Thai food exports to India's middle class

Thailand's food exports to India will rise by 40 percent this year on strong demand in that country's upper and middle market segments, says Yuthasak Supasorn, director of the Office of Small and Medium Enterprises Promotion.

"Although I believe we will be able to raise food exports to India to a value of 10 billion baht this year, we are afraid of protective measures that are not in the form of taxes, but rather non-tariff barriers. They have many items on their sensitive list," said Mr. Yuthasak, according to the Bangkok Post.

The National Food Institute (NFI) said Thailand's food exports to India were worth 7.47 billion baht last year, while imports from India totalled 8.96 billion baht. "However, I remain confident that demand is there for Thai products. We'll penetrate the upper market by focusing on processed agricultural food," said Mr Yuthasak.

NFI executive vice-president Amorn Ngammongkolrat said that of India's population of 1.17 billion, high-income earners totalled 120 million and the middle income segment 300 million.

"This is a good opportunity for Thai products, as we're used to picturing India as having a large amount of poverty," said Dr. Amorn, adding that Thailand's total food exports should grow by 7 to 8 percent this year to about 800 billion baht.

Chackrit Duangphastra, director of the Trade Negotiations Department's Bureau of Asian Affairs, said Mumbai, India's most developed city, would be the main focus, with its high living standards. "This is in contrast to our usual idea that India is poverty ridden," said Dr Chackrit.

Thailand has had a free trade pact with India since 2004, with taxes eliminated on 82 items. However, 90 percent of these are industrial products like steel. "The number of food products remains low due to the similarity of these items in the two agricultural countries. But there are opportunities for processed food," said Dr Chackrit.

Apart from Thailand, Singapore is the only other country in Asean that has a free trade agreement with India. While Thai products account for 10.8 percent of India's imports, the figure for Singapore is 28.1 percent.