Thailand yesterday signed a memorandum of understanding to form deeper trade partnerships through a so-called mini free trade agreement (mini-FTA) with Telangana state in southern India.
According to Commerce Minister Jurin Laksanawisit, the deepened partnership covers the mutual exchange of relevant market information and best practices regarding policies and programmes; policy design and capacity building support for business sectors; trade and investment opportunities; industrial cooperation; and the establishment of joint ventures.
It also includes business linkages and cluster development to enhance the creativity and innovation of business sectors, including small and medium-sized enterprises (SMEs), in Thailand and Telangana. In addition, the mini-FTA will facilitate business programmes such as seminars, symposiums, workshops, business delegations, business meetings, business matchings, trade fairs, and trade missions, along with other relevant cooperative events organised by each participant or jointly organised by both participants.
Each participant's website or digital platform, such as thaitrade.com for Thailand's Commerce Ministry, or the Telangana State GlobalLinker, would also be linked. The core objective of this would be to connect the participants' startups and SMEs to the global community, in order to help their businesses grow beyond local boundaries.
In addition, Telangana would provide support to Thai investors to acquire necessary approvals to set up their facilities in the Indian state, whereas Thai entrepreneurs would endeavour to maximise local employment and local procurement for their manufacturing and service industry units and work with Telangana to establish forward and backward linkages.
Telangana is situated in India's south-central region. It is the 28th newly formed state, formally established on June 2, 2014, with a total population of about 40 million people and Hyderabad as its capital.
Between 2020 and 2021, its gross state domestic product (GSDP) was equivalent to US$132 billion, contributing 5% to India's overall economy. Telangana has become India's sixth largest state in terms of GSDP, with a GSDP growth rate of 2.4% over the past year. Telangana is the economic hub of various business sectors, especially IT and pharmaceutical products, and is also known as "Cyberabad" and "Genome Valley".
Mr Jurin said the ministry forecasts that two-way trade between Thailand and India will expand by 4-5 % this year, from 474 billion baht in 2021, which increased by 55.8% from 2020.
According to Mr Jurin, apart from Telangana, the Commerce Ministry also plans to pursue similar mini-FTAs with five other Indian states, namely Maharashtra, Karnataka, Kerala, Gujarat and Assam.
Thailand has signed mini-FTAs in other countries. Previous deals were one with Kofu city in central Japan and one with China's Hainan province. The ministry is scheduled to sign another mini-FTA with China's Gansu province on April 27.