Thailand looks set to boost shipments of agricultural products to India, in particular rubber to supply the latter's strong automotive industry.
Commerce Minister Jurin Laksanawisit, who led a delegation to Mumbai and Chennai this week, said the Commerce Ministry will hold discussions later with Indian counterparts to boost rubber trade between the two countries and tackle existing trade obstacles, especially tariffs.
Mr Jurin presided over a seminar and business networking event on Friday between Thai and Indian rubber players co-hosted by the International Trade Promotion Department, the All India Rubber Industries Association and the Automotive Tyre Manufacturing Association.
V T Chandhrasekharan, president of the rubber association, said Indian rubber demand averages 1.2 million tonnes a year, while the import volume was more than 500,000 tonnes this year, only 10% of which was from Thailand.
India's biggest import volume was from Indonesia, comprising 42% of total imports, followed by Vietnam at 20% and Malaysia at 11%.
Mr Chandhrasekharan said India is keen to raise imports of rubber block and latex from Thailand if Thai distribution agents are set up in India.
P Vijayaraghavan, director of the tyre association, said relatively high import tariffs make Thai rubber products less competitive in India.
India's import tariffs are as high as 40% for natural rubber from Thailand, and rubber products are charged about 25%. Similar products from other countries have been given import tariff preferences.
The Indian tyre market was worth US$8 billion last year, and export volume topped $1.6 billion.
Since 2004, Thailand and India have implemented the Early Harvest Scheme, under which tariffs are waived on 83 items such as fruits and vegetables, jewellery, and automotive products. Natural rubber and rubber products are not yet included in the scheme.
Nikorn Likhitwangphanit, president of the Thai Hevea Wood Association, said India is a promising market with high growth for property businesses and a government plan to build smart cities in more than 100 locations worth a combined $100 billion.
In a related development, Thai Hua Rubber Plc signed a memorandum of understanding to sell a combined 100,000 tonnes worth 7.5 billion baht to Indian importers. Of the total, 50,000 tonnes worth 3.75 billion baht goes to Helar Marketing and Consultants Private Ltd and the rest to Apollo Tyres Ltd.
Last year, two-way trade between Thailand and India amounted to $12.5 billion, up 20.5%. Thai exports made up $7.62 billion, a gain of 17.8% from 2017, with imports up 24.9% to $4.86 billion.
This year the Commerce Ministry aims for exports to India to grow by 8%.