Shinawatra’s PM rise signals dynastic return, political shifts.

INDIA THAILAND RELATIONS

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Context: Paetongtarn Shinawatra’s rise as Thailand’s youngest PM highlights the return of a controversial political dynasty amid ongoing instability, with economic challenges and diminished reform prospects.

Details

Paetongtarn is the daughter of Thaksin Shinawatra, a former Prime Minister who was removed in a military coup in 2006. Thaksin's tenure was marked by populist policies that won him significant support among Thailand’s rural poor but also faced criticism from the urban elite and the military.
- - His sister, Yingluck Shinawatra, also served as Prime Minister from 2011 until her removal in 2014, also by a coup.
  - Both Thaksin and Yingluck were known for their reformist agendas and policies aimed at reducing inequality, but their terms were marred by controversies and political conflicts.
Paetongtarn’s return to power comes during a turbulent period in Thai politics, where the influence of the military and the monarchy has been prominent. Her election could signal both a return to familiar patterns and the potential for new political dynamics

●Thailand shares land borders with four countries: Myanmar, Cambodia, Laos, and Malaysia.

●The highest peak is Doi Inthanon, other notable mountains include Doi Chiang Dao and Doi Luang Chiang Dao.

●The Chao Phraya River, flowing through Bangkok, is central to the country's transportation and irrigation systems.

●The country is a leading exporter of rubber.

India-Thailand Bilateral Relations

India and Thailand share a relationship that dates back centuries. These two nations have been connected through trade, culture, and religion since ancient times.
The influence of Indian culture is evident in Thailand’s language, art, and religion. For example, many Thai customs and traditions have roots in Hinduism and Buddhism, which originated in India.
Over the past two decades, this historical bond has evolved into a comprehensive partnership. The relationship now spans various sectors, including trade, investment, defence, and tourism.

Trade Growth and Major Exports/Imports

Despite the challenges posed by the COVID-19 pandemic, trade between India and Thailand has shown remarkable resilience and growth.
In 2020, trade between the two countries was valued at $9.76 billion. By 2021, it had surged to around $15 billion. This trend continued, with trade figures reaching $16.89 billion in 2022-23.
India's Major Exports to Thailand:
- - Pearls, Precious Stones, and Jewelry: India exported $1.02 billion worth of these items to Thailand in 2022-23.
  - Mechanical Machinery and Parts: Valued at $570 million from April-November 2023-24.
  - Marine Products: India’s marine exports to Thailand stood at $219 million during the same period.
India's Major Imports from Thailand:
- - Vegetable Oils: India imported $523 million worth of vegetable oils from Thailand between April and November 2023.
  - Plastic Raw Materials: Another significant import, valued at $915 million.
  - Electronic Components: India imported $895 million worth of electronic components from Thailand in the same period.

Investment and Economic Cooperation

Thailand ranks as the 27th largest investor in India, with a combined Foreign Direct Investment (FDI) of $1.39 billion from April 2022 to September 2023.
Indian companies like Tata Steel and Tata Consultancy Services have established a significant presence in Thailand, contributing to the country’s economic development.
Thai companies in agro-processing, construction, and automotive sectors are actively investing in India. The mutual investments highlight the growing economic cooperation between the two nations.

Connectivity Projects

●India-Myanmar-Thailand Trilateral Highway: This ambitious project aims to enhance land connectivity between India and Southeast Asia. It will facilitate trade, tourism, and people-to-people contacts, significantly boosting economic ties.

●Dawei Project: The development of the Dawei deep-sea port in Myanmar, with connectivity to Chennai, will provide India with an alternative sea route to Southeast Asia, reducing dependency on the congested Strait of Malacca.

Tourism and People-to-People Ties

Tourism is a vital component of the India-Thailand relationship. In 2022, Indian tourists became the largest group visiting Thailand.
- - This surge in tourism is not just a reflection of the two countries’ strong ties but also a boost to their economies. The ease of travel, cultural affinity, and Thailand’s appeal as a tourist destination contribute to this growing trend.
The Indian community in Thailand, numbering around 250,000, plays a significant role in promoting ties between the two nations. This diverse community includes Punjabis, Tamils, Gujaratis, and more, contributing to the cultural and economic fabric of Thailand.

Recent Developments

Key highlights of the meeting of the India-Thailand Joint Trade Committee (JTC) 2023:

Bilateral Trade Review:
- - Thailand is a significant trading partner for India within the ASEAN region, with total trade between the two countries reaching USD 16.89 billion in 2022-23.
  - Thailand accounts for 13.6% of India’s total trade with ASEAN, with India exporting gems and jewellery, mechanical machinery, auto components, and agricultural products, particularly marine products, to Thailand.
Trade Expansion and Market Access:
- - The chairs emphasized the need to identify new products and priority sectors to expand bilateral trade.
  - Both sides discussed market access issues and technical barriers, agreeing to resolve these challenges through regular discussions.
  - India raised concerns about restrictions on its exports of marine, poultry, and meat products.
Potential Sectors for Collaboration:
- - Both countries identified value-added marine products, smartphones, electric vehicles, food processing, and pharmaceuticals as sectors with significant potential for strengthened partnerships.
  - They also recognized opportunities in the service sector, particularly in areas such as nursing, accounting, audiovisual services, and medical tourism, and agreed to explore mutual recognition or cooperation arrangements in these fields.
Technological and Financial Integration:
- - The meeting reviewed progress on connecting India’s Unified Payment Interface (UPI) with Thailand’s Prompt Pay Service and discussed the potential for settling trade transactions in local currency.

The Role of Policies in Enhancing Relations

●India’s Act East Policy and Thailand’s Look West Policy: These policies have provided a solid foundation for enhancing bilateral ties.

The Act East policy, launched by India in 2014, aims to strengthen economic and strategic relations with Southeast Asian countries, including Thailand.
Thailand’s Look West policy focuses on increasing engagement with South Asia, with India being a key partner.

●Impact on Trade and Investment: These policies have led to reduced tariffs, increased trade, and a boost in investment flows between the two countries. For example, the reduction in tariff rates has made Indian products more competitive in the Thai market, leading to a significant increase in exports.

Challenges in India-Thailand Relations

Trade Imbalances and Market Access Issues

Despite increasing trade, there are persistent issues regarding trade imbalances and market access.
India exports high-value items like precious stones and machinery to Thailand but faces restrictions in exporting marine products, poultry, and meat. Thailand, in turn, has barriers to its exports to India, which include tariffs and non-tariff barriers.
In the fiscal year 2022-23, India exported $5.71 billion worth of goods to Thailand but imported $11.19 billion. This imbalance reflects ongoing trade issues and highlights the need for better market access agreements.

Technical and Non-Tariff Barriers

Both countries face technical barriers that hinder smooth trade. These include stringent quality standards, certification requirements, and regulatory hurdles that can delay or restrict exports.
Indian marine exporters encounter restrictions related to Thai food safety standards. Addressing these technical barriers is crucial for enhancing bilateral trade.

Investment and Infrastructure Development

While both nations have significant investments in each other’s markets, there is room for infrastructure improvement, particularly in sectors like logistics, digital technology, and renewable energy. Inadequate infrastructure can hamper trade and investment efficiency.
India's infrastructure for handling Thai imports like electronic components and plastic raw materials is not fully optimized, which can lead to delays and increased costs.

Geopolitical and Regional Dynamics

Regional geopolitical tensions and competition among ASEAN countries can affect bilateral relations. Thailand's strategic location and its integration into the ASEAN Economic Community (AEC) add layers of complexity to India-Thailand relations.
The shifting dynamics in Southeast Asia, including China's growing influence, can impact how Thailand engages with India and other regional partners.

Association of Southeast Asian Nations (ASEAN)

●Member States: ASEAN is composed of 10 member states in Southeast Asia; Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

●Population and Area: The member states collectively have a population of over 600 million people and cover an area of more than 4.5 million square kilometres.

●Economic Impact: In 2022, ASEAN generated purchasing power parity (PPP) gross domestic product (GDP) of approximately USD 10.2 trillion, accounting for about 6.5% of global GDP (PPP).

●Objectives:

Economic and Social Development: Accelerate economic growth, social progress, and cultural development in the region.
Regional Peace and Stability: Promote regional peace and stability by respecting justice and the rule of law and adhering to the principles of the United Nations Charter.

●Global Engagement: ASEAN maintains diplomatic missions worldwide. It partners with organizations like the United Nations (UN), Shanghai Cooperation Organization (SCO), Pan-African Union (PA), Gulf Cooperation Council (GCC),.

●Influence: ASEAN is considered a global powerhouse and central forum for regional cooperation. It has been a driving force behind significant trade blocs, including the Asia-Pacific Economic Cooperation (APEC) and the Regional Comprehensive Economic Partnership (RCEP).

Way Forward

Strengthening Trade Agreements

To address trade imbalances and market access issues, India and Thailand need to negotiate and implement more comprehensive trade agreements. This includes addressing specific barriers to trade and ensuring that both sides benefit equally from the partnership.
Revise existing trade agreements to include provisions that specifically address the challenges faced by sectors such as marine products and poultry. This could involve mutual recognition of standards and streamlined certification processes.

Enhancing Technical Cooperation

Both countries should focus on reducing technical barriers through collaborative efforts. This includes harmonizing standards and regulations to facilitate smoother trade flows.
Establish joint working groups to tackle specific technical issues, such as food safety standards for marine exports. This could involve regular meetings and consultations to resolve ongoing concerns.

Investing in Infrastructure

Improving infrastructure in both countries is essential for supporting trade and investment. This includes enhancing logistics, digital infrastructure, and energy sectors to make trade more efficient and less costly.
Develop dedicated logistics hubs in India to handle Thai imports more effectively, reducing delays and costs associated with transportation and warehousing.

Expanding Collaborative Initiatives

India and Thailand should explore new areas of collaboration, such as digital technology, renewable energy, and medical tourism. These sectors offer significant potential for mutual benefit and can drive future growth in bilateral relations.
Collaborate on joint ventures in renewable energy projects, leveraging Thailand's expertise in solar energy and India's growing market for clean energy solutions.

Strengthening People-to-People Ties

Enhancing cultural and people-to-people exchanges can further strengthen bilateral relations. Increased tourism, educational exchanges, and cultural events can build stronger bonds between the two nations.
Expand educational exchange programs and cultural festivals to increase understanding and cooperation between the people of India and Thailand.

Conclusion

India and Thailand’s relationship is built on a rich history of cultural exchanges and has grown into a comprehensive partnership in recent years. With both countries actively working to enhance trade, investment, and strategic ties, the future looks promising. Initiatives like the UPI-Prompt Pay integration and increased defence cooperation are likely to further strengthen this partnership, making it a model for regional collaboration in Southeast Asia.

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INDIA THAILAND RELATIONS

Source:

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PRACTICE QUESTION

Q. How many of the following countries share a border with Thailand?

1. Laos

2. Malaysia