the two countries.
"Regarding the Asean-India FTA and Asean-China FTA, I think the Chinese case is probably more about manufactured goods, but in our case is more about raw materials and other issues.
"Both China and India are large markets with big middle-class populations, but I think Indians are probably more consumeristic, and we are far less dependent on exports, which comprise a very small percentage of our GDP, so we have a big domestic consumption component.
"In the context of a Thai-India FTA, Thailand will likely gain more because of this market access."
Sehgal said: "I think both countries have to take one step back so that the FTA talks can be concluded. On the Thai concern that Indian doctors or engineers or architects will come to work in Thailand in large numbers, I think the concern is not well justified.
"Most Indian doctors who want to work overseas have left for the US or Europe, especially the UK or Commonwealth countries, largely due to high salaries and English proficiency. So it is unlikely that they will choose to work in Thailand.
"I think the construction sector is another area that Thailand's contractors may benefit, as India is investing a large budget in building roads and highways in north-south and east-west corridors.
"At present, 80 per cent of Thai products exported to India are manufactured goods such as electronics, machinery and chemicals. We should diversify to export more food and agricultural products such as fruit and vegetables to serve the huge India market of over 1.2 billion population.
"Of this number, 300 million are in the middle class with annual income of over Bt600,000 per annum. Thai food and Thai restaurants have gained popularity, with the number of restaurants topping 180. The demand for hotel services is also very strong. Thailand has a competitive advantage in the service sector.
"An earlier study shows that Thailand will gain over 100 per cent in terms of exports to India, while India will get about 40 per cent under the proposed FTA once it is enforced.
"Now we have 82 items under the Early Harvest Programme of the FTA, and the bilateral trade is in favour of Thailand, with the value totalling $9 billion last year. If the FTA is concluded, the value of bilateral trade is expected to rise sharply to around $15 billion."