Free Trade Agreement with Thailand and India: Boosting Trade and Investments
The signing of free trade agreements (FTAs) between countries is becoming increasingly common in the interconnected world of global trade. These agreements aim to promote trade and investments between the involved countries by reducing or eliminating trade barriers such as tariffs and quotas. Recently, Thailand and India have signed an FTA that is expected to significantly boost bilateral trade and investments between the two nations.
The FTA, also known as the Thailand-India Free Trade Agreement, was signed in 2003 but only came into effect in 2015 after several rounds of negotiations. This agreement covers trade in goods, services, and investments and is expected to create a more conducive environment for businesses, particularly small and medium-sized enterprises (SMEs), to engage in cross-border trade and investments.
Under the FTA, tariffs on 82% of Thailand`s exports to India and 62% of India`s exports to Thailand have been eliminated or reduced. This means that businesses can now export and import goods at lower costs, making them more competitive in their respective markets. The FTA also covers services such as banking, tourism, and education, among others, allowing businesses to tap into new opportunities in these sectors.
Apart from reducing trade barriers, the FTA also includes provisions that protect investments and promote cooperation between the two countries. This includes provisions for the protection of intellectual property rights and the settlement of disputes between investors and host countries. These provisions give businesses more confidence to invest in each other`s countries, which can lead to the creation of new jobs and the transfer of technology and knowledge.
The FTA is expected to benefit both Thailand and India. For Thailand, the agreement provides access to India`s large and growing market of over 1.3 billion people. India is also a significant source of raw materials and components for Thailand`s manufacturing sector. For India, the FTA provides access to Thailand`s booming tourism industry as well as its expertise in agriculture and food processing. India can also use Thailand as a gateway to the ASEAN market, which has a combined population of over 600 million.
In conclusion, the signing of the free trade agreement between Thailand and India is a significant milestone that is expected to bring tremendous benefits to both countries. The FTA will not only promote trade and investments but also strengthen the relationship between these two important economies. Businesses, particularly SMEs, should take advantage of the new opportunities provided by the FTA and explore ways to expand their operations in each other`s countries.