Thailand and India's closer ties

Trade and transportation logistics are key to the deepening relationship
Published : 04 October 2017

By: Tridivesh Singh Maini and Sandeep Sachdeva

Over the past two decades, India has strengthened its outreach toward Southeast Asia, in both the economic and strategic spheres. The Association of Southeast Asian Nations (Asean) has become India’s fourth largest trading partner - trade between India and Asean is estimated at US$70 billion in 2016-17.

Recently an invitation was extended to the leaders of the 10 Asean member states to visit India, for the Republic Day celebration on January 26, 2018. This year also marks the 25th anniversary of Asean-India relations. 

In the current context, Thailand’s significance has increased all the more. Not only is it a neighbor of Myanmar, and not only is there a growing discomfort with China, but both countries share historic links, and there are several things which bind both countries: Buddhism, Ramayana, age-old connections between the Ahoms of Assam, and, not to forget, the prosperous Indian diaspora of over 250,000 people. 

There are also renewed efforts to increase land connectivity with Southeast Asia through Myanmar. In this context Thailand (with which India is celebrating 70 years of economic relations) is extremely important, as the India-Myanmar-Thailand trilateral highway will help in connecting South Asia with Southeast Asia. Such a highway, which has been spoken of for some time, is becoming increasingly imperative, not just in the context of the highway alone, but also for the Dawei deep-sea port and special economic zone project in Myanmar.

The Dawei project has acquired equal importance in the context of trade and connectivity. Dawei is a port city in the south east of Myanmar. Myanmar and Thailand are jointly developing it as a deep-sea port and special economic zone with investment of US$8 billion. India is also planning to connect it with Chennai. It will not only provide India an alternative sea route to Southeast Asia, but will also reduce dependency on the congested Strait of Malacca and cut transport time.

People to people contact is also reasonable, with over a million Indians visiting Thailand every year. During Prime Minister General Prayut Chan-o-cha’s visit in June 2016, the joint statement stated:

“The ties between the two countries are intertwined and deep rooted in history, with interactions in multidimensional fronts, and extensive people-to-people contacts. In addition to the wide range of cooperation, Thailand and India have compatible strategies of Look West and Act East respectively, now evolved into a comprehensive partnership.”

If one were to look at the economic sphere, Trade between the two countries was estimated at over US$7 billion in 2016. Both sides agreed to establish a free trade agreement (FTA) in 2010, but it hit significant roadblocks. In 2006, both sides agreed to remove tariffs on over 80 items (including food products, auto products, electronic goods and jewelry) under the Early Harvest Scheme. Talks on the FTA are still ongoing.

Thai Investment in India is currently estimated at US$164 million One of the major projects which Thailand has undertaken is the Kolkata airport. According to the Thai embassy in India, “Major Thai companies active in India include Charoen Pokphand (CP) Group, Italian-Thai Development (ITD), Delta Electronics, Rockworth Office Furniture, Krung Thai Bank, Thai Summit Auto, Pruksa Real Estate, Thai Airways International, and SCG Trading.”

The Thai Prime Minister during his 2016 visit also offered to facilitate Indian investment into Asean, remarking: “There are many opportunities for Indian business in the wider Asean region. Thailand can be like a forward base for Indian investors to Asean.”

Political leadership 

Former India Prime Minister Dr Manmohan Singh, whose contributions toward strengthening ties with Southeast Asia are significant, invited then Thai Prime Minister Yingluck Shinawatra to the Republic Day Parade in 2012. In May 2013, Singh visited Thailand and a number of issues were discussed, including the participation of Thailand in India’s infrastructure development. The joint statement said:

“India invited participation of the Thai private sector in India’s plans to modernize and upgrade manufacturing and infrastructure sectors, especially in the Delhi-Mumbai and Chennai-Bangalore Industrial Corridors, the Buddhist circuit and the North-East States of India. India also welcomed Thai investment, particularly in sectors such as ports and highways, electronics, automobile components, food processing and power generation, as well as tourism and hospitality facilities.”

Current India Prime Minister Narendra Modi also recognizes the strategic importance of Thailand. During the Thai PM’s visit in June 2016, Modi spoke about the relevance of deeper defense and maritime cooperation between the two countries. En route to Japan, Modi also made a stopover in Thailand in November 2016, to pay homage to King Bhumibol Adulyadej, who died in October 2016, after a protracted illness. The king was not only adored by his subjects, but also seen as an anchor of stability in a kingdom rocked by turbulent politics.

While there is significant progress in bilateral ties a number of steps need to be taken:

First, both countries, given the changing geopolitical dynamics in the region, need to seriously address issues obstructing the FTA. These issues need deft political handling. During the Thai PM’s visit in June 2016, Modi made it unequivocally clear that his government will seek to give a push to the FTA. This will help not only in improving bilateral ties, but also in creating greater opportunities for India in the Asean region as a whole, as Thailand can be a good gateway for India to Southeast Asia.

Second, it is important to effectively promote soft power. While there has been an increasing emphasis on promoting India studies in Thai Universities, with centers for India studies increasing, it is important to ensure that they are effective and there is interest in the subjects being taught, and they have resulted in creating an interest in India. But it is important for a periodic appraisal.

Fourth, a greater role needs to be given to state governments who have historical connections with, as well as economic interests in, Thailand. Tamil Nadu, for instance, is important because of efforts to connect the Dawei port with Chennai. States like West Bengal have both historic and economic connections with Thailand, while Bihar and Thailand can build close links through Buddhism.

Given Thailand’s geo-strategic location, economic interests and apprehensions about China, it is time for New Delhi to cash in on the goodwill it has. India should also work at strengthening India-Thailand-Myanmar trilateral relations.

Tridivesh Singh Maini is a New Delhi based policy analyst associated with The Jindal School of International Affairs, OP Jindal Global University – Sonipat. Sandeep Sachdeva is an independent policy analyst.

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