Introduction

Although India and Thailand established diplomatic relations in 1947, their economic and cultural ties date back over 2,000 years, with Indian traders and seafarers travelling to the Far East. While bilateral relations remained subdued for almost four decades due to Cold War prejudices, the 1990s invigorated relations both bilaterally and in multilateral groupings.

Since then, both nations have engaged in multilateral groupings, including the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), the Association of Southeast Asian Nations (ASEAN), the East Asia Summit (EAS), the Indian Ocean Rim Association (IORA), the Mekong Ganga Cooperation (MGC), the Asia Cooperation Dialogue (ACD), and the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS).

Thailand's "Act West" policy in 2016 and India's "Act East" policy in 2014 complement each other. While the "Act West" policy views India as Thailand's gateway to South Asia, the "Act East"^[a] policy views Thailand as a strategically significant partner to India’s footing in Southeast Asia. On 3 April 2025, bilateral ties were elevated to a strategic partnership during Indian Prime Minister Narendra Modi’s visit to Bangkok for the BIMSTEC Summit.

This paper is organised into six sections. The first reviews the macroeconomic landscape of India and Thailand, tracing the origins of their bilateral economic engagement and the institutional frameworks shaping their relationship. The second and third sections examine trade and investment relations, respectively, highlighting key trends and sectoral dynamics. The fourth explores tourism as a promising area of cooperation, with a focus on cultural and emerging niche segments. The fifth identifies overarching challenges and opportunities across these sectors, and the final section proposes a roadmap for strengthening the bilateral partnership.

Macro Economies of Thailand and India

With a population of 66 million, Thailand is Southeast Asia’s second-largest economy.^[1] IMF data shows that Thailand's Gross Domestic Product (GDP) per capita, based on purchasing power parity (PPP), was estimated at US$23,708 in 2024. India, the world's fourth-largest economy with an estimated GDP of US$4.19 trillion in 2025, is also the fastest-growing major economy, ranking behind the United States (US), China, and Germany.^[2] Its vast market and expanding middle class present opportunities for investors and exporters, while also making it an attractive source of tourists, particularly for Thailand.

Thailand and India are linked through history, geography, culture, religion, ethnic groups, seafaring, and Buddhism. While such soft power ties have cultivated connections bilaterally and multilaterally since India’s Look East Policy and Thailand’s Look West Policy of the early 1990s, their economic relations have progressed only slowly.

The paper focuses on the economic relationship between Thailand and India. Bilaterally, both countries signed an Early Harvest Scheme (EHS) in 2003 as a precursor to the Thailand–India Free Trade Agreement, covering a limited number of items with preferential tariffs to kick-start broader trade liberalisation. At the level of ASEAN, the Framework Agreement on Comprehensive Economic Cooperation between ASEAN and India, signed in October 2003, provided the legal basis for subsequent agreements, including the Trade in Goods, Trade in Services, and Investment Agreements, which together constitute the ASEAN-India Free Trade Area (AIFTA). The ASEAN-India Trade in Goods Agreement (AITIGA), signed in 2009, entered into force on 1 January 2010.

However, the growing India-ASEAN trade deficit, which has surged from approximately US$7.5 billion in 2010–11 to around US$43.6 billion in 2022–23 (and an estimated US$44.2 billion in 2024–25), has prompted a review of AIFTA, ongoing since September 2022.^[3] Despite nine rounds of negotiations, the review remains incomplete, with efforts focused on making the agreement more facilitative and mutually beneficial.

India and Thailand: Trade Relations

India and Thailand share a deep-rooted economic relationship shaped by geography and strategic policy alignment. Thailand occupies a special place in India’s “Act East” policy, while India features prominently in Thailand’s complementary “Act West” outlook.^[4] These policies have spurred closer ties, with high-level exchanges infusing new dynamism into trade relations​. Within ASEAN, Thailand is India’s fourth-largest trading partner (after Singapore, Indonesia, and Malaysia)​.^[5] As per the Ministry of Commerce of Thailand, in 2024 (January-December), India was the 11^th-largest trading partner of Thailand.^[6]

Thailand’s strategic location makes it a gateway for India into the ASEAN market​. At the heart of the region, it links India to the ASEAN Economic Community (AEC) via land and sea routes. Thailand has world‐class transport infrastructure (deep-sea ports, airports, and rail corridors) and is integrating land corridors through the India–Myanmar–Thailand Highway and the IMT Motor ‐Vehicle Agreement, both still underway, to link Northeast India with Southeast Asia. Its ports (e.g., Laem Chabang on the Gulf of Thailand and the proposed Pak Bara port on the Andaman Sea) are explicitly envisioned as gateways for goods moving between India and ASEAN/EU/Middle East markets.^[7]

Thailand also shares maritime space with India in the Andaman Sea and leads regional groupings (ASEAN, BIMSTEC, ACMECS, and IORA), making it a bridge between South and Southeast Asia. This position is integral to India’s Act East strategy.^[8] ASEAN‑India FTAs and Thailand’s own FTAs (as an ASEAN member) further augment this role, enabling Thailand to serve as a distribution hub for India into ASEAN, and vice versa.

Historically, both nations have pursued trade-liberalising agreements to unlock bilateral commerce. An EHS covering 83 products was implemented in 2004 under a proposed India–Thailand Free Trade Agreement, yielding an initial boost to trade. Later, the AITIGA of 2010 further reduced tariffs region-wide, impacting India–Thailand trade​.^[9] These pacts broadened market access but also intensified competition. Since the late 2000s,^[10] Thai imports have outpaced Indian exports, especially after the ASEAN FTA, resulting in persistent deficits for India​.^[11] This structural challenge has become a focal point in the relationship.

Nonetheless, both governments recognise the importance of trade ties as part of a broader strategic partnership. In April 2025, India and Thailand elevated ties to a Strategic Partnership, pledging to “realise the full potential” of economic cooperation^[b],[12]  Therefore, while political will underpins India–Thailand trade relations, overcoming trade imbalances and leveraging untapped potential remain key priorities in the coming years.

Bilateral Trade: Slow Growth 

Table 1: India and Thailand: Bilateral Trade

FY 2018-2019 to 2023-2024
(Value in US$ Million)
Year	Exports from India to Thailand	Percentage Growth in Exports	Imports from Thailand to India	Percentage Growth in Imports	Volume of Trade	Percentage Growth in Vol. of Trade	Balance of Trade
2018-19	4441.40		7441.81		11883.21		-3000.41
2019-20	4299.30	-3.20	6788.38	-8.78	11087.68	-6.69	2489.08
2020-21	4237.23	-1.44	5682.27	-16.29	9919.50	-10.54	-1445.04
2021-22	5751.30	35.73	9332.59	64.24	15083.89	52.06	-3581.29
2022-23	5709.81	-0.72	11193.36	19.94	16903.17	12.06	-5483.55
2023-24	4800	-15.93	11950	6.75	16750	-0.91	−7150
Annual Compound Growth Rate		≈ 1.59%		≈ 9.50%		≈ 7.12%

Source:  Ministry of Commerce and Industry^[13]

Note: Figures relate to Financial Year (April to March)

India–Thailand trade grew modestly between 2015 and 2024, rising from US$7.9 billion in 2015 to US$16.04 billion in 2023 (see Table 1).^[14] However, this growth has been uneven and punctuated by fluctuations. In 2016, trade stagnated at around US$7.7 billion, but it surged to US$10.86 billion in 2017, driven by increased Indian imports amid the US-China trade tensions.^[15] The upward trend continued marginally in 2018, with trade reaching US$11.88 billion.^[16]

By 2019, trade improved slightly to US$12.14 billion, supported by gradual export enhancements under India’s “Act East” policy.^[17] However, the COVID-19 pandemic led to a sharp decline, with trade falling to US$9.79 billion in 2020.^[18] A strong post-pandemic recovery ensued, with trade rising to US$14.99 billion in 2021 and peaking at US$17.70 billion in 2022, driven by robust Thai exports, particularly electronics and automotive components, as well as strong Indian demand.^[19]

In 2023, however, trade declined to US$16.04 billion, likely due to the Russia-Ukraine conflict and weakening global demand.^[20] A structural imbalance persists: India’s trade deficit with Thailand widened from US$2.66 billion in 2015 to over US$4 billion in 2023, reflecting consistently higher Thai exports to India.^[21]

Bilateral Trade between India and Thailand – Exports and Imports

India–Thailand bilateral trade has more than doubled over the past decade, increasing from US$7.9 billion in 2015 to over US$16 billion by 2023—a growth of approximately 103 percent.^[22] Despite this upward trend, the expansion has been modest and structurally imbalanced, consistently favouring Thailand.

India’s exports to Thailand grew at around 10.7 percent annually, reaching US$5–6 billion in 2023.^[23] In contrast, while growing more slowly at around 8.4 percent annually, Thailand's exports to India have consistently surpassed US$10 billion, sustaining India’s trade deficit.

Several factors explain this imbalance. Thailand’s export base—dominated by electronics, auto parts, and industrial machinery—has matured, supported by robust foreign direct investment (FDI) and integration into ASEAN-wide and East Asian manufacturing supply chains. Though growth has slowed from a higher base, these exports continue to meet India’s expanding consumer and industrial demand.

India’s exports include pharmaceuticals, IT services (not captured in merchandise trade figures), and agricultural products. These have grown faster in percentage terms, but from a smaller base and with lower overall volumes. The “Act East” policy has bolstered India’s trade engagement with Thailand, yet non-tariff barriers in Thailand—such as quotas on Indian black tea, proposed mandatory registration for imported salt, bans on Indian shrimp pending repeated health inspections, high MFN tariffs on bovine meat (around 30 percent), additional local testing of automotive parts despite UN compliance, non-recognition of Indian electrical certifications, costly local bioequivalence studies for generic drugs, and lengthy approval timelines (10–18 months) for pharmaceuticals^[24]—continue to hinder India’s full export potential.

Thailand has benefited substantially from the ASEAN–India Free Trade Agreement, and its stable macroeconomic environment and trade-friendly policies have kept Thai exports competitive in India. Meanwhile, India’s trade continues to be mainly invoiced in US dollars, and INR–US$ fluctuations have at times raised input costs and created pricing uncertainty.^[25]

The COVID-19 pandemic added further nuance to this dynamic. India's pharmaceutical exports surged, driving faster growth, while global supply chain diversification away from China positioned Thailand as a reliable alternative production hub, boosting its exports to India.^[26]

In 2024, bilateral trade was about US$14.94 billion, accounting for only 2.45 percent of India’s total exports (US$602.54 billion) and about 4.97 percent of Thailand’s exports (US$300.52 billion), underscoring untapped potential.^[27] While India’s larger export base partly explains the imbalance, the figures mainly reflect how underdeveloped bilateral trade remains, with each country underrepresented in the other’s trade portfolio. India can expand its ~2.5 percent share in Thailand’s market, and Thailand its ~5 percent share in India’s, if regulatory barriers are reduced and trade agreements are deepened. Addressing these hurdles and aligning priorities could make bilateral trade a cornerstone of their Strategic Partnership.

Export Performance During the Pandemic: Comparing Thailand and India

Both nations faced substantial but differing export disruptions during the COVID-19 pandemic. In 2020, Thailand’s exports to India contracted by approximately 25.11 percent, falling to US$5.5 billion,^[28] while India’s exports to Thailand declined by around 10.08 percent in the 2020–21 fiscal year.^[29] This sharper impact on India’s side can be attributed to stringent lockdowns that hampered manufacturing, logistics, and port operations, weakening overall performance.^[30]

Both countries mounted substantial recoveries in 2021. India’s exports surged by approximately 49.22 percent, reaching US$6.4 billion in FY21–22,^[31] driven by global demand for commodities and pharmaceuticals and a broader recovery in industrial output. Thailand’s exports to India grew by 56 percent to reach US$5.58 billion, backed by a resilient electronics and automotive sector that remained central to its competitiveness.

The trajectory of bilateral trade mirrored these national trends, dropping to US$9.79 billion in 2020 before rebounding to US$14.99 billion in 2021. Pandemic disruptions underscored vulnerabilities in both countries’ supply chains, prompting them to reassess and diversify trade dependencies. The export structure between Thailand and India has diversified over time. The higher diversification helps promote Thailand’s and India’s export value on one side and mitigate the adverse impacts of external shocks on trade activities between the two countries.^[32]

Thailand responded by deepening its integration into regional trade networks, particularly through the Regional Comprehensive Economic Partnership (RCEP) in November 2020, seeking more stable and resilient supply chains. Meanwhile, India has launched strategic initiatives such as Atmanirbhar Bharat (Self-Reliant India) and the Production Linked Incentive (PLI) scheme to reduce import dependency and foster export-oriented manufacturing, especially in key sectors like electronics, mobile phones, and pharmaceuticals.

These policy shifts have shaped post-pandemic trade dynamics. Thailand leveraged its manufacturing base to maintain stability, while India demonstrated a remarkable export recovery, driven by emerging sectors like pharmaceuticals and speciality chemicals.

Both countries have taken critical lessons from the pandemic: diversifying trade partners, building resilient supply chains, and supporting high-growth sectors. India is actively reviewing trade agreements, including efforts to make the ASEAN–India Free Trade Agreement in Goods more balanced and business-friendly. Thailand, meanwhile, is expanding into new markets such as South Asia,^[c] and enhancing value addition in its exports.

These evolving strategies will define the next phase of India–Thailand trade relations. India is targeting high-value exports to Thailand, while Thailand aims to maintain its export competitiveness and reduce external vulnerabilities. The outcomes of these parallel efforts will determine how balanced and robust bilateral trade becomes.

Foreign Direct Investment Flows

The ASEAN region remains significant for global investments, supported by regional connectivity that enhances trade and tourism. The United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) report on inward foreign direct investment (FDI) 2024-25 notes rising intraregional investment in Asia-Pacific countries. This trend is particularly evident in ASEAN, especially in high-technology sectors, where regional integration is facilitating cross-border investment flows and enabling complementary development strategies among member states. The report highlights the importance of implementing policies that enhance domestic capabilities and foster stronger linkages between foreign investors and local enterprises.^[33] It is in this context that the inward FDI policies of Thailand and India will be assessed. 

Policies for Inward FDI

Thailand

In 2024, Thailand ranked fifth in Southeast Asia for inbound FDI, following Singapore, Indonesia, Vietnam, and Malaysia.^[34] The nation has a proactive vision of attracting investments through favourable policies. The Thai government has promoted and supported the private sector, which has been the primary engine of growth. Recognising the role of international investors in economic and technological advancement, Thailand has maintained an open attitude toward foreign capital. Most economic sectors are accessible to international investors, with government clearance required only when applying for specific incentives from the Board of Investment. The combination of these factors and the continued efforts of government agencies to reduce ‘red-tape' and facilitate investors has led to Thailand being among the highest-ranked countries for FDI by independent observers, as well as by foreign investors.^[35]

Thailand’s Board of Investment (BOI) offers a wide range of tax and non-tax incentives to promote foreign and domestic investments. These include corporate income tax exemptions, import duty exemptions on machinery and raw materials, limited land ownership rights for foreign investors, permission to remit money abroad, streamlined processes for obtaining work permits and visas, and additional incentives to bolster innovation, skill development, special zones, and targeted industries.^[36]

Under its ambitious 2025 agenda, the Thai government is prioritising five key sectors: future industries, AI data centres, electric vehicles, precision agriculture, and food technology. Public investments in these sectors are projected to surpass US$21.5 billion (700 billion baht) as Thailand strives to boost its global competitiveness by offering greater incentives and reducing regulations. Major planned projects include two hyperscale AI data centers valued at US$1.84 billion (60 billion baht) and a US$195 million (6.15 billion baht) project to expand the semiconductor supply chain in Chachoengsao.^[37]

India

Backed by strong fundamentals, India has emerged as a key global investment destination, supported by investor-friendly policies and a liberalised FDI regime. Over 90 percent of FDI now flows through the automatic route, with most sectors open to 100 percent FDI, except for a few strategic areas. Recent reforms have raised FDI caps in sectors like defence (up to 74 percent), telecom (100 percent), and insurance (from 49  to 74 percent, with a proposed increase to 100 percent in Union Budget 2025 for companies investing premiums within India).^[38] These measures aim to boost economic growth and attract global capital.

To further enhance the business environment, the government has focused on regulatory simplification, improved infrastructure, and logistics. The Jan Vishwas Act 2023 decriminalised numerous business provisions to improve the Ease of Doing Business (EoDB) and Ease of Living. A Jan Vishwas 2.0 Bill is in the pipeline, alongside the formation of a High-Level Committee for Regulatory Reforms, announced in Budget 2025, to streamline inspections and compliances. Additionally, initiatives like the Business Reforms Action Plan (BRAP) 2024, Logistics Ease Across Different States (LEADS) 2024, and the upcoming Investment Friendliness Index of States aim to encourage healthy inter-state competition and promote a cohesive investment-friendly ecosystem across the country.^[39]

Indian Investments in Thailand

Indian investments in Thailand have displayed diverse trends over the past few years. According to Thailand’s BOI, they surged from US$23.38 million in 2019 to a peak of US$124.73 million in 2021 before declining to US$29.44 million in 2023.^[40]

Prominent Indian companies operating in Thailand, including Apollo Tyres (Thailand) Ltd, Camber Pharmaceuticals Co. Ltd, Coforge Ltd (formerly NIIT), Dr. Reddy’s Laboratories (Thailand) Ltd, Dee Development Engineers Ltd, Dhoot Transmission Pvt. Ltd, Intellect Design Arena Limited, Ivax Paper Chemicals Ltd., Innovative Gloves Co. Ltd, Indian Overseas Bank, NRB Bearing (Thailand) Ltd, Kirloskar Brothers Ltd, Kirloskar South East Asia Co. Ltd, Larsen & Toubro Limited, Polyplex (Thailand) Public Co. Ltd, Rajratan Global Wire Ltd, Parle Products Pvt. Ltd., Ranbaxy, Royal Enfield (Thailand) Limited, Saraff Group, Sicgil (Thailand) Ltd, SRF Industries (Thailand) Ltd, Tata Group (including Tata Steel Thailand, Tata Consultancy Services, and Tata Motors), Tech Mahindra, the Aditya Birla Group, The New India Assurance Co. Ltd, Triveni Turbines DMCC, Usha Siam Steel Industries PCL, Wendt Grinding Technologies Ltd, and CtrlS Datacenters (Thailand) Co., Ltd.^[41] Evidently, these companies are enabling the development of key industries, viz. from chemicals and paper to financial services and banking.

Tables 2(a) to 2(d) provide sector-wise data on Indian investment projects approved by the BOI. The sectoral classification was modified as per the 5-Year Investment Promotion Strategy (2023-2027), with table 2(d) following Series 2023.

Between 2015 and 2024, Indian investments in Thailand were concentrated in a few industries, particularly chemicals, paper, metal products, machinery, and minerals and ceramics. The chemicals and paper industry received 45 percent, 64 percent, and 40 percent of total Indian investment in 2015, 2018, and 2019, respectively. Metal products and machinery experienced a massive spike in 2016, accounting for nearly two-thirds of total Indian investment that year, but declined steadily before phasing out by 2022. The minerals and ceramics industry saw a notable decline, falling from 17.36 percent during 2015–2018 to just 4.57 percent in 2019-2022.

Indian investment in Thailand’s agricultural sector exhibited fluctuating yet notable growth, particularly in the latter years. The services sector saw a steady rise in investment from 2015 to 2020, peaking at 53.68 percent in 2020, indicating growing interest in service-oriented industries. Meanwhile, the electric and electronic products sector gained some traction up to 2019 but was subsequently outpaced by other sectors. The sharp rise in investment in the light industries/textiles sector during 2021 and 2022 hints at a growing investor interest.

Table 2(a): BOI-Approved Indian Investment Projects by Sector (Mn Baht, 2015–2017)

Sectors	2015 (Jan-Dec)		2016 (Jan-Dec)		2017 (Jan-Dec)
	No. of Projects	Investment	No. of Projects	Investment	No. of Projects	Investment
Agricultural Products	2	92.50	0	0.00	3	357.11
Minerals and Ceramics	3	183.60	1	165.00	2	446.00
Light Industries/Textiles	1	256.00	3	42.61	2	158.00
Metal Products and Machinery	3	140.50	5	697.00	0	0.00
Electric and Electronic Products	2	3.18	7	40.80	4	8.50
Chemicals and Paper	2	579.30	3	174.00	1	35.86
Services	2	29.81	2	34.00	5	86.42
Total	15	1284.89	21	1153.41	17	1091.89
Exchange Rate*	1US$=THB – 34.250		1US$=THB – 35.287		1US$=THB – 33.924
Total in million US$		37.52		32.69		32.19

Source: Thailand Board of Investment^[42]

Table 2(b): BOI-Approved Indian Investment Projects by Sector (Mn Baht, 2018–2020)

Sectors	2018 (Jan-Dec)		2019 (Jan-Dec)		2020 (Jan-Dec)
	No. of Projects	Investment	No. of Projects	Investment	No. of Projects	Investment
Agricultural Products	0	0.00	2	26.60	1	50.00
Minerals and Ceramics	0	0.00	1	37.70	2	80.34
Light Industries/Textiles	1	5.50	1	90.00	2	34.00
Metal Products and Machinery	1	20.00	0	0.00	0	0.00
Electric and Electronic Products	7	48.84	6	124.61	3	35.55
Chemicals and Paper	2	276.90	6	289.04	2	414.05
Services	1	80.00	9	158.03	3	711.50
Technology and Innovation Development	0	0.00	0	0.00	0	0.00
Total	12	431.24	25	725.98	13	1325.44
Exchange Rate*	1US$=THB – 32.299		1US$=THB – 31.046		1US$=THB – 31.292
Total in million US$		13.35		23.38		42.36

Source: Thailand Board of Investment^[43]

Table 2(c): BOI-Approved Indian Investment Projects by Sector (Mn Baht, 2021 and 2022)

Sectors	2021 (Jan-Dec)		2022 (Jan -Dec)
	No. of Projects	Investment	No. of Projects	Investment
Agricultural Products	3	2240.87	1	377.00
Minerals and Ceramics	1	280.00	0	0.00
Light Industries/Textiles	4	1091.58	2	902.00
Metal Products and Machinery	2	304.35	0	0.00
Electric and Electronic Products	7	25.08	1	3.00
Chemicals and Paper	2	27.17	1	33.00
Services	2	20.00	1	17.00
Technology and Innovation Development	0	0.00	0	0.00
Total	21	3989.05	6	1332
Exchange Rate*	1US$=THB – 31.980		1US$=THB – 35.053
Total in million US$		124.74		38.00

Source: Thailand Board of Investment^[44]

The data for 2023 and 2024 (post-sectoral reclassification) indicate that the chemical and petrochemical industry continued to attract substantial investment, rising from 17.27 percent in 2023 to 35.22 percent in 2024. The digital industry and the machinery and vehicle industry also experienced strong growth in investment. High-value services captured the lion’s share of Indian investment in 2023 at 69.17 percent but declined in 2024. Nearly 19 percent of 2024 investment was directed towards the agricultural, food, and biotechnology industries. 

Table 2(d): BOI-Approved Indian Investment Projects by Sector (Mn Baht, 2023 and 2024)

Sectors	2023 (Jan-Dec)		2024 (Jan -Dec)
	No. of Projects	Investment	No. of Projects	Investment
Agricultural, Food and Biotechnology Industries	1	4.00	3	157.00
Medical Industry	0	0.00	0	0.00
Machinery and Vehicle Industry	3	59.00	3	132.00
Electrical Appliances and Electronics industry	0	0.00	0	0.00
Metal and Material Industry	0	0.00	1	37.00
Chemical and Petrochemical Industry	2	177.00	2	292.00
Public Utilities	0	0.00	0	0.00
Digital Industry	3	34.00	4	175.00
Creative Industry	1	42.00	0	0.00
High Value Service	4	709.00	1	36.00
Total	14	1025	14	829
Exchange Rate*	1US$=THB – 34.800		1US$=THB – 35.288
Total in million US$		29.45		23.49

Source: Thailand Board of Investment^[45]

The above data suggests a strategic shift in Indian investments in Thailand, moving away from traditional sectors and increasingly focusing on technology-oriented, digital, and high-value service industries, while maintaining strong interest in the chemicals and agriculture. The chemical sector continues to attract steady investments, highlighting its long-term relevance. However, high import tariffs on agricultural products in Thailand—averaging 42 percent ad valorem—limit export opportunities.^[46] As a result, FDI offers a strategic and viable route for Indian businesses to access the Thai market, which India appears to be leveraging through Thailand’s liberal FDI policy. 

Thailand’s Investments in India

Recently, Thailand's investment in India has grown steadily, particularly in infrastructure, real estate, agro-processing, electronics, automotive, food processing, hospitality, and renewable energy. In 2021, Global Renewable Synergy Co., Ltd. invested US$453.29 million in India's renewable energy sector. Figures 1(a) and 1(b) present trends in Thailand's FDI inflows into India, showing both volatility and strong growth. Between 2012 and 2015, investment remained relatively stable at US$10–25 million, except for a spike in 2013. A surge began in 2016, when inflows rose to US$69 million, followed by growth to US$81.34 million in 2017 to US$94.57 million in 2018. Inflows then dropped to US$34.92 million in 2019 but recovered to US$89.92 million in 2020, despite global challenges. The FDI from Thailand has exhibited considerable fluctuations between 2019 and 2023, with 2021 witnessing the highest inflow at US$533.86 million. Overall, the trend indicates a positive trajectory, with inflows recovering and surpassing earlier levels. 

Figure 1(a): Thailand’s Foreign Direct Investment in India (Million US$)

Source: CEIC data.com^[47]

Figure 1(b): Thailand’s Foreign Direct Investment in India (Million US$)

Source: Ministry of Commerce and Industry^[48]

Leading Thai companies in agro-processing, construction, automotive, engineering, hospitality, electronics, banking, and renewable energy maintain an active and expanding presence in India. Major companies include Charoen Pokphand Group, Chia Tai Co. Ltd, Italian Thai Development PCL, Thai Union Frozen Products PCL, Thai Summit Neel Auto Pvt. Ltd., Delta Electronics (Thailand) PCL, Eureka Design India Pvt. Ltd., Srithai Superware PCL (melamine tableware manufacturing), CP AXTRA PCL, Siam Cement Group (SCG), Magnolia Quality Development Corporation Ltd., Dusit Group of Hotels, Vee Rubber Corporation Co., Ltd., Allied Metals (Thailand) Co. Ltd., Tong Garden Food Marketing Pvt. Ltd., Rockworth PCL, Pranda Jewelry Pvt. Ltd., Krung Thai Bank PCL, Global Renewable Synergy Co. Ltd, Aapico Hitech PCL, Shera PCL, and Dutch Mill Thailand.^[49]

The government has significantly increased budget allocations for key sectors under the PLI Scheme in 2025-26, reaffirming its commitment to strengthening domestic manufacturing. Electronics and IT hardware received US$1,040 million (revised estimate for 2024-25), automobiles and auto components US$325 million, and textiles US$133 million.^[50] While some Thai companies in food processing and textiles utilised the scheme, further opportunities exist in polymers, plastics, and rubber. Expanding production in these areas would help reduce India’s import bill. The rubber industry is formulating a PLI-linked scheme for government consideration,^[51] which, once approved, will promote domestic production of rubber and allied products through both domestic and foreign investment.

Thailand and India: Attractive Destinations for Inward FDI?

Foreign investment in Thailand has been driven by simplified government regulations, a growing domestic market, and access to finance and technical expertise.^[52] Thailand’s attractiveness can be assessed through its rankings among global economies: it stood 30th among 69 economies in the 2025 IMD World Competitiveness Ranking, compared to 25^th in 2024 and 14^th in 2020.^[53]  In 2022, Thailand's inward FDI stock was valued at US$306.2 billion, accounting for 2 percent of GDP. Thailand’s largest bank, Bangkok Bank (BBL), forecasts sustained FDI growth in 2025, signalling economic expansion despite global challenges. At the 2025 ASEAN Business Forum, BBL President Chartsiri Sophonpanich noted a 35 percent increase in investment applications to Thailand's Board of Investment in 2024, reaching a decade-high of US$33 billion. Growth is being driven by foreign investments in green industries, electric vehicles, and advanced electronics.^[54]

India ranked 41st out of 69 countries in the 2025 IMD World Competitiveness Ranking, up from 43^rd in 2021.^[55] It placed 27^th in economic performance, 45th in government efficiency, 25th in business efficiency, and 51^st in infrastructure.^[56]

While Thailand is far ahead of India in terms of the world competitiveness ranking, recent FDI trends have been favourable for India. In 2023, India received 23 percent of intraregional FDI in the Asia-Pacific, followed by China (16 percent), Japan (10 percent), Vietnam (10 percent), Malaysia (10 percent), and Singapore (9 percent). India’s largest intraregional inflows came from China’s Powerchip Technology, which announced a US$11.0 billion investment in a semiconductor plant. In the first three quarters of 2024, India, Australia, China, and Japan were the top recipients, with announced investments of US$76 billion, US$38 billion, US$28 billion, and US$25 billion, respectively. In 2024, India again emerged as the leading destination for Greenfield FDI in Asia and the Pacific, attracting an estimated US$76 billion, primarily in semiconductors and renewable energy. ^[57]

Moreover, India has witnessed a number of major deals in FY 2024-25 across various sectors such as semiconductors, metals, renewable energy, communications, automotive OEMs, software, and data processing, involving companies like Powerchip Technology, ArcelorMittal Nippon Steel, STT Global Data Centres, Toyota, VinFast, and Protonas. India's sustained ability to attract large-scale FDI projects is not solely due to its expansive market and growth trajectory but also from the strategic implementation of tailored support policies and incentive programmes that encourage investment. Since 2014, successive initiatives have been introduced to draw investment, with the 2020 PLI scheme having a twin impact: facilitating domestic production and attracting investment into targeted sectors by offering fixed incentives on incremental sales of manufactured goods during the first five years, thereby strengthening India’s manufacturing base.^[58]

Travel and Tourism: Forging People-to-People Contacts

Tourism is a key avenue for enhancing people-to-people connections, deepening mutual understanding, and fostering stronger bilateral relations between India and Thailand. It also reinforces civilisational ties through shared historical and religious traditions like Buddhism, Brahmanism, and Hinduism.

A major project aimed at boosting cross-border trade, tourism, and people-to-people exchanges is the India–Myanmar–Thailand Trilateral Highway (IMT-TH). Although the highway is 70 percent complete, the internal situation in Myanmar has stalled the project. Thailand and India need to engage more actively with the key stakeholders in Myanmar to enable early resumption of the project.

Travel and Tourism Competitiveness

Thailand has become one of the top international destinations for Indian tourists, driven by its hospitable environment, tourist-friendly policies, beaches, and street food. As per the UN Tourism Tracker, Thailand features in the top 10 destinations in the world.^[59] The net sentiment score for Thailand is 49 percent as of 2024.^[d]

Figure 2(a): Inbound Tourism Statistics for India

Source: UN Tourism^[60]

Figure 2(b): Inbound Tourism Statistics for Thailand

Source: UN Tourism^[61]

Despite its larger size, diverse landscapes, and rich cultural heritage, India has consistently lagged behind Thailand in international tourism. Thailand has outperformed India in both tourist volume and growth trajectory, attracting far more international visitors each year. From 2010 to 2019, Thailand’s tourist arrivals surged from 15.94 million to nearly 40 million, while India’s increased from 5.78 million to around 17.9 million.^[62] Even after the COVID-19 pandemic, Thailand’s recovery has been rapid, recording 28.15 million visitors in 2023—almost double India's 18.89 million.^[63] Thailand’s advantage stems from strong tourism infrastructure, aggressive marketing, affordability, and travel-friendly policies, which continue to give it a clear edge over India.^[64]

Initiatives Encouraging Tourism Between India and Thailand

Tourism between India and Thailand is rising due to strategic initiatives by both governments. The Thai government is strategically leveraging music and national festivals, such as Songkran, to attract international tourists, seamlessly blending traditional elements with modern outreach techniques. This dual strategy not only boosts tourism revenue but also strengthens Thailand's soft power. The government has also adopted the “5Fs” framework—food, film, festivals, fighting, and fashion—to promote culture and reshape its global image. To mobilise industry resources, it established the National Soft Power Strategy Committee, complemented by programmes like "One Family, One Soft Power" (OFOS) and the Thailand Creative Content Agency (THACCA), aimed at building a creative and highly skilled workforce of over 20 million people. This ambitious strategy aims to generate 20 million new jobs and foster sustainable economic growth across eleven creative industries: food, gaming, festivals, music, film, literature, arts, design, sports, fashion, and tourism.^[65]

Thailand’s Tourism and Sports Minister, Sudawan Wangsuphakijkosol, has introduced policies to attract more Indian tourists. These include: extending the duration of stay to boost revenue, promoting major events like the "Maha Songkran World Water Festival" in Bangkok and other provinces, encouraging Indian film production in Thailand to strengthen tourism links, and promoting year-round tourism to position Thailand as an attractive destination for Indian travellers throughout the year.^[66]

Air connectivity between India and Thailand has never been stronger, with over 400 weekly flights linking multiple cities and continuing to grow.^[67] Both nations recently agreed to gradually increase the available seat capacity in two phases, each adding 7,000 seats. This expansion is expected to create new business opportunities, boost tourism, and foster deeper cultural exchange. The Thai government and Thai Airways have launched targeted campaigns for Indian honeymooners, families, and corporate groups, with plans to expand services, including flights from the upcoming Noida International Airport in New Delhi, which will also improve access to the Taj Mahal. Business and incentive travel is another growing segment, supported by Thai subsidies and joint ventures with Indian corporates.

In 2023, Indian tourists were the fourth-largest group visiting Thailand—after those from Malaysia, China, and South Korea—with approximately 1.62 million visitors. By contrast, around 0.11 million Thai tourists visited India in 2023. Major airlines from both countries, including Air India, Thai Airways, Thai AirAsia and IndiGo, operate direct flights between the two countries.^[68] In 2024, arrivals from India reached 2.1 million, nearly 30 percent higher than 2023. And surpassing the pre-pandemic peak of just under 2 million.

A major factor behind the surge in Indian tourists is Thailand's visa-free policy. In November 2023, Thailand introduced a visa waiver programme, which was later extended in May to continue until November. Following that, the government announced that Indian visitors would continue to benefit from visa-free entry “until further notice”.^[69]

Since 2016, both governments have sought to develop the Buddhist Circuit, a network of important pilgrimage sites in India and Nepal.^[70] Millions of Thai Buddhists travel to key destinations in India, such as Lumbini, Bodh Gaya, Sarnath, and Kushinagar, for religious purposes. To ease travel, the Indian government introduced double-entry e-tourist visas for Thai citizens. Furthermore, there was an expectation that Thai companies would invest in developing the Buddhist Circuit and build luxury hotels to cater to a broader range of tourists. While the COVID-19 pandemic slowed progress, the reopening of air travel has revived hopes for the initiative. The air travel bubble scheme, endorsed by Thailand's Prime Minister to encourage Indian tourists despite flight suspensions, also proved to be effective.^[71]

Himalayan tourism continues to be a profitable destination, renowned for its stunning landscapes, snowfall, and skiing opportunities, and should be promoted widely. While India aims to boost tourism from Thailand to its Northeast, Thai travellers also show interest in exploring other parts of the country, particularly South India, with which they share ancient cultural connections through the Cholas. Temples in Thailand and South India share many similarities.^[72]

These measures are set to foster more bilateral tourism between India and Thailand, with increased visitors and enhanced tourism activities.

Challenges and Opportunities in Bilateral Engagement

While India and Thailand have made notable strides in deepening their economic partnership, several structural, regulatory, and logistical challenges continue to constrain the full potential of their engagement. At the same time, emerging opportunities across trade, investment, and tourism present a strong case for renewed cooperation to overcome these barriers and unlock growth. 

Challenges

Barriers in Trade: India’s trade with Thailand continues to face structural and regulatory challenges. India has consistently recorded a trade deficit, which widened from US$2.66 billion in 2015 to over US$7 billion by 2023. This imbalance reflects the composition of the trade basket: India primarily exports lower-value intermediate goods and raw materials, while importing higher-value finished and semi-finished products such as electronics, automotive components, and petrochemicals. Thailand’s mature manufacturing base, integration into regional supply chains, and preferential access through agreements such as the Regional Comprehensive Economic Partnership (RCEP) signed in November 2020 have strengthened its competitiveness in the Indian market. Conversely, India’s absence from RCEP and the lack of a comprehensive bilateral trade agreement have placed its exports at a disadvantage.

Non-tariff barriers (NTBs) in Thailand continue to hinder India’s export performance. Agricultural products such as black tea face quotas, while certain marine items are banned and shrimp is subject to stringent health inspections. In pharmaceuticals, Thailand mandates costly and lengthy local bioequivalence studies and additional approvals despite international certifications, delaying market entry for Indian generics. Automobiles and components are subject to duplicative testing and certification requirements, even when they comply with United Nations standards. Indian electrical and engineering products also face recognition issues with their certifications, raising costs and reducing competitiveness. These NTBs increase transaction costs and deter small and medium-sized Indian exporters from effectively accessing the Thai market.

India’s export profile to Thailand constrains growth. Exports, valued at US$5.04 billion in FY24, are broad but concentrated in gems and jewellery, automotive parts, chemicals, pharmaceuticals, and agricultural goods. Growth has remained sluggish, averaging just 1.78 percent annually between 2018 and 2023, owing to stiff competition, tariff disadvantages, and NTBs. India continues to rely on intermediate and commodity-grade exports rather than higher-value, branded goods, limiting returns. A sharper focus on pharmaceuticals, speciality chemicals, and textiles could help diversify trade and improve India’s export profile.

Imports from Thailand exceed US$10 billion and are dominated by high-value manufactured goods such as electronics, automotive parts, petrochemicals, plastics, palm oil, rubber, and precious metals. This pattern reflects complementarities between the two economies, with Thailand supplying capital-intensive goods that India does not yet fully produce. While the trade deficit highlights India’s weaker manufacturing base, initiatives such as the PLI scheme are expected to strengthen domestic capacity and gradually help rebalance trade.

Issues in Investment: Investing in India poses challenges, largely due to policy diversity across states, which creates confusion for investors from Thailand and other Southeast Asian countries. Varying regulations, tax structures, and business requirements complicate decisions and create a fragmented business landscape. High inflation has also weighed on the economy, with volatile food prices limiting monetary policy effectiveness and driving the rupee’s consistent depreciation against the US dollars. For foreign investors, this is important because India’s inflation, particularly in comparison to the US, has led to a gradual weakening of the rupee, resulting in reduced returns when investments are converted back into US dollar. Additionally, bureaucratic inefficiencies, poor infrastructure, and complex regulations further deter investment.^[73]

In Thailand, investors also face challenges, with endemic corruption remaining a major barrier to foreign investment.^[74] Despite reforms such as the establishment of the National Anti-Corruption Commission (NACC) and the Anti-Corruption Act of 2018, corruption persists. The nexus between business and politics allows powerful groups to influence state policies and contracts. Bribery and conflicts of interest in public procurement and investment approvals impact fairness and transparency. Corruption investigations are lengthy and often take longer than investment arbitrations, making enforcement of awards complicated.^[75]

Indian investors also face significant hurdles when investing in Thailand, stemming from information gaps on policy guidelines, sector-specific opportunities, and reliable local partners. Foreign investors are limited to owning a maximum of 49 percent of a Thai company, with the remaining 51 percent required to be owned by Thai nationals. Applying for BOI promotions to gain tax and operational benefits can be complex, while obtaining work permits for foreign business owners and employees is difficult and subject to strict regulations. Thai law also requires companies to have a minimum of three shareholders, with at least two being Thai nationals, further complicating foreign ownership.^[76] Finding trustworthy collaborators can be daunting, potentially hindering cross-border investment flow and collaboration. To address these issues, greater transparency, improved information sharing, and strengthened networks of trustworthy business partners would be crucial for fostering smoother bilateral engagements.^[77]

While overall bilateral investment remains low, travel and tourism have seen the most rapid expansion, with phenomenal growth in Indian tourist inflows to Thailand.

A Prerequisite for Connectivity: Myanmar plays a crucial role in linking India and Thailand, as much of the India–Myanmar–Thailand Trilateral Highway (IMT-TH) runs through its territory and provides the only land connection between the two countries. The corridor’s successful completion and operation depend on Myanmar achieving sufficient political, economic, and social stability to enable safe and seamless movement of goods and people. Without such stability, the full potential of the IMT-TH as a key route for trade, tourism, and regional integration will remain unrealised.

A functional IMT-TH holds promise for all three countries by reducing transportation costs, enhancing trade, and enabling greater cross-border investment. It also holds vast tourism potential, opening culturally rich and scenic routes between South and Southeast Asia. Yet ongoing instability in Myanmar continues to delay progress and raises uncertainty over completion.

Connectivity projects in conflict zones often become overly securitised, restricting the free movement of goods and people and deterring both investors and tourists.^[78] Even when completed, such projects may fail to develop into vibrant economic corridors if instability persists. For the IMT-TH to fulfil its promise of growth, employment, and tourism, Myanmar must overcome its internal challenges and create an environment of confidence for all stakeholders.

India and Thailand, as key stakeholders, have begun engaging Myanmar to mitigate these risks. Thailand has opened a humanitarian corridor and maintained regular dialogue as a neighbour, while India is engaging with stakeholders to build mechanisms that safeguard ongoing projects and sustain its relationship with Myanmar. Together, these efforts can help create the conditions needed for the IMT-TH to become a thriving economic and tourism link in the region.

Roadblocks in Tourism: Despite the growing flow of tourists between India and Thailand, several challenges continue to limit the full potential of bilateral tourism. Limited direct flights beyond major cities and weak infrastructure remain key constraints. For example, while Bangkok and Phuket are well-connected to Delhi and Mumbai, there are few direct links from Tier-2 Indian cities like Lucknow, Jaipur, and Kochi, restricting access for smaller markets. Awareness of Thailand’s diverse offerings—such as wellness and medical tourism beyond Bangkok—is also low, with many Indian travellers sticking to popular circuits. Seasonal demand swings, competition from other regional destinations, visa delays during peak periods for Thai travellers, and limited coordination between tourism boards and private operators further dampen growth. Addressing these gaps through improved connectivity, targeted promotion, and streamlined travel processes will be essential to realise the potential of India–Thailand tourism fully.

Opportunities

Bilateral Trade: There are numerous opportunities to enhance trade between India and Thailand. A key step would be upgrading existing agreements like the AITIGA and pursuing a Comprehensive Economic Cooperation Agreement (CECA). These could help reduce tariffs, expand coverage to services and investments, and streamline customs procedures, encouraging greater participation from small and medium-sized enterprises (SMEs).^[e]

The 13th India-Thailand Joint Trade Committee meeting, held in New Delhi on 20 April 2023, emphasised enhancing bilateral trade, addressing market access issues, and exploring collaboration in sectors such as marine products, smartphones, electric vehicles, and services like nursing and medical tourism. The meeting also reviewed progress on connecting India’s UPI with Thailand's PromptPay service and settling trade transactions in local currencies. These points were revisited during the sidelines of 6^th BIMSTEC Summit in April 2025.

High-potential sectors for expanding trade include digital technology, electronics, electric vehicles (EVs), pharmaceuticals, food processing, and marine products. Investment-led integration—such as the establishment of joint industrial parks, cross-border investments, and utilisation of the Double Taxation Avoidance Agreement (DTAA)—can further drive trade growth.

Improving physical connectivity through the India–Myanmar–Thailand Trilateral Highway, the proposed Motor Vehicles Agreement, enhanced maritime links via Ranong Port, and better digital connectivity would significantly reduce transaction and logistics costs.

Trade facilitation can be further improved by digitising customs processes, mutually recognising standards, and removing non-tariff barriers. Sector-specific cooperation in areas such as automotive manufacturing, textiles, agriculture, tourism, and startup ecosystems would also help diversify and rebalance the trade relationship.

Deeper engagement through regional and multilateral platforms such as BIMSTEC and the Indo-Pacific Economic Framework (IPEF) can further economic integration, strengthen resilience, and enable sustainable growth in bilateral trade. However, the tariff wars initiated by the Trump administration in 2025 have hindered progress on mega trade agreements that were initially envisioned in 2022.

Investment: India and Thailand have significant opportunities for bilateral investment, particularly in sectors aligned with their expanding economies. Several Thailand-based companies in India plan further investments in greenfield and brownfield projects across energy, infrastructure, and metals. The fast-growing Indian market remains attractive to Thai investors, who are already active in infrastructure, real estate, food processing, chemicals, and hospitality. Additionally, the Thai government has invited Indian companies to invest in Thailand, particularly in sectors such as software, agrochemicals, and electric vehicle development.^[79]

In November 2024, Prim Jitcharoongphorn, Chairwoman of the Thai-Indian Business Council, encouraged investors to focus on India’s north eastern region, which is experiencing a rapid surge in demand for upscale goods.^[80] While India has a broad market spanning premium and budget segments, its high-end consumer base of 300-400 million people offers strong purchasing power, particularly for luxury items such as jewellery, gemstones, diamonds, and branded goods. The northeastern region is being considered a key area for investment due to its proximity to Thailand—goods can be transported within two days—providing Thai businesses with a logistical advantage. The region’s population shares physical traits with Thais and has a strong preference for Thai products, further enhancing business prospects. Key sectors identified for investment include processed food, jewellery, and real estate.^[81]

Tourism: India and Thailand share rich cultural and historical ties that create strong opportunities to expand tourism linkages. The Northeast India Festival, held in Bangkok in 2019 and 2022, showcased India’s shared Tai heritage and cultural diversity, strengthening people-to-people connections and positioning India as an attractive destination for Thai tourists. Beyond the Northeast, India offers a wide range of experiences for Thai travellers, including spiritual journeys along the Buddhist circuit, wellness and Ayurveda retreats, luxury and wedding venues, and adventure tourism across the Himalayas and southern states. Vibrant festivals like Holi and Diwali, along with India’s bustling markets and diverse cuisine, also present strong selling points that can be promoted more effectively to Thai audiences.

Recent entrepreneurial exchanges have further underscored tourism’s potential. Initiatives in July 2023 and May 2024 brought young Indian entrepreneurs to Thailand to learn about its tourism management and innovation,^[82] fostering networks and showcasing best practices that could help India develop more visitor-friendly services and infrastructure. A Thai delegation’s visit to Assam in July 2025 reaffirmed mutual interest in cultural and tourism collaboration, particularly in leveraging the Northeast’s untapped potential.^[83] Together, these initiatives highlight how India can capitalise on cultural affinity, improved connectivity, and targeted promotion to attract more Thai visitors and integrate tourism into the broader economic partnership.

The Way Forward

As India and Thailand elevate their relationship to a strategic partnership, it is imperative to translate this political will into tangible outcomes across trade, connectivity, investment, and people-to-people linkages.

Strengthening Trade Frameworks: With India and Thailand elevating their partnership to a strategic level—both facing the impact of US tariffs on goods exports—it is evident that the two nations must expand their economic engagement. While tariff lines must be rationalised, non-tariff barriers, such as regulatory ones, must also be eased. A key issue for imports into India is the weak Rules of Origin clause in the AIFTA, which remains inconclusive, despite nine rounds of negotiations. As reported, the 10^th round will be held in mid-August 2025. There have been speculations that India may even terminate the agreement if ASEAN countries fail to revisit tariff lines to address trade distortions.

Ensuring Completion of Connectivity Projects: For connectivity projects like the IMT-TH to succeed, a people-centric approach is vital, placing border communities at the heart of planning and implementation. This ensures that projects address not only economic needs but also the social, cultural, and environmental concerns of the regions they traverse. Engaging local communities fosters ownership, helps preserve cultural heritage, mitigates environmental impacts, and promotes equitable distribution of benefits.

Building trust among border populations also reduces security risks, as insurgent groups often rely on local support. When communities experience tangible benefits from connectivity, they are more likely to safeguard the infrastructure and enable free movement, which is vital for economic growth.

Incorporating the aspirations of people in India’s Northeast, Myanmar, and Thailand will enhance the sustainability of the IMT-TH and transforms locals into active stakeholders. To truly empower these communities, it is important to complement road construction with investments in local manufacturing and industries that leverage regional strengths. This will create jobs, generate economic opportunities, and make the highway more relevant to those who live along it—ensuring that connectivity translates into meaningful, inclusive development.

Strengthening Ties via Investment: Attracting inward FDI from Thailand in key sectors, such as machinery and mechanical appliances, plastics, rubber products, chemicals, and precious stones, can help reduce India’s widening trade deficit. If Thai companies manufactured these goods within India, it would strengthen domestic production capacity and curb import dependence. This aligns with India's broader goals under initiatives like ‘Make in India’ and promotes self-reliance in critical sectors. Facilitating such investments would also position India as a more balanced trade partner, enabling a shift toward more equitable and mutually beneficial economic engagement with Thailand.

While steps have been taken in this direction, where Indorama Ventures has invested in India’s polyester and petrochemicals sectors, Srithai Superware operates plastic houseware manufacturing facilities, and Thai Summit Group has explored partnerships in the automotive components sector. However, large-scale manufacturing remains limited. The rubber industry is still formulating a PLI-linked incentive scheme for government consideration. Reducing India’s bilateral trade deficit via incentives-linked investment can create a win-win for both nations.

Another area for future collaboration is India’s struggling electric vehicle sector, which has been hit by delays in battery imports from China following Beijing’s tighter export rules on rare earths in April 2025.^[84] Encouraging Thai investments in auto components and EV-related manufacturing could help India diversify its supply chains and support its growing auto sector, which, as shown in Table 2 (d), saw increased investment in 2024.

Expanding Tourism Horizons: Tourism between India and Thailand can be further enhanced by promoting religious tourism, expanding adventure and recreational tourism, developing health and wellness tourism, and fostering educational exchange programmes. Moreover, various initiatives organised by the respective embassies, such as Namaste Thailand in India, Buddha-Purnima, and Ramayana concerts in Thailand, among others, must be held not only in the national capitals but also in other cities such as Bodhgaya, Ujjain and Jaipur. Strengthening connections with the Indian diaspora in Thailand can also play a vital role in promoting tourism and travel between the two countries.

Although the 2025-26 budget document announced several key initiatives for promoting tourism in India, other measures related to infrastructure, safety, and security for tourists are necessary before India’s cultural and economic revitalisation can translate into global tourism leadership.

Even as the number of Thai tourists visiting India remains low, India must actively market its tourism sites both through media outlets and travel companies. Thailand, meanwhile, aims to diversify its offerings for Indian travellers to include weddings, wellness, and medical tourism, while expanding airline routes to sustain this growing market. Greater engagement with Indian and Thai media to showcase success stories, highlight opportunities, and raise awareness of bilateral cooperation will be crucial for building public support and creating a more informed stakeholder environment.

However, with the World Bank’s lowered growth forecast for Thailand's GDP in 2025 at merely 1.8 percent, citing weaker economic conditions amid global uncertainties, momentum in economic relations may be impacted.^[85] Political instability and weak governance issues will also delay policy decisions. While the India–Thailand Strategic Partnership provides a clear framework for advancing economic ties, the pace and depth of progress will inevitably remain influenced by these domestic and external pressures. 

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Reena Marwah, Professor, Jesus and Mary College, University of Delhi.  

Sreeparna Banerjee, Associate Fellow, Strategic Studies Programme, Observer Research Foundation

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All views expressed in this publication are solely those of the authors, and do not represent the Observer Research Foundation, either in its entirety or its officials and personnel.

Endnotes

• International Affairs
• India
• Neighbourhood
• The Pacific, East and Southeast Asia
• ACMECS
• Act East Policy
• Act West policy
• ASEAN
• bilateral trade
• BIMSTEC
• cultural ties
• East Asia Summit
• economic engagement
• India-Thailand relations
• investment cooperation
• IORA
• MGC
• Southeast Asia partnership
• strategic partnership
• tourism collaboration

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