A PROJECT REPORT ON

TRADE RELATIONS BETWEEN INDIA AND THAILAND

SUBMITTED BY
TEHSEEN HANIF ANSARI
ROLL NO-1515504
M.COM- SEM-III
(BUSINESS MANAGEMENT)
ACADEMIC YEAR: 2015-16

PROJECT GUIDE
MR.N.K.S VARAHAN

SUBMITTED TO
UNIVERSITY OF MUMBAI
MULUND COLLEGE OF COMMERCE
S.N ROAD, MULUND (WEST)
MUMBAI 400080.

DECLARATION
I, TEHSEEN HANIF ANSARI, ROLL NO 1515504, STUDENT OF MULUND COLLEGE
OF COMMERCE, S.N ROAD, MULUND (WEST), MUMBAI 400080 STUDYING IN
M.COM PART-II HEREBY DECLARE THAT I HAVE COMPLETED THE PROJECT ON
TRADE RELATIONS BETWEEN INDIA AND THAILAND UNDER THE GUIDANCE
OF PROJECT GUIDE PROF.MR.N.K.S VARAHAN DURING THE ACADEMIC YEAR
2015-2016.THE INFORMATION SUBMITTED IS TRUE AND ORIGINAL TO THE BEST OF
MY KNOWLEDGE.

DATE:
PLACE:
SIGNATURE:

CERTIFICATE
I, PROF.MR. N.K.S VARAHAN hereby certify that MISS TEHSEEN HANIF ANSARI, ROLL
NO.1515504 of Mulund College Of Commerce, S.N Road, Mulund (West),Mumbai-400080 of
M.Com Part-II (Business Management) has completed her project on TRADE RELATIONS
BETWEEN INDIA AND THAILAND during the academic year 2015-2016.The information
submitted is true and original to the best of my knowledge.

PROJECT GUIDE

COURSE CO-ORDINATOR
DATE:

PRINCIPAL

EXTERNAL GUIDE

ACKNOWLEDGEMENT

I, Tehseen Hanif Ansari would like to express my sincere gratitude to the principal of Mulund
College of Commerce Dr Mrs. Parvathi Venkatesh, Course Co-ordinator and our project guide
MR. N.K.S VARAHAN for providing me an opportunity to do my project work on TRADE
RELATIONS BETWEEN INDIA AND THAILAND Special thanks to library in charge,
which provided the necessary books and other data which acted as stepping stone in my project
and also those who have directly or indirectly helped me in project for their encouragement and
timely help.
Last but not the least, I wish to avail myself of this opportunity, to express a sense of gratitude
and love to my friends and my beloved parents for their help and support.

SIGNATURE:
DATE:

PREFACE
OBJECTIVES.

To examine the trade relations between India and Thailand.

To know the demographics of Thailand.
To examine how much trade is increasing after FTA between India and Thailand.
To identify the effects on Indias other trading partners outside the FTA.

INDEX

SR.NO
CHAP 1
CHAP 2
CHAP 3
CHAP4

TOPIC
INTRODUCTION
INTERNATIONAL MARKETING
DEMOGRAPHICS OF THAILAND
THAILAND-INDIA ECONOMIC

PG.NO
1
2-3
4-9
10-13

4.1
4.2

OVERVIEW
EXPORT-IMPORT ANALYSIS
RECENT DEVELOPMENTS AND SOME

14-16
17-18

IMPORTANT ISSUES IN REFERENCE TO

CHAP 5

THAILAND
CONCLUSION
WEBLIOGRAPHY

19
20

CHAP 1-INTRODUCTION
Indias economic relations with Thailand are set to undergo major changes as the Indo Thai FTA
has come into force since 9 October 2003.As such this paper aims to describe the trade relation
between India and Thailand and to study the changes outcome after the signing of FTA. Thailand
is a major developing exporting country from Asia .on the other hand, India is consolidating its
position with strong domestic and external demand The developing countries studied are making
efforts to develop their exports through different paths with direct and indirect influence of
government through innovative policies and trade liberalization programme. Thailand has aimed
to plug the gaps in the exports through a focused investment promotion scheme. India is also
making an effort to develop indigenous strategy through giving focus in R&D and tightening the
IPR regime. The study India Thailand trade assessment related to export import scenario with
respect to Free Trade Agreement focusing on overall trade performance of these two countries
.Also very less past research has tried to bring out these dimensions insights into FTAs effect on
overall trade volume performance. The paper is based on the review of the existing literature on
India Thailand Free trade agreement focusing on Indian Thailand overall trade volume.FTA
between Thailand and India has resulted in lowering of tariff of the specific components
mentioned in Early Harvest Scheme but whether it has really promoted overall trade between the
two countries remains a cause of concern. Which country has better trade effects? The study is
based on the secondary data and hence may not cover the latest trend of the industry.

CHAP 2-INTERNATIONAL MARKETING

As technology creates leaps in communication, transportation, and financial flows, the world
continues to feel smaller and smaller. It is possible for companies and consumers to conduct
business in almost any country around the world thanks to advances in international trade.
According to the World Trade Organization, the volume of international merchandise trade
increased 33 times between 1951 and 2010.
Brands and products that originate in one country are enthusiastically accepted in others. For
example, Louis Vuitton handbags, BMWs, and Columbian coffee, all foreign products, are
symbols of status and quality in the United States and many American brands, like Warner
Brothers motion pictures, have similar footholds overseas.
International marketing is the application of marketing principles in more than one country, by
companies overseas or across national borders. International marketing is based on an extension
of a companys local marketing strategy, with special attention paid to marketing identification,
targeting, and decisions internationally
According to the American Marketing Association (AMA) "international marketing is the
multinational process of planning and executing the conception, pricing, promotion and
distribution of ideas, goods, and services to create exchanges that satisfy individual and
organizational objectives."

International marketing is the export, franchising, joint venture or full direct entry of a marketing
organization into another country. This can be achieved by exporting a company's product into
another location, entry through a joint venture with another firm in the target country, or foreign
direct investment into the target country. The development of the marketing mix for that country
is then required - international marketing. It can be as straightforward as using existing
marketing strategies, mix and tools for export on the one side, to a highly complex relationship
strategy including localization, local product offerings, pricing, production and distribution with
customized promotions, offers, website, social media and leadership. Internationalization and
international marketing meets the needs of selected foreign countries where a company's value
can be exported and there is inter-firm and firm learning, optimization and efficiency in
economies of scale and scope. The firm does not need to export or enter all world markets to be
considered an international marketer.

CHAP 3-DEMOGRAPHICS OF THAILAND

Thailand, officially the Kingdom of Thailand formerly known as Siam , is a country at the centre
of the Indochinese peninsula in Mainland. It is bordered to the north by Myanmar and Laos, to the
east by Laos and Cambodia, to the south by the Gulf of Thailand and Malaysia, and to the west
by the Andaman Sea and the southern extremity of Myanmar. Its maritime boundaries
include Vietnam in the Gulf of Thailand to the southeast, and Indonesia and India on the
Andaman Sea to the southwest.
Thailand is the country in Southeast Asia most visited by tourists, and for good reason. You can
find almost anything here: thick jungle as green as can be, crystal blue waters that feel more like
a warm bath than a swim in the ocean, and food that can curl your nose hairs while dancing
across your taste buds. Exotic, yet safe; cheap, yet equipped with every modern amenity you
need, there is something for every interest and every price bracket, from beach front backpacker
bungalows to some of the best luxury hotels in the world. And despite the heavy flow of tourism,
Thailand retains its quintessential Thai-ness, with a culture and history all its own and a carefree
10

people famed for their smiles and their fun-seeking sanuk lifestyle. Many travellers come to
Thailand and extend their stay well beyond their original plans and others never find a reason to
leave. Whatever your cup of tea, they know how to make it in Thailand.

POPULATION

Thailand's population (1950-2015).

The 2014 population of Thailand is estimated to be 67,200,000.
Thailand's population is mostly rural. It is concentrated in the rice-growing areas of the central,
northeastern, and northern regions. As Thailand continues to industrialize, its urban population
45.7% (in 2010, according to NESDB) of the total population, principally in theBangkok area
is growing. Accurate statistics are difficult to arrive at, as millions of Thai migrate from rural

11

areas to Bangkok, then return to their place of origin to help with seasonal field work. Officially
they have rural residency, but spend most of the year in urban areas.
Thailand's highly successful government-sponsored family planning program has resulted in a
dramatic decline in population growth from 3.1% in 1960 to around 0.4% today.The World
Bank forecasts a contraction of the population in ten years time. In 1970, an average of 5.7
people lived in a Thai household. At the time of the 2010 census, the figure was down to 3.2.
Even though Thailand has one of the best social security systems in Asia, the increasing
population of elderly people is a challenge for the country.
Life expectancy has risen, a positive reflection of Thailand's efforts in executing effective public
health policies. The Thai AIDS epidemic had a major impact on the Thai population. Today, over
700,000 Thai are HIV or AIDS positive, approximately 2% of adult men and 1.5% of adult
women. Every year, 30,00050,000 Thai die from HIV or AIDS-related causes. Ninety percent
of them are ages 2024, the youngest range of the workforce. The situation could have been
worse; an aggressive public education campaign in the early 1990s reduced the number of new
HIV infections from 150,000 to 25,000 annually.
Entirely preventable is the leading cause of death among the age cohort under 15 years of age:
drowning. A study by the Child Safety Promotion and Injury Prevention Centre of Ramathibodi
Hospital revealed that more than 1,400 youths under 15 years old died from drowning each year,
or an average four deaths a day, becoming the top cause of deaths of children, even exceeding
that of motorbike deaths. Thailand'd Disease Control Department estimates that only 23% of
Thai children under 15 can swim.

12

LANGUAGES.
Thailand is

dominated

by

languages

of

the Southwestern

Tai family. Karen

languages are spoken along the border with Burma, Khmer is spoken near
Cambodia (and previously throughout central Thailand), andMalay in the south near
Malaysia.

The Thai hill tribes speak numerous small languages, many Chinese retain varieties of Chinese,
and there are half a dozen sign languages. The Ethnologue reports 73 living languages are used
in Thailand.
RELIGION
Theravada Buddhism is the official religion of Thailand. 93.6% are estimated to be Buddhist,
4.9% Muslim, 1.2% Christian, 0.2% other and 0.1% have no religion.
In addition to Malay and Yawi speaking Thai and other southerners who are Muslim, the
Muslim Cham of Cambodia in recent years began a large scale influx into Thailand. The
government permits religious diversity, and other major religions are represented, though there is
much social tension, especially in the Muslim South. Spirit worship and animism are widely
practiced.
AGE STRUCTURE
0-14 years: 17.6% (male 6,117,993/female 5,827,981)
15-24 years: 15% (male 5,194,332/female 4,999,669)
25-54 years: 46.9% (male 15,685,882/female 16,097,245)

13

55-64 years: 10.9% (male 3,468,620/female 3,893,925)

65 years and over: 9.5% (male 2,830,418/female 3,625,336) (2014 est.)
DEPENDENCY RATIOS
Total dependency ratio: 38.6 %
Youth dependency ratio: 24.7 %
Elderly dependency ratio: 13.9 %
Potential support ratio: 7.2 (2014 est.)
POPULATION GROWTH RATE
0.35% (2014 est.)
BIRTH RATE

11.26 births/1,000 population (2014 est.)

DEATH RATE

7.72 deaths/1,000 population (2014 est.)

NET MIGRATION RATE

0 migrant(s)/1,000 population (2014 est.)

URBANIZATION
Urban population: 34.1% of total population (2011)
Rate of urbanization: 1.6% annual rate of change (2010-15 est.)
MAJOR CITIES -POPULATION
BANGKOK (capital) 8.426 million; Samut Prakan 1.212 million (2011)

14

SEX RATIO
At birth: 1.05 male(s)/female
0-14 years: 1.05 male(s)/female
15-24 years: 1.04 male(s)/female
25-54 years: 0.97 male(s)/female
55-64 years: 0.97 male(s)/female
65 years and over: 0.82 male(s)/female
Total population: 0.98 male(s)/female (2014 est.)
INFANT MORTALITY RATE
Total: 9.86 deaths/1,000 live births
Male: 10.82 deaths/1,000 live births
Female: 8.85 deaths/1,000 live births (2014 est.)
LIFE EXPECTANCY AT BIRTH
Total population: 74.18 years
Male: 71 years
Female: 77.54 years (2014 est.)
NATIONALITY
Thai (singular and plural)
15

LITERACY
Definition: age 15 and over can read and write
Total population: 92.6%
Male: 94.9%
Female: 90.5% (2002 est.)

CHAP 4-THAI INDIA ECONOMIC OVERVIEW

India is considered as a Thailands prominent partner in South Asia in many aspects. Since both
countries have established diplomatic relations for over 65 years, the relationship grew from
strength to strength especially in terms of bilateral trade which continuously increased.
Bilateral trade of Thai-India has grown significantly and has multiplied six times since 2000 to
reach 8.67 billion USD in 2012 and expected that it will continue to grow as our free trade
agreements which provide us lower tariffs and trade barriers. While the Trade figure in 2012
includes Thai exports worth 5.47 (5.7% growth) billion USD and Thai imports worth 3.19 (5.9%
growth) billion USD. During the visiting of Thai Prime Minister to India in January 2013, the
target of 13.2 billion USD bilateral trade among both countries in 2014 was set in Delhi.
Major items of Thai exports to India (Million US$)

Product

2011

2012

2012 (Jan.Mar.)

2013
Mar.)

Jewellery including silver bars and

gold

655.1

476.8

155.4

Iron, steel and products

66.8

156.9

Vegetables and vegetable products

246.5

Machinery and parts

Chemicals

%Growt
h

%Proportio
n

207.8

33.72%

19.81%

28.1

175.7

525.27%

16.75%

405.7

114.8

168.1

46.43%

16.03%

280

397.2

82.5

86.3

4.61%

8.23%

312.5

289.7

66.4

69

3.92%

6.58%

16

(Jan.-

Parts and accessories of vehicles

136.5

223

45.4

61.1

34.58%

5.83%

Medicinal
products

139.7

137.9

35.7

38.6

8.12%

3.68%

Yarn and fibers

106.5

134.7

46.9

26.2

-44.14%

2.50%

Buses and trucks

55.8

48.4

4.2

26.1

521.43%

2.49%

Other metal ores, metal waste scrap,

and products

195.7

104.6

29.5

19.3

-34.58%

1.84%

Other

825

823.2

201.3

170.8

-15.15%

16.28%

Total

3,020.1
0

3,198.2
0

810.3

1,048.90

29.45%

100.00%

and

pharmaceutical

Major Items of Thai imports from India (Million US$)

Product

2011

2012

2012
Mar.)

Iron and steel and their products

195.2

639.9

45.6

Precious stones and jewellery

442.1

388

Polymers of ethylene, propylene, etc

in primary forms

487.9

Chemical products

(Jan.-

2013
Mar.)

(Jan.-

%Growth

%Proportion

179.3

293.20%

12.84%

89

136.7

53.60%

9.79%

461.5

119.6

125.6

5.02%

9.00%

734.3

582

160.1

108.4

-32.29%

7.76%

Spark-ignition reciprocating internal

combustion piston

288.8

381

90.4

105.4

16.59%

7.55%

Machinery and parts thereof

258.4

271.1

70.2

74.6

6.27%

5.34%

Motor cars, parts and accessories

267.1

297.9

80.2

71.6

-10.72%

5.13%

Air conditioning machine and parts

thereof

158.7

264.3

72.2

71.6

-0.83%

5.13%

Automatic data processing machines

and parts thereof

206.9

188.8

48

41.1

-14.38%

2.94%

Radio-broadcast receivers, television

receiver and parts

85.5

149.2

34

35.4

4.12%

2.54%

Other

2,056.40

1,852.90

554.7

446.7

-19.47%

31.99%

Total

5,181.50

5,476.70

1,364.10

1,396.20

2.35%

100.00%

17

FREE TRADE AGREEMENT

1. India Thailand Free Trade Agreement
The Framework Agreement for Establishing the Free Trade Agreement between India and
Thailand had been done in Bangkok on October 2003 and has been entered into force on January
2004. Thailand and India have agreed to reduce tariffs between items to accelerate tax cuts (Early
Harvest Scheme) for 83 items. These 83 items will be having a tax rate of 0% since September
2006. Thailand-India are still negotiating further liberalization to cover the rest of the items.
2. India-Asean Free Trade Agreement.
The trade agreement between India and ASEAN has already come into effect with the exception
of Indonesia. Starting from January 2010, the tariff liberalization under the India-ASEAN FTA
was to gradually cover 75% of the two-way trade between India and the ASEAN member
countries. The FTA will lead to the elimination of tariffs on some 4,000 products including
electronics, chemicals, machinery and textiles. Of these 4,000 products, 3,200 products will have
duties reduced by the end of 2013, while duties on the remaining 800 products will be lowered to
lowered to zero or almost zero by the end of 2016.

India has recently inked a free trade agreement (FTA) with Thailand for setting up of a free trade
area covering goods, services and investment in 10 years. The Indo-Thai FTA covers as many as
84 items and several areas in the first phase including services, investment, economic
cooperation and goods like food items, tourism, auto parts, electronic goods. As per the Early
18

harvest scheme (EHS) under the agreement, a common list of items for exchange of tariff
concession at 6-digit level and tariff on these identified items is slated to be phased out by March
1, 2006. As per agreement, negotiations on goods will begin from January 2004 and will be
concluded in March 2005 and the FTA for zero duty imports will be put into effect by 2010.
Similarly negotiations on investment would start in January 2004 and is expected to be
completed within two years. Currently, discussions are continuing on the framework of Rules of
Origin.

19

4.1-EXPORT IMPORT ANALYSIS

India is one of Thailands fastest growing trade partners among major economies. With the
initiation of FTA, there has been a significant growth in trade flows between the two countries.
India was Thailands 17th largest trading partner and the 11th largest export destination in 2010.
Since the Thailand-India Free Trade Agreement Framework was concluded in October 2004,
bilateral trade between them has tripled. However, The amount of Indias total exports to
Thailand, in 2004 05, amounted to US $ 0.90 billion while the corresponding value of Indias
imports from Thailand was US .$ 0.87 billion. By 2008 09, the exports have crossed over US
$ 1.9 billion and imports over US $ 2.7 billion. Following Tables and Chart show the recent trend
in Indo Thailand trade. Thus, an overall trend in the growth of exports and imports between
India and Thailand shows that the growth in both exports and imports has been at faster rate after
the framework agreement was signed between the two nations.
India Exports to Thailand (In US $ millions)
Year
2004
2005
2006
2007
2008

Indias Export
831.68
901.39
1075.31
1445.54
1810.87

Global Export
63842.55
83535.94
103090.53
126414.05
163132.18
20

% Share
1.30
1.07
1.04
1.14
1.11

% Growth
16.94
8.38
19.29
34.43
25.27

2009
2010
2011

1938.31
1740.16
2792.80

185295.36
178751.43
251135.89

1.04
0.97
1.11

7.04
-10.22
60.49

Global Import
78149.11
111517.43
149165.73
185735.24
251654.01
303696.31
288372.88
369769.13

% Share
0.77
0.77
0.81
0.94
0.91
0.89
1.01
1.15

% Growth
6.75
42.17
39.93
44.25
31.65
17.51
8.42
45.73

Indias Import with Thailand

Year
2004
2005
2006
2007
2008
2009
2010
2011

Indias Import
609.65
865.88
1211.58
1747.75
2300.93
2703.82
2931.52
4272.09

Though it is seen that the present level of India Thailand trade is low, it is increasing over
time. Indias total trade with Thailand has increased especially since 2003 04 during which
the framework agreement for a free trade agreement between the two countries was signed.
Imports from Thailand have been increasing at a faster rate than the increase in exports. India has
enjoyed a trade surplus since 2004 05 after which imports have been more predominant.
Thailands import demands are high and India has great capacity to meet export supply for a
large number of commodities of Thailands import demands. Thailands Ratio of exports to GDP
is 58.8 and Ratio of imports to GDP is 61.5. Thailand also experienced the severe financial crisis
in late nineties. Its economic growth fell in negative to (-) 10.5% in 1998 from (-) 1.4% in 1997;
the economic growth recovered to 4.4% in 1999 and 4.6% in 2000.6.
Fig. Showing the Indias export and import with Thailand. During 2003-04 export increased
from US $ 831.68 million to 2792.80 in 2010-11 .This was largely due to trade openness,
reduction in tariff and more openness to foreign investment and FTA agreement between the two
21

countries. However, on the import side, during 2003-04 the import increases from US $ 609.65
million to 4272.09 million I US $ n 2010-11.

4.2-RECENT DEVELOPMENT AND SOME IMPORTANT

ISSUES IN REFERENCE TO THAILAND.
India and Thailand have already cut duties on 82 products, including fruits, vegetables, wheat,
diamonds and some metals, under a framework agreement that came into operation in September
22

2004. India and Thailand are aiming to abolish duties on goods traded between the two countries
by 2010. Thailand, which used to run a deficit in its trade with India, has registered a US $ 140
million trade surplus in 2005 06, even before tariffs on 82 items covered under the scheme
were brought to zero. According to government sources, Thailand wants greater market access in
natural rubber, being a major exporter of the product. However, natural rubber is expected to be a
part of Indias negative list. In the negotiations of goods, India has agreed to eliminate tariff on
more than 4000 products in a phased manner, while 500 others will be in the sensitive list, which
will see partial duty cuts, over a period of time. Nearly 500 other items in the negative list will
not be subject to any tariff cut, so as to protect the interests of the domestic industry.
Overall, the balance of trade has tilted in favor of Thailand with Indias exports growing at an
average of 26% for the past three years since 2004 05 till 2007 08 and Indian imports
growing at 38% during this period. India needs to improve the quality of infrastructure facilities
with a view to become more competitive vis-a-vis imports from Thailand. High rates of taxes
and duties, low labor. Productivity and procedural complexities are impacting the
competitiveness of Indian industries. Indian business can also take the advantage of Thailands
liberal attitude towards foreign investment as the Thai government recognizes the important
contribution of foreign investment to the domestic economy. Thailand has sought more Indian
investment in IT and pharmaceuticals the two areas in which India has proven expertise. India
and Thailand have injected a new vigor into their bilateral trade in recent years, with bilateral
trade increasing six-fold over the past decade. The current bilateral trade figure of $7.5 billion is
itself set to double by 2015.

23

CHAP 5-CONCLUSION
This paper indicates that the pattern of trade between India and Thailand has shown sign of a
change after signing the FTA. At present, Indias imports from world are US$ 50434 million as
compared to Thailands imports of around US$ 56915 million .Both these countries have
24

captured a Small market of each other. There is lot of scope that exploring FTA will lead to
significant increase in bilateral trade between India and Thailand. It should be remembered that
the present level of India-Thailand trade is low, but is increasing overtime. This increase has
been noticed particularly in Indias imports from Thailand. Consequently, the trade gap, which
has traditionally been heavily in Indias favor, has reduced considerably. Thailands import
demands are quite high and India will be able to meet export supply for a large number of
commodities of Thailands import demands. The present level of Thailands imports from India
is small; hence India will be able to capture a large portion of Thailands market for these
commodities. Thailand is relatively a more open economy than India.
To use a common expression, we believe that India is now, more than anytime in modern history,
poised to take its rightful place in the global trade arena. The effect on Asia and the world will be
immense once the India market fully opens up. The free trade frameworks with the ASEAN
region and Thailand are first steps among certainly many other steps, towards a more global
integration. Thailand stands to benefit from the free trade framework, and we believe that with
our proximity to India, and the long history of cultural exchanges, Thailand can also serve as a
one of the gateways to India.

WEBLIOGRAPHY
http://www.ejsit.org/journal2/journal18.pdf
http://www.mea.gov.in/Portal/ForeignRelation/Thailand-February-2012.pdf
25

http://www.indexmundi.com/thailand/demographics_profile.html
http://www.marketing-schools.org/types-of-marketing/internationalmarketing.html

26