Indian parts firms eye FTA potential
28 February 2011
Indian auto-parts makers and renewable-energy firms are looking to Thailand as an investment hub for Southeast Asia because of the privileges offered under the Asean-India free-trade agreement, says India’s largest industrial group.
Bhaskar Sarkar, executive director and secretary of EEPC India, said Thailand was the most attractive Asean destination and investors want to capitalise on the upcoming Asean Economic Community single market in 2015.
"Thailand has several basic elements the industry depends on, including infrastructure such as roads and ports, electricity supply, as well as a skilled labour force," Mr Sarkar said during a recent visit to Bangkok. "If we invest now, companies will be ready for Asean integration in 2015 with zero tariffs."
Formerly known as the Engineering Export Promotion Council, the EEPC has 13,000 corporate members and is the largest group of its kind in terms of membership. The organisation, which is sponsored by India’s Ministry of Commerce and Industry, is aiming for export value of US$51 billion in this fiscal year ending March 31.
Asean is the No. 3 export market for engineering products from India after the US and Europe, but it has the highest growth rate every year, Mr Sarkar noted.
The Asean-India FTA was signed in 2009 and covers more than 90% of goods traded between the two sides. The bilateral Thailand-India FTA also took effect but only 82 agricultural products are listed in the early harvest regime.
About 1,800 companies in the EEPC are related to automotive parts, with the rest in electrical, energy, casting, and machine tools.
"With large automotive companies already operating in Thailand, we see huge opportunities for the replacement-parts market in Thailand," Mr Sarkar said.
India’s leading auto manufacturer Tata already has a presence in Thailand and plans to introduce more products here including a so-called eco-car, he added.
The EEPC will organise a group of 150 members to attend the Manufacturing Expo 2011 in Bangkok from June 23-26. The event is expected to attract 40,000 visitors from Asean and generate 5 billion baht in transactions.
Mr Sarkar said he also recommended the Board of Investment, the Commerce Ministry and the Federation of Thai Industries organise a trip for a business delegation to India.
"This will help promote a more sustainable bilateral trade relationship between the two countries," he said.