India strategic alliance agreed
Thailand and India have agreed in principle to pursue a strategic partnership, focusing mainly on the information technology, digital, service, automotive and pharmaceutical industries.
Deputy Prime Minister Somkid Jatusripitak said Bhagwant Singh Bishnoi, India’s ambassador to Thailand, told him at a meeting yesterday that India was no longer keen on furthering a Thai-Indian free trade agreement (FTA) because of the slow progress of negotiations.
Thailand and India signed a framework agreement covering the liberalisation of trade in goods, services and investment on Oct 9, 2003.
It was agreed that Thailand and India would begin talks and establish a Thai-Indian FTA by 2010. Both countries initially agreed to enact an early harvest scheme (EHS), meaning agreements on one or more topics must be concluded before the scheduled completion of a multi-issue round.
The agreement specified tariff reductions under the EHS for 82 items, including fruits, processed food products, gems and jewellery, iron and steel products, auto parts, electronic goods, and electric appliances. Tariffs on these products were eliminated on Sept 1, 2006.
The government of Prayut Chan-o-cha revived negotiations on comprehensive free trade in 2015 after the talks had stalled for nearly 10 years.
A huge trade deficit was possibly one of the key reasons that India baulked at pursuing further trade talks.
India is Thailand’s 15th-largest trading partner overall and largest in South Asia. In 2016, two-way trade between Thailand and India totalled US$7.73 billion (270 billion baht), down 2.5% from 2015. Exports from Thailand amounted to $5.15 billion, down 2.7% from a year earlier.
Mr Somkid said India had also shown strong interest in joining the Regional Comprehensive Economic Partnership (RCEP).
The RCEP was launched in November 2012 with the aim of establishing deeper economic cooperation among the 10 Asean members and six dialogue partners: China, India, Japan, South Korea, Australia and New Zealand.
The 16 countries have missed the deadline for concluding negotiations twice, in 2015 and last year.
Officials have held 16 rounds of negotiations, with the last one taking place in Indonesia last December.
In a bid to conclude the trade liberalisation agreement, senior-ranking officials from RCEP member states are holding the 17th RCEP Trade Negotiation Committee meeting from Feb 22 to March 3 in Japan.
The discussions will focus on tariff reduction and elimination for all 16 members. But Mrs Apiradi said some difficulties still exist, as some members under the RCEP have yet to make bilateral trade agreements, including China-Japan, India-China, China-South Korea, India-Australia, India-New Zealand, China-Australia and China-New Zealand.
“If India joins the RCEP, it will be a powerful example of economic cooperation in Asia,” Mr Somkid said. “Japan has also shown interest in joining the RCEP after the US pulled out of the Trans-Pacific Partnership.”