India’s trade with Thailand could touch US$ 7 billion by 2010-11, propelled by a doubling in transaction under a Free Trade Agreement (FTA). But there has been an alarming widening of the trade deficit, said the Federation of Indian Chambers of Commerce and Industry (FICCI) on June 22, 2007.

Currently, India’s total trade with Thailand stands at US$ 2.2 billion.

The FICCI estimates India’s exports to Thailand to grow at an annual rate of 20%, to reach $ 2.6 billion by 2010-11, if the FTA is fully implemented in the current fiscal year.

In its analysis on the India-Thailand FTA, the Chamber noted that the total trade of 82 items under the Early Harvest Scheme (EHS) of the FTA increased by over 140%, to around $ 358.63 million in 2005-06 from $ 149 million in 2003-04.

The EHS was implemented on September 1, 2004, under which tariffs on 82 items were to be phased out by September 1, 2006, by both sides.

The share of these 82 items in India-Thailand trade increased from 10.34% in 2003-04 to 15.68% in 2005-06, said the FICCI.

This, however, has been accompanied by a widening trade deficit for India in these 82 items, the Chamber added.

It said India’s exports of 82 EHS items to Thailand under the FTA have risen from $ 64.28 million (2003-04) to $ 83.03 million (2005-06) only. Its import of these items, however, surged to $ 275 million from $ 84.64 million, in the same period.

Thailand’s Prime Minister Surayud Chulanont, who is visiting India on June 26, 2007, is expected to push for an early conclusion of the FTA between India and Thailand. A bilateral agreement on non-conventional energy and another on cultural exchanges are among the agreements to be signed during the visit.

June 26, 2007