India, Thailand lift ties to new heights despite minor hiccups

Thailand is proactively burnishing its image as a tourist-friendly destination despite the ongoing political and economic challenges.

This month, the Southeast Asian nation extended its no-visa fee policy from 57 to 93 countries, allowing tourists to stay up to 60 days, effective from 15 July.

To be sure, Thailand had in May extended a six-month-old visa exemption program for Indians until 11 November.

Citing data from Thailand’s tourism and sports ministry, Thai Prime Minister Srettha Thavisin last week said tourist arrivals between January and 25 July jumped 34% from last year, totaling 20 million, with the largest groups coming from China (3.9 million), Malaysia (2.8 million), and India (1.2 million).

“This is not luck, but thanks to everyone, every sector, who has worked hard, such as opening more visas, increasing flights, expanding aviation hubs, developing tourist attractions,” Thavisin said last week in a post on X.

The government has set an ambitious target of 3.5 trillion baht from tourism revenue this year, but the country has until July managed to garner about 858 billion baht, less than a quarter of the goal.

In addition to tourists, the country also rolled out a new five-year visa, which allows freelancers and remote workers to stay and work out of the country for up to 180 days each year.

Hiccups in bilateral ties

While Thailand has been effectively enhancing its tourism policies, it has not been immune to occasional diplomatic tensions that pose challenges to its international relationships.

Earlier this year, comments by the Thai ambassador to the World Trade Organization (WTO) at a conference in the United Arab Emirates criticizing India’s rice procurement strategy caused friction with New Delhi, prompting Thailand to replace the ambassador swiftly to ease tensions.

Professor Rakesh Mohan Joshi, director at the Bengaluru-based Indian Institute of Plantation Management, said the Thai envoy’s criticism was ‘uncalled for,’ arguing that India, with its large population of 1.42 billion, must take proactive steps for food security.

In an exclusive interview to Press Insider following the incident, Indian ambassador to Thailand Nagesh Singh had highlighted “the grace and swiftness” with which the Thai government had moved to restore diplomatic trust following the controversy.

“The former Thailand ambassador to WTO questioned our public distribution system (PDS), not just our rice export policy. But when we asked the government of Thailand if this was its official position, they showed grace and swiftness, and cleared that it was not the government’s position and immediately recalled their diplomat,” Singh said.

Since the resolution of this incident, bilateral ties have strengthened.

On the mend

India’s ‘Act East’ Policy, now in its 10th year, aligns with Thailand’s ‘Act West’ Policy. Being maritime neighbors, both countries have seen ties strengthen through interactions between top officials.

The visit of Thai foreign minister Maris Sangiampongsa to India in July underscored collaborative initiatives across sectors, enhancing the strategic partnership between both countries.

The involvement of Thailand and India in regional groups such as ASEAN, the East Asia Summit, BIMSTEC, the Mekong Ganga Cooperation, and the Indian Ocean Rim Association significantly strengthens their bilateral relationship.

The cultural connect between both the nations has also contributed to this improvement in relations.

Earlier this year, a 26-day exposition of the relics of Buddha and his disciples, Sariputra and Maudgalyayana, generated tremendous goodwill towards India in Thailand, ambassador Singh said.

Treated as ‘state guests’, the relics were transported by a special Indian Air Force aircraft on 22 February, at Bangkok’s request, to mark King Maha Vajiralongkorn’s 72nd birthday. The relics returned home on 19 March, while Thailand celebrated the king’s birthday this Sunday, 28 July.

Business and trade

Both countries have set a target of achieving $35 billion trade by 2027-28, driven by sectors such as manufacturing, commerce, and logistics.

Bilateral trade currently stands at $15-16 billion, with India exporting $5.60 billion and importing $9.40 billion worth of goods from Thailand last year.

Efforts to balance trade include promoting Indian exports in sectors such as gems, jewelry, and electronics, and enhancing trade facilitation under existing agreements.

Thailand is also expanding its electronics and automobile manufacturing sectors to strengthen its economy.

Professor Reena Marwah, author of “Reimagining India-Thailand Relations” and a faculty member at Jesus and Mary College, University of Delhi, said, “Thailand sees itself as a manufacturing, commerce, and logistics hub in Southeast Asia, with India as a key partner.”

“India, on the other hand, clocked an 8.4% growth in Q3 of FY24. Continuing at this rate, India could become a $5 trillion economy well before 2030. Thailand recognizes India’s role as an economic powerhouse with a skilled workforce, crucial for accelerating regional development,” Marwah said. India grew at 7.8% in the April-to-March quarter of the previous fiscal.

Indian conglomerates such as Tata Group and Aditya Birla Group, alongside Thai companies like Charoen Pokphand Group and Thai Summit, underscore the active corporate exchange between the two nations.

Vijay Kalantri, president of the All India Association of Industries, highlighted the growth in bilateral trade, which has increased by 42% over three years.

To reach the ambitious $35 billion trade target, Kalantri suggested harmonizing quality standards to reduce non-tariff barriers and reviewing free trade agreements to expand market access in complementary sectors.

He also called for increased utilization of the India-ASEAN Free Trade Agreement, advocating for simplified compliance procedures and mutual recognition of trade certifications to ease business operations and promote balanced trade.

The bilateral relationship extends beyond trade to include defense, culture, and technological cooperation, largely supported by India’s Act East Policy and Thailand’s Act West Policy, he added.

Domestic Thai politics

Thailand’s efforts to boost tourism also come against the backdrop of a weakening currency, declining stock prices, and increasing capital outflows amid a brewing political crisis.

This year, foreign investors withdrew over $3 billion from local markets amid signs of political turmoil, sending the Thai benchmark index SET to a near four-year low and making it one of the worst performers of all global bourses, Bloomberg reported this week.

On 14 August, Thailand’s constitutional court will rule whether PM Thavisin is guilty of an alleged ethical violation and should be sacked.

Senators accused Thavisin of an ethical violation after he appointed Pichit Chuenban, a former lawyer who represented ex-prime minister Thaksin Shinawatra’s family, to his cabinet in April.

Convicted in 2008 and given a six-month jail sentence for attempting to bribe court officials while arguing for Shinawatra, Chuenban was claimed not qualified by the senators.

Chuenban quit the cabinet in May, claiming the charges were politically motivated.

Thavisin had come to power exactly a year ago by allying with pro-royalist and military-backed parties. A court verdict removing him from office could lead to a scramble among allies to pick a new prime minister.

Early next month, the court is also scheduled to give its verdict on disbanding the Move Forward party, Thailand’s largest opposition, over a campaign to amend the royal defamation law.

The Move Forward party became the single largest party following last year’s polls, but Thavisin’s Pheu Thai party and other conservative parties cobbled together a coalition government.

Despite occasional strains such as those seen at the WTO ministerial in the UAE and domestic political tumult, India and Thailand have sought to bring their relationship back on track. They continue to make progress through constant engagement both bilaterally and at international forums.

A shared commitment to long-term regional stability and prosperity continues to drive their partnership, underscoring the resilience and forward momentum of their bilateral relations.

This is part of a series exploring India’s ties with Southeast Asian nations.