India’s trade with ASEAN nations has expanded at a compounded annual growth rate (CAGR) of 5% over the past decade. However, this growth has been uneven. Imports have nearly doubled, while exports have seen only modest gains. Thailand has emerged as India’s fourth largest trading partner within ASEAN, yet it ranks second in terms of trade deficit. The deficit has widened five-fold, driven by a 9% CAGR in imports compared to just 3% in exports. India maintains moderate import dependency on Thailand. However, the same is not critical due to India’s ability to diversify sourcing across ASEAN and other regions for most of the categories. 

On the investment front, Thailand has become the leading ASEAN source of Foreign Direct Investment (FDI) into India, with growing contributions in infrastructure, real estate, agro-processing, electronics, automotive, hospitality, and renewable energy sectors. Additionally, Indian tourists ranked third among international visitors to Thailand in 2024, strengthening the services trade.

Exhibit: India’s trade with ASEAN countries

Source: Ministry of Commerce and Industry; ICRA Research