Business Summit in honour of H.E. General Surayud Chulanont, Prime Minister of Thailand
June 26, 2007, New Delhi

Your Excellency Mr. Kamal Nath,
Minister for Commerce and Industry of India,
Distinguished Leaders and Members of the Confederation of Indian Industry (CII), the Federation of Indian Chambers of Commerce and Industry (FICCI), and the Association of Chambers of Commerce and
Industry of India (ASSOCHAM),

Ladies and Gentlemen,

It is my great pleasure and honour to be here among prominent members of the Indian business community as well as the Thai private sector to address this Business Summit. I very much appreciate the efforts of the Indian business community in organizing this useful forum for interaction and dialogue between the two countries. public and private sectors.

On behalf of the Royal Thai Government, I also wish to take this opportunity to express my warmest congratulations and best wishes to the Government and the people of India on the occasion of the 60th Anniversary of India's independence. We recall with deep reverence the philosophy of non-violence of Mahatma Gandhi which led India to freedom and to the forefront of the world stage, and which continues to inspire people the world over .

As most of you know, a key reason for my visit to India is to join in the celebration of another 60th Anniversary, that of the establishment of diplomatic relations between Thailand and India. Our two countries have long enjoyed close and cordial ties. Similarities and linkages in religion, language and culture between our two civilizations have deepened our interaction and mutual understanding. Many people of Indian origin and Non-Resident Indians (NRIs) have played a prominent role in Thailand's economic and social life. Today, relations and contacts between our peoples have grown steadily and have evolved into a multi-dimensional relationship which also involves frequent exchanges at the highest level.

Thailand regards India as one of our most important strategic partners. Our cooperation has developed in both bilateral and multilateral fora in all sectors, including trade, investment, security, transport, science and technology, energy, technical cooperation and culture. Our growing partnership is the outcome of the synergy between India's "Look East" Policy and Thailand's "Look West" Policy. These two policies complement one another in making our relations the vibrant and dynamic partnership we are witnessing today.

In the regional context, our partnership has also been strengthened through frameworks such as the ASEAN-India Dialogue, BIMSTEC, Mekong-Ganga Cooperation (MGC), Asia Cooperation Dialogue (ACD), ARF and the East Asia Summit. Thailand appreciates very much India's active participation and constructive role in all these initiatives. Indeed, I have been informed that the recently concluded ACD Meeting in Seoul agreed to promote IT development among member countries to overcome the digital divide in Asia, a process in which I am sure India will play a major role.

Such are the broad strokes of our relations. What lies ahead will depend on the efforts of all of us to fill in this large canvas and provide the highlights to make our partnership a masterpiece which stands out and which endures.

Distinguished Guests,
Ladies and Gentlemen,

Let me now share with you some insights on what the future holds for Thai-India cooperation.

We in Thailand see in India a key engine of the rising Asian economy. We see in India a dynamic force for enhanced economic interaction within Asia and indeed globally. We see in India a vast reservoir of skilled personnel and entrepreneurs to help drive a knowledge-based Asia. And we are convinced that the interaction of these assets with the dynamism of other growth areas in Asia, from China and Japan to ASEAN, can help ensure the peaceful rise of Asia as a key player in the global economy.

We continue to applaud the major economic reforms which have created conditions for the tremendous growth of the Indian economy. Today, India is without a doubt the "fastest growing free market democracy" in the world, and we have no doubt that your growth will continue to benefit the region. Indeed, it is no coincidence that our two countries share a similar vision for the region. India has put forward the vision of the Asian Economic Community and the Pan-Asia Free Trade Area. Meanwhile, Thailand is advancing an enhanced interaction between an emerging ASEAN Community and its Dialogue Partners, as manifested in the idea of an East Asia Community and the East Asia Summit, as well as the Asia Cooperation Dialogue or ACD. So, we both share bold ambitions for our continent.

To advance our common ambitions, I am also pleased to note that our two countries are on track to conclude a Free Trade Agreement in the near future, with a view to establishing the FTA covering trade in goods by 2010. Upon the achievement of this goal, long-term mutual benefits in trade and investment could be realized and our partnership expanded further to cover technology know-how and expertise.

India today has become a dynamic market place and investment destination, meaning bright prospects for our bilateral trade and investment. Today, India has become Thailand's new major market, our largest trading partner in South Asia and 16th largest export market. Since the elimination of tariffs on 82 products under the Early Harvest Scheme for our FTA in 2004, bilateral trade has recorded remarkable growth. Total two-way trade in 2006 rose to around 3.4 billion US dollars, with 1.3 billion US dollars already recorded during the first four months of this year. The agreed target of 4 billion US dollars by 2007 appears highly likely to be achieved.

On investments, Thailand now accounts for around 830 million US dollars of approved foreign direct investment in India, ranking 18th in India's total FDI. Top investment sectors include food processing, hotel and tourism, construction and electrical equipment, telecommunications, trading and transportation. India's FDI in Thailand has also risen, with the first quarter of 2007 seeing an increase of 110 percent over the same period last year.

From these facts and figures, India has every opportunity to become Thailand's major market for trade and investment. I therefore wish to thank the Indian Government and private sector for welcoming and supporting Thai investors. On our part we welcome with open arms Indian investment, particularly in areas in which India has expertise, such as information technology and pharmaceuticals.

Last week, my Minister of Commerce led a group of Thai business leaders to the Northeastern States of India at the invitation of the States' leaders. I am glad to hear that the trip met with success in opening up new business opportunities in various sectors. And immediately following my visit, from 28 June -4 July, my Deputy Foreign Minister will lead a group of prominent Thai investors on a roadshow to major Indian cities to look into new business opportunities upon the coming into effect of the India-Thailand FTA. May I therefore take this opportunity to announce the launching of the India-Thailand FTA Roadshow. I do hope our business people will fully utilize this Roadshow to further strengthen our partnership.

Distinguished Guests,
Ladies and Gentlemen,

I have spoken at length about the great potential that Thailand sees in India and how we can further advance our partnership. Nevertheless, a number of you may have concerns about the direction of Thailand's politics and economy. Let me therefore take this opportunity to briefly touch upon a few key points.

First, Thailand's return to full democracy is definitely on track. There is no backtracking. The Royal Thai Government and all relevant institutions are proceeding at full speed to reestablish parliamentary democracy in accordance with the people's wishes. The new draft constitution is undergoing comments and correction, following which it will be submitted to a national referendum by September. We are working hard to ensure that general elections are held by year's end, if not sooner. Everything will be in accordance with the rule of law.

Second, the Government is guiding the economy towards sustainable growth. Our pursuit of growth is based on the key principles of transparency, justice, efficiency and the sustainable use of resources. In 2007 our efforts are geared towards expansion of business opportunities and heightened productivity. We will continue to lay down the crucial foundation for Thailand's long term competitiveness by continuing to develop the quality of our human capital, physical capital and technology, particularly where SMEs are concerned. Meanwhile, the philosophy of Sufficiency Economy will ensure that our communities and enterprises possess self-immunity to face future challenges.

Thailand remains fully committed to an open-market economy that is fully integrated into the global economy. We will continue to take steps to further liberalize our economy while at the same time improve conditions for foreign trade and investment. We very much look forward to concluding regional FTAs in the frameworks of ASEAN and BIMSTEC which will benefit the regional economy as a whole, and to concluding mutually beneficial agreements such as the bilateral FTA with India which will further energize our trade and investment. And on this point, I wish to emphasize that the economic measures introduced by the current Government, such as proposed amendments to the Foreign Business Act, are to be regarded as part of our attempt to promote transparency and a level playing field.

Let me also assure you that Thailand's economic outlook remains positive. The Thai Baht is now relatively stable, and confidence within the business community continues to pick up. A current account surplus of over 8 billion US dollars is projected this year. In the first quarter of 2007 the Thai economy grew by 4.3 percent as a result of strong exports, which grew by a record 20.86 percent last month, as well as expansionary fiscal and monetary policies. We are confident that for the whole of 2007 a GDP growth of 4.0 - 4.5 percent can be maintained.

Investment is expected to increase due to falling interest rates and increasing public investment. In the first quarter of 2007, we have already noted a 75 percent increase in the number of investment promotion applications. Meanwhile, new investment opportunities are being promoted in several high potential and priority sectors such as infrastructure, automotive industry, energy and electronics. With 600,000 vehicles being exported from Thai factories this year, we are continuing to build on this strong performance by promoting the production of small fuel-efficient automobiles or Eco-cars. Meanwhile, 6 billion US dollars is already lined up for investment in mass rapid transit projects.

All this points to bright prospects for the Thai economy. Let me assure you we will look after the business environment and ensure that Thailand continues to move ahead in cooperation with the Indian private sector and other partners.

Distinguished Guests,
Ladies and Gentlemen,

In this age of globalization where nations and businesses constantly search for new opportunities, I believe that Thailand and India already possess the necessary resources to make use of our untapped opportunities. But to fully realize our potentials, we need to do more to synergize our bilateral and regional cooperation. We need to do more to strengthen our partnership and maximize our comparative advantages. For both governments, this means further strengthening our economic partnership, deepening our linkages, minimizing barriers and maximizing access for our products and capital. This my Government commits itself to doing.

The private sector also needs to do its part. And this is why we are gathered here today. This Business Summit provides a forum to strengthen and expand linkages among and between our public and private sectors, which is essential to the realization of our full potential. On this occasion, I wish to invite distinguished members of the Indian private sector to strengthen the partnership with their Thai counterparts.

As the 21st Century begins, and as Asian nations rise to take their proper place at the table of global affairs, I salute the current vibrant state of Thai-India relations and all of you who have contributed to our progress. Let us move together now to further deepen and expand our relations for the mutual benefit of our two peoples.

Thank you for your attention.