Indian opportunities for Thai business
By Jon Fernquest
Thai-Indian trade and Free Trade Agreement (FTA)
Four years ago Thailand and India signed a free trade agreement (FTA). Since then, trade between the two countries has increased to three times its original value, rising from $1.5 billion to $4.7 billion.
Currently 82 different kinds of goods can pass freely between the two countries without paying tariffs. If negotiations go smoothly, 6,000 more goods will be passing freely between India and Thailand as early as July 2009. Negotiations on these goods may completed as early as October.
Thai FDI necessary for areas excluded from FTA
Some important sectors such as agriculture, textiles, garments, and automobiles were not included in the FTA.Even though tariff-free trade is not possible, foreign direct investment (FDI) is still possible for goods and services in these sectors. Thailand's largest automotive parts manufacturer, Thai Summit, has already built three factories in India and is currently building its fourth factory.
CP Group leads the way in India
CP Group, Thailand's largest agribusiness company, is already running two animal feed plants. The plants together account for $60 million of Thai foreign direct investment (FDI) in India.
CP Group will be adding two more animal feed plants soon, located in areas of India rich in raw materials. A $10 million plant in Assam should be completed by 2010. A shrimp feed plant will be located in Gujarat.
Unique challenges of business in India
With a population of one billion, India has large markets that rival China, markets with great business potential for Thai companies looking to expand into global markets.
India's middle class has been expanding. Among young Indians, 40% are middle-class consumers with high purchasing power.
Appropriate Thai technologies may often be exactly that this emerging middle class needs. India has increasing demand for many of the goods that Thailand has already developed expertise in, such as ready-to-eat food and consumer electronics, televisions, and washing machines.
Thai restaurants may also have potential since many Indians are changing their lifestyle with their new found wealth, choosing to eat out at restaurants more often.
There are occasional problems that Thai business people venturing into India to do business for the first time have to watch out for.
Regulations such as customs clearance can be time-consuming and difficult. Labour strikes can affect the flow of goods through ports and trucking networks.
India is an ancient society with longstanding traditions that business people should study and be aware of. The caste system, that structures many relations between people in Indian society, is an example from ancient history. A more recent example are differences and possible conflicts between federal and state laws.
Highway from Thailand to India via Burma
A road is planned between Thailand and India traveling through Burma. This might eventually make the flow of goods and people between Thailand and India a lot easier. Construction has already began on the Thai and Indian sides but construction in the Burmese area in-between has gone more slowly. The Burmese government still has to choose a route that avoids politically sensitive areas.
(Source: Bangkok Post, business, NAREERAT WIRIYAPONG, 12-07-08, temp-link)
Vocabulary:
Free Trade
Agreement (FTA) - an agreement between two or more countries
that seeks to increase trade by decreasing tariffs สนธิสัญญาการค้าเสรี
pass freely between A and B - moving from A to B
without restriction or paying taxes นำเข้าและส่งออกโดยไม่ต้องเสียภาษี
tariffs
- taxes that must be paid on goods coming into a country (import
goods) พิกัดอัตราภาษีศุลกากร
tariff-free trade - trade between countries without
having to pay taxes ได้รับการยกเว้นภาษีศุลกากร
negotiations
- formal business discussions to reach an agreement การเจรจาต่อรอง
negotiations go smoothly - no problems occur, so an
agreement can be reached การเจรจาเป็นไปด้วยความราบรื่น
garments - clothes เสื้อผ้า
Foreign Direct
Investment (FDI) - money invested by a foreign company in the
business of a country เงินลงทุนจากต่างประเทศ
agribusiness - large companies whose business is
agriculture-related บริษัทที่ค้าขายเกี่ยวกับสินค้าทางการเกษตร
animal feed
plants - factories that produce food for animals
โรงงานผลิตอาหารสัตว์
X accounts for Y of Z - X is a part of Z, X is the
amount of percentage Y ก เป็นเหตุผลของ ข
raw materials - the materials used in a factory to
produce goods from วัตถุดิบ
Assam
- a small separate area of India, located north of Bangladesh and to
the East of Burma รัฐอัสสัม
the potential of
Y - the possibility of Y of being successful
แนวโน้มที่จะเกิดขึ้น
have potential - has a good possibility for success
มีศักยภาพ
business potential of Y - the possibility that Y
could be used successfully in business ศักยภาพทางธุรกิจ
looking to expand - planning to expand
กำลังหาช่องทางในการขยาย (ธุรกิจ)
the middle class
- the population of a country that is neither rich nor poor ชนชั้นกลาง
emerging middle class - the population of a country
with growing income that is moving from poor to midle class
ชนชั้นกลางที่เกิดขึ้น
high purchasing
power - have a lot of money (income and wealth) to spend on
goods and services มีกำลังการซื้อมาก
appropriate
technologies - technologies that have features that make them
easier to use in a place (for example, the mini-van is used extensively
in Bangkok for mass transportation, small refrigerators and portable
gas stoves are more appropropriate in Thailand and India than the large
westerns refrigerators and stoves) เทคโนโลยีที่เหมาะสม
expertise - areas of special knowledge and
experience ความชำนาญ ความเชี่ยวชาญเฉพาะด้าน
ready-to-eat food
- food that you can eat after quickly warming อาหารสำเร็จ
occasional
problems - problems from time to time, problems sometimes
ปัญหาที่เกิดขึ้นเป็นครั้งเป็นคราว
watch out for - be careful about (if you see it
happening take action to solve the problem)
ระวังปัญหาที่ำกำลังจะเกิดขึ้น
customs clearance - the requirements and paperwork
necessary to bring goods into a country ระเบียบพิธีการศุลกากร
time-consuming
- uses a lot of time เสียเวลา
labour strikes - when the workers in a company stop
working as protest for higher wages and better working conditions
การประท้วงของแรงงาน
trucking networks
- the roads that trucks travel when delivering goods to customers (and
also the "terminals" or "transshipment points" where goods change
between trucks) สายการเดินรถขนส่งสินค้า
federal laws - laws at the national level (versus
local or state level) กฎหมายระดับประเทศ
politically sensitive areas - areas of a country
where the population is in rebellion (for example, in Karen state, cars
traveling to the town of Myawaddy on the Thai border used to be
accompanied by a military convoy to protect them from attack)