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| Ambassador Anil Wadhwa chats with Thailand Trade Representative Dr Nalinee Taveesin during her recent visit to India. Dr Nalinee last week was appointed as a deputy minister to the Prime Minister’s Office. |
"The visit by Prime Minister Yingluck is an important step that will help to push for a wide range of memoranda of understanding and agreements to be undertaken," Anil Wadhwa, the Indian ambassador to Thailand, told the Bangkok Post.
Ms Yingluck will be the chief guest _ only one foreign dignitary is chosen each year _ at the country's Republic Day celebrations in New Delhi on Jan 26. The lavish event is broadcast live on most Indian television stations and comes on the final day of the premier's three-day visit.
Topping both countries' to-do list will be setting an agenda to complete the years-old process of sealing a comprehensive free trade agreement.
"Thailand is an important country to India, and that is one of the reasons why the government of India decided to invite Ms Yingluck," said Mr Wadhwa.
The ambassador said other agreements were also likely to be announced. He declined to elaborate but said two potential pacts would deal with extradition and prisoner exchanges.
Other issues being discussed include a mutual legal assistance treaty, which has been enforced in criminal matters but needs to be adapted for economic cases.
The countries have also agreed on an agreement to end double taxation, which would require parliamentary approvals before being signed formally.
Still, it is the FTA that is seen as the centrepiece of the premier's visit, given that talks have gone on for more than seven years.
"The target is to complete the FTA by June or July this year," said Mr Wadhwa.
The envoy offered assurances that there would be no more delays as in the past, due either to political upheaval in Thailand or contentious issues on rules of origin or other issues.
The two countries have had an early harvest programme that reduced tariffs on 84 items, and the FTA is likely to push the list of items to well past 1,000, which would likely give Thailand a larger surplus. Currently Thailand enjoys a major surplus from the 84 items on the early harvest list.
"We are not concerned about the surplus because India is a growing economy and it needs to import raw materials to feed into its manufacturing industries," Mr Wadhwa said.
The early harvest has helped bring two-way trade to a record high last year and the target for 2012 of $10 billion seems "conservative", according to Mr Wadhwa.
"For the nine months (to Sept 30), two-way trade was $7 billion which was a 28% increase year-on-year and the target for 2011 was set at $8 billion, which we are confident we will cross as we can do another $2 billion in the last two months of the year," he said.
He added that the $10-billion figure set for 2012 did not factor in the possibility of the FTA being signed, in which case the value could be even greater.
"It usually takes two to three months after an FTA is signed for the effects to trickle through," he said. If a signing takes place in June or July, benefits could be seen in the fourth quarter.
The aim is to make business as seamless as possible for both sides and although some restrictions may remain, the opening up of the Indian economy to Thai businesses is likely to be beneficial.
The Indian economy is very much domestic consumption-based, which might give the country a slight advantage over giant rival China in the short term. With the slowdown in the United States and European Union, which account for about 23% and 22% respectively of overall exports from China, the likelihood of the Chinese economy slowing down is high.
The Indian government, Mr Wadhwa says, is also willing to support Thailand's efforts to help create a huge industrial complex at Dawei in Myanmar.
Italian Thai Development Plc (ITD) is the lead player in this massive project, holding a 75-year concession for 160,000 rai in the port city.
ITD, Thailand's largest contractor and also one of the larger construction companies operating in India, has said that it plans to secure at least US$12.5 billion worth of loans this year to develop key infrastructure for Dawei.
Of the $12.5 billion, about $3.5 billion will be for port and road construction, $2 billion for a rail project and $7 billion for power plants with combined capacity of 4,000 megawatts.
However, the Myanmar government declared recently that it would not allow coal-fired power plants on environmental grounds, so the power plants will require a rethink.
Under the master plan, a deep-sea port will be developed on 6,100 rai, power plants will take up 2,300 rai, 13,750 rai will go to an integrated steel mill, 8,700 rai for oil and gas projects, 17,220 rai for a petrochemical complex, and 2,400 rai for a fertiliser plant.
"Indian companies are interested in this project as well," said Mr Wadhwa. "There are a range of clusters that are going to be developed in Dawei and India has its strength in the steel, petrochemical and other sectors.
"Even the government of Myanmar has asked us to join this project and therefore we can do it jointly [with Thai interests]. If we can match our strengths then we would be a formidable competitor to anyone."
