BANGKOK, 10 October 2003 — India and Thailand yesterday signed a landmark free trade agreement (FTA) providing for free trade on all goods by 2010, witnessed by Prime Ministers Atal Bihari Vajpayee and Thaksin Shinawatra.
The signing ceremony followed bilateral talks between the two leaders on the first day of a four-day visit to the kingdom by India’s Vajpayee.
The FTA allows for an “early harvest” scheme which will see tariffs slashed to zero over two years from March next year on 84 products worth about 7.6 percent of total two-way trade, according to Thai Commerce Ministry officials.
Thaksin told reporters he hoped two-way trade, valued at 1.2 billion dollars, would almost double next year as a result of the deal.
“I hope that two-way trade with India will grow to $2.0 billion next year,” he said, noting that the deal will give Thai business free access to a market of more than one billion people, 50 million of whom are millionaires.
The agreement includes products such as fruit, tinned seafood, jewelry, air conditioners, televisions, radios and furniture.
Thailand is the third country to reach a free trade deal with India after Nepal and Sri Lanka, while India is the second country to sign such a pact with Thailand after China.
For Thailand, the FTA with India establishes it as a strategic partner to balance the kingdom’s political and trade ties with China.
Thaksin urged Thai businesspeople to prepare themselve as the kingdom creaks open the door completely to free trade with 2.3 billion people.
“Thailand is the first country to sign free trade agreements almost simultaneously with the world’s two most populous countries, China and India,” he said.
Thaksin and Vajpayee witnessed the signing of the deal by their respective commerce ministers along with four other agreements, which focused on aviation, visa waivers for diplomats and cooperation in agriculture and biotechnology.
The “open skies” deal grants Thai airlines permission to fly to a further 18 cities on top of four current destinations, while Thailand will allow Indian airlines to fly to provincial destinations.
