By Our Special Correspondent
Shillong: Trade relationship between Thailand and Assam, two important and integral regions in India’s Look East Policy and Thailand’s Look West Policy is hitting rough weather.
Assam had been identified by Thailand as an important destination for investment, a potential sub-regional market centre and a land-bridge connecting Thailand with the vast mainstream Indian market. The economic logic of investment has been further facilitated by cultural similarities, historical ties and geographical contiguity.
Moreover, on May 28, 2012, Prime Minister of India Dr Manmohan Singh and Myanmar’s President U Thein Sein signed an agreement where India has agreed to upgrade an extensive network of roads and bridges in Myanmar that would effectively connect Northeast India (and the rest of India) to Thailand by 2016. Both sides are also exploring the possibilities of setting up train routes through the country.
However, after the initial euphoria, trade and business between these two regions is facing severe stress and is on the verge of breakdown of age old relationship mainly due to lack of interest on the part of Thai Trade Centre in New Delhi.
The imperatives for Thailand’s investment in Assam have come from two important considerations, reflecting long term strategic objectives of the Look West Policy of Thailand. First, Assam offers a substantial alternate market and transit for sub-regional economies in the Bay of Bengal for the export-driven economy of Thailand. Second, the investment in Assam would enable the Thai companies to further diversify the sources of raw materials especially natural resources such as rubber and bamboo, which constitute Thailand’s important international exports.
A source in Thailand informed that Department of International Trade Promotion (DITP), a nodal agency under Ministry of Commerce, Royal Thai Government is misled while formulating policies for Assam. The source rued that Thai Trade Centre in New Delhi failed in properly educating DITP about Assam’s importance in Thailand’s Look West Policy.
The year 2004 marked an important watershed in the history of India’s Northeast of which Assam is the most important state for three reasons. First, the Indian Prime Minister, Manmohan Singh, first time referred to Assam as the ‘ Gate to the East’ in November 2004. This, in turn, brought the Northeast into the ambit of the LEP as a launching pad for India’s political and economic engagement with the ASEAN region. Second, India-ASEAN Car Rally, which was flagged off from Guwahati in Assam in 2004, brought home both the viability and urgency of developing physical connectivity between the Northeast and Southeast Asia for India’s economic integration with ASEAN.
Finally, the first visit of any Thai delegation to the region took place in 2004 to take part in Trade Fair. However, Thai officials have failed to make any headway. Another important strategy of the Thai companies, while investing in foreign countries is the ‘competitive advantage’ approach, which primarily implies that the companies ‘prefer to operate in their areas of dominance’.
Till now, Thailand was fortunate to enjoy dominance in Assam but the scenario is fast changing with the Indian Government initiative to allow FDI in retail market.
The setting up of Bharti Walmart in Guwahati has been agreed in principle. Shillong will be the second stop. Walmart which is famous for low priced Chinese products is all set to end the dominance of Thai products in the Northeast.
Under the circumstances, many in Assam feel that Department of International Trade Promotion (DITP) should play a more proactive role in developing and nurturing relationship between Assam and Thailand otherwise the relationship between these two very important business partners will take a nosedive.