Thailand looks for its share in Indian retail sector

India’s burgeoning retail sector and government’s decision to open up overseas investment to augment further growth has made many economies, developed and developing,  to vie for their pie in the US$ 550 billion market. ASEAN member Thailand too is looking at various opportunities to invest in India. 

According Adul Chotinisakorn, executive director of the Thai Trade Center in Mumbai, Thai companies should invest in single-brand retail businesses and construction in India while sourcing raw materials for seafood and jewellery industries.

“As India recently approved 100% FDI in single-brand retail businesses, Thai operators such as the Black Canyon cafe{aac} chain and Naraya, the manufacturer and distributor of NaRaYa fabric bags and accessories, could reap full benefits from investing in India,” he says. However, New Delhi has not yet granted the same privilege to multi-brand retail businesses.

ASEAN and Indian markets are booming due to trade and investment potential. Apart from its sheer size of 1.2 billion people, the India market is an ideal sources of several raw materials.

For instance, southern India can supply squid for the Thai seafood industry while there are also abundant supplies of precious stones there. As well, Surat in the western Gujarat State is one of the world's diamond-cutting centres, Bangkok Post quoting Adul as saying.

The Indian government plans to invest $45 billion on infrastructure development over the next five years, opening up numerous opportunities for Thai construction companies to work in India. Currently, Italian-Thai Development Plc has presence in the country.

About 200 million Indians have high purchasing power and real estate developments are now popular in the country, creating opportunities for Thai developers. Pruksa Real Estate Development Plc has already entered the market.

But for Thai consumer products, the potential might not be as strong because low-income Indians tend to buy cheaper locally made goods. For instance, Thai instant noodle is priced at 26 rupees each, compared with five for local brands. Similarly, Thai fruit juice producers cannot compete with the giant multinational Tropicana which has a factory in India.

Thailand has set a target for 10% growth in exports to India to US$6.2 billion this year. Two-way trade was $8.19 billion last year, up 23.29% from 2010. Thai exports increased 17.93% to $5.18 billion while imports rose 33.73% to $3.01 billion in 2011.

Srirat Rastapana, director-general of Trade Negotiations Department, says talks on the bilateral free trade area agreement with India have reached common grounds on rules of origin and customs procedures were concluded.

Both sides agreed on the economic cooperation on creative economy, tourism, science and technology, infrastructure development and construction. They would also help each other in upgrading small and medium-sized enterprises and health care.