Thailand Investment Opportunities Outflow to India: Has Japanese FDI Played a Role?

Transcription

1 Thailand Investment Opportunities Outflow to India: Has Japanese FDI Played a Role? Wanida Wadeecharoen *1, Rungsun Lertnaisat *2, Pard Teekasap *3, Bandit Aroman #4, Somchai Lertpiromsuk %5, Sombat * Faculty of Business Administration, Thai-Nichi Institute of Technology 1771/1 Pattanakarn Rd, Suanluang, Bangkok, Thailand 1 wanida@tni.ac.th 2 rungsun@tni.ac.th 3 Pard@tni.ac.th # India Studies Program, Pridi Banomyong International College, Thammasat University 2 Prachan Road, Pranakorn, Bangkok Thailand 4bandit_1628@hotmail.com % Faculty of Accountancy, Thonburi University 248 Phetkasem 110 Nong Khang Phlu Nong Khaem, Bangkok Faculty of Engineering, Eastern Asia University, Phatumtanee, Thailand 200 Rangsit - Nakhon Nayok Road, Thanyaburi 6sombat.teekasap@gmail.com Abstract Thailand start outsourcing and looking for international investment opportunity into new market with lower labour cost. India represent one of the dominant country whereby cheap labour available, over 500 population structure are below 25 years old and largest demand of motor vehicles, vehicles parts and electronics part. This condition make India absorbed FDI inflows including equity investment inflows worthy $ billion in India was ranked as the top 14 th largest economic inflows in the world worthy $28 billion. Thailand already ranks as India s 35 th largest FDI equity inflows from April 2000-February, 2015 worthy $ billion. Leading Thai companies in the fields of automotive and engineering have active and growing business presence in India. The major commodity export from Thailand to India are Chemical, Plastic, combustion engine and vehicles parts. In fact, these commodities production supported by Thai-Japanese IJV firms, whereby capital goods were imported from Japan. This could be explain why Thailand trade balance has been continue surplus India while continue deficit Japan. Thus, Thailand investment opportunities outflow to India and the relationship between Japanese FDI and Thailand major export commodities to India will be examine in detail. Keywords FDI, Thailand, India, Japanese I. INTRODUCTION AND STUDY BACKGROUND East and South-East Asia region remains the number one global investment destination with the total Foreign Direct Investment (FDI) inflows of $192,612 million in 2014, approximately grew by 17 percent from FDI inflows in this region were engaged in manufacturing sectors worthy $106,402 million in 2015, an increase of 23 percent from 2013 (refer to Table: 1). This reflects East and South-East Asia position as the leading investment destination for international investment opportunities. The largest investing countries were United Stage, Japan, United Kingdom and Germany, in that order. Japan is the major investors in this region, support by the largest volume of FDI receipted worth $29,201 million in Particularly, South-East Asia economic is exhibiting a robust FDI growth from Japan. Thailand is one of the dominant countries attracting Japan FDI receipted and entered Thailand s market via wholly owned subsidiaries or international joint venture. Japanese firms via IJV for using Thailand cheap labor, enhance competitive advantages, for their strategic behavior enable faster entry to Thailand domestic market [1]. Most of IJV in manufacturing sectors were fall into small and medium enterprises whereby labor intensive was required for their production. This is supported by labour intensive FDI, available of raw material and value chain activities in less developing countries, such as Cambodia, Philippines and Viet Nam. The dominant inward FDI in South-Asia region flows into India. At the regional level FDI in manufacturing has risen, as illustrated by the automotive industry. In the recently launched Make in India initiative, the country government has identified automotive as a key industry in which India has the potential to become a world leader. This is support by the large volume of FDI inflows in South-Asia destination engaged in motor vehicles and transport equipment sector worth 4,270 Million USD in 2014, a double-fold jump from previous year. Similarity, FDI outflows from South-Asia originate mainly from India, investing in motor vehicles and transport equipment sector worth 933 Million USD in 2014, a triple-fold jump down from previous year. In 2014, Japan FDI inflows worth 3,129 Million USD, an increase of 4 percent from 2013 (refer to Table 2). Particularly, in automotive industry accounts for about 20 percent of India s manufacturing value added with annual production of 18 59

2 million vehicles. The major sources of FDI in the automotive industry are Japan, United States and the Republic of Korea. MNEs from these countries entered India s market through either joint venture or wholly owned subsidiaries. Sector/industry TABLE I: FDI in East and South-East Asia Classified by Industry and Countries (Millions of Dollars) East and South- East Asia as Destination East and South- East Asia as Investors Partner region/ economy East and South- East Asia as Destination East and South-East Asia as Investors Total 158, , , ,108 World 158, , , ,108 Primary Developed Economic 107, ,729 17,999 28,369 Manufacturing 81, ,402 24,241 69,877 European Union 42,975 41,227 9,150 9,938 Textiles and leather 5,591 6,519 1,367 4,276 Germany 13,340 14, Chemicals product 13,930 13,097 3,719 5,209 United Kingdom 8,668 6,286 4,503 5,503 Electrical equipment 9,132 20,158 6,612 17,654 United Stages 25,141 30,794 5,133 12,024 Motor vehicles and transport 18,155 28,896 3,157 19,098 Japan 29,540 29,201 1,785 2,553 equipment Services 76,028 82,154 90,581 69,718 Developing Economics 50,457 77,039 97, ,058 Business Services 10,148 15,494 42,912 9,462 China 3,724 14,073 20,541 28,499 Sources: UNCTAD, 2015, World Investment Report TABLE II: FDI in South-Asia Classified by Industry and Countries (Millions of Dollars) Sector/industry South-Asia as Destination South-Asia as Investors Partner region/ economy South-Asia as Destination South-Asia as Investors Total 26,368 38,957 15,955 14,220 World 26,368 38,957 15,955 14,220 Primary Developed Economic 19,282 23,129 4,134 2,856 Manufacturing 10,919 14,223 7,085 6,879 European Union 7,384 7,358 2,587 1,503 Textiles and leather ,039 Germany 2,061 2, Petroleum product 44 1, ,645 United Kingdom 2,470 1,146 1, Metals product 589 1, United Stages 5,405 8,489 1, Motor vehicles and transport 1,971 4,270 2, Japan 2,997 3, equipment Services 15,427 24,423 8,827 7,331 Developing Economics 7,011 15,725 10,952 11,079 Business Services 2,700 3,389 2,079 Ore China 884 6, Sources: UNCTAD, 2015, World Investment Report In Thailand, Japanese FDI plays a vital role in manufacturing sectors of which motor vehicles, automobile and its assembling manufacturing whereby International Joint Venture (IJV) is the one strategic Japanese firms prefer to engage in [2], [3]. Over 80 percent of Japanese FDI located their offshore production based in Thailand for export in some particular countries like India. Thus, this paper will be examine the role of Japanese FDI contributing to Thailand export orientation to India. In doing so Thailand investment opportunities outflows to India will be examine in detail. II. THE MOTIVE THEORIES FOR JAPANESE FDI IN THAILAND The motive of Japanese FDI into three perspectives which are natural resource-securing type; marketsecuring type and cost saving type [4]. However in reality, the nature of Japanese investors may differ according to demography and local business environment. Japanese FDI engaged in ASEAN for using of natural resource in host countries whereby cheap labors are available. The next motive is market securing which refers to a large country population, sizeable of recipient country market and national income; these are the motive factors for Japanese FDI. In case that countries are protected by tariff and non-tariff barriers, Japanese firms enable to secure market through Greenfield investment in these countries. During the last part of 1980, Japanese electronics firms began to set up their production base in ASEAN countries to maintain the international price competitiveness. Particularly, the large Japanese investment inflow has been investing in Thailand, this is motivated by cost saving factor whereby low-cost labor and natural resources are abundantly available [5]. As of this point, cost saving factor is the main reason to explain 60

3 the motive of Japanese firms in Thailand. The costs saving perspectives drive Japanese firms to search for production base in ASEAN for their export-orientation whereby production can perform at lowest cost. Thus, the countries are possess abundant resources, low wages, low inflation rate, undervalued exchange rates and well-functioning infrastructure such as development of airports, seaports, domestic transportation system, high standard of telecommunication system, availability of low cost airlines, electricity and water supply; these are all important factors determinants of cost-saving Japanese FDI. III. PURPOSE OF THE STUDY The main objective of this study are such as (1) To examine Thailand investment opportunities outflow to India (2) To examine the role of Japanese foreign direct investment (FDI) as the main contributor to Thailand export orientation (3) To examine Thailand export orientation to India contribute by the role of Japanese investment IV. RESEARCH DESIGN AND METHODS The data collection and analysis of this study is based on secondary data. The required data have been collected from various sources i.e. World Investment Reports, Asian Development Bank s Reports, Reserve Bank of India, Bank of Thailand, Thailand Ministry of Commerce, Board of Thailand Investment and other document relevant. It is a time series data and the relevant data have been collected for the period 2000 to V. RESULTS (1) Thailand Investment Opportunities Outflow to India The UNCTAD World Investment Report (2013) report India as the third most attractive location for FDI for The report also mentions that India accounted for more than four fifths of the FDI in South Asia in Japan was ranked in the 4th after United Kingdom with the cumulative inflows (April ) worthy $19,434 million, approximately 7 percent of total inflows. Thailand FDI Equity Inflows was ranked in the 35th, worthy $215 million, approximately 0.08 percent of total inflows (refers to Table 3: Share of top Investing Countries FDI Equity Inflows). As of the financial economic indicate India is the most attractive destination for global investors. The FDI inflows to India trend to increase due to fast economic growth rate, large economic of scale, abundant of natural resources and cheap labour are available. TABLE III: Share of top Investing Countries FDI Equity Inflows (Financial years) Ranks Country (April- March) (April- March) (Apr 2000-Dec 15) Cumulative inflows (April ) % age to total inflows in term of US$ in million 1 Mauritius 4,859 9,030 6,105 93,660 34% 2 Singapore 5,985 6,742 10,985 43,172 16% 3 U.K. 3,215 1, ,714 8% 4 Japan 1,718 2,084 1,082 19,434 7% 5 U.S.A 806 1,824 3,511 17,263 6% 6 Netherlands 2,270 3,436 2,147 16,818 6% 7 Cyprus ,444 3% 8 Germany 1,038 1, ,438 3% 9 France ,881 2% 10 UAE ,447 1% 35 Thailand % Total FDI Inflows from all countries 24,299 30,931 29, ,076 - Source: Ministry of Commerce & Industry, Government of India, (2015) Asian Development Bank predicts India s Gross Domestic Product (GDP) to grow by 6 percent for Moreover, World Bank sees 6.7 percent GDP growth for India by GDP composition by sector such as service 65 percent, industry 18 percent and agriculture 17 percent. The major sectors attracting highest FDI equity inflows are from service sector, construction development, computer software, telecommunication, automobile industry etc. The India automotive industry accounts for 45 percent of the country s manufacturing gross domestic product (GDP), 7.1 percent of the country s GDP and employs about 19 million people both directly and indirectly [6]. Trading between Thai and India reached about $8.2 billion in 2011, $8.9 billion in 2012, $8.7 billion in 2013 and 8.7 billion in Thai major export to India are as motor car, motor vehicles, parts & accessories, machinery and parts thereof and automatic data processing machines and parts thereof [7]. Thailand is the major partner of India whereby most of Thailand partner companies were engaged in automobile industry, electrical equipment and rubber goods. As of this point, Thailand opportunities for start outsourcing and looking for new international market with lower labour cost. India represent one of the dominant country whereby cheap 61

4 labour available, over 500 population structure are below 25 years old and largest demand of motor vehicles, vehicles parts and electronics part. Automobile industry is attracting FDI equity inflow worthy $14,318 million. This industry were supported by Japanese firms in Thailand via International Joint Venture (IJV) strategy where by over 80 percent of business are produce for export orientation (refer to Table 6). Thus, the opportunities for Thailand investment outflows to India can be investing in vehicles, parts & accessories, machinery and parts, electric and electronic products to support of automobile industry whereby most of Thai- Japanese IJV were engaged in this particular sectors [1]. As of this point, the opportunities of Thailand Company enable to serve of Indian domestic market share with annual production of million vehicles and trend to become the third largest automotive market by volume in Ranks Sectors (April-March) TABLE IV: Sectors Attracting Highest FDI Equity Inflows: (April-March) (Apr 2000-Dec 15) Cumulative inflows (April ) % age to total inflows in term of US$ in million 1 Service Sector** 2,225 4,443 4,258 48,161 17% 2 Construction Development 1, ,180 9% 3 Computer Software 1,126 2,296 5,306 20,419 7% 4 Telecommunications 1,307 2,895 1,072 18,130 7% 5 Automobile Industry 1,517 2,726 1,781 14,318 5% 6 Drugs & Pharmaceuticals 1,279 1, ,447 5% 7 Chemicals ,197 11,628 4% 8 Trading 1,343 2,728 2,717 10,744 4% 9 Power 1, ,258 4% 10 Hotel-Tourism ,839 3% 13 Food Processing Industry ,695 2% 17 Electrical Equipment , Rubber Goods , % 30 Electronics , % Source: Ministry of Commerce & Industry, Government of India, (2015) Note: Service Sector includes Financial Banking, Insurance, Non-Financial/Business, Outsourcing, R&D (2)To examine the role of Japanese foreign direct investment (FDI) as the main contributor to Thailand export orientation Thailand attracts Japanese FDI worthy 100,305 million in 2010 and increases to 158,978 million in 2011 before jumps to 348,430 million in 2012 or 54 percent improved from year before (refer to table 5). In Thailand metal and machinery sectors are the major recipient of Japanese FDI, following by electric and electronic sector. This large Japanese investment inflow was in the form of equity investment with local business or IJVs [8], [9]. Japanese investment in Thailand was predominated by automobile and its assembling manufacturing [10]. As of the large volume of Japanese FDI inflows in Thailand industrial sectors (exhibited in table 5) mainly come from the result of Japanese yen appreciation and rise in Japanese production costs. Reasoning to support Thailand opportunity to become a center of Japanese production network in ASEAN is guided by [11]. He is gave the idea of why foreign firm prefer to stay longoriented in some country rather than move to cheaper production base country. This could be explain by the case of Mexico City when the formation of North American Free Trade Area (NAFTA) has led to a less success of concentrated distribution of foreign investment in Mexico [11]. This case indicated that foreign firms found more profitable to locate their business units along US border rather than transfer to the new industry in Mexico City. Based on Hanson attitude, Japanese firms in Thailand have no tend to move their production base to the lower cost location like Myanmar, Lao and Cambodia. Since the majority of Japanese firms are engaged in automobile and its assembling manufacturing [8-10]. Despite, the Japanese investment inflows is trend to export orientation rather than supplied in Thailand as a host domestic county. In 2012, Japanese investment inflows worthy 164,931 million baht, approximately increase up to 42 percent from previous year (refer to Table 6: Japanese Export-Oriented Investment Projects through BOI). Despite, in 2013, Japanese export-oriented investment has decline to 68,192, a decreased of 41 percent from 2012 before jump down to 22,263 million baht or 33 percent decrease form For current Japanese export-oriented investment slump since 2013, this is cause by the sensitivity of Thailand minimum wage policy increase to 300 baht. The impact of higher labour costs lead some companies to shut down their operations and move to neighbouring countries to take advantage of even-cheaper labor costs like Cambodia [12]. 62

5 TABLE V: Japanese Investment Projects Approved by BOI classified by Sector Year Sector Agriculture and Product 15 4, , , , ,732 Mineral & Ceramics 6 1, , , , ,204 Light Industrial/Textiles , , , ,466 Metal Products and Machinery , , , , ,950 Electric & Electronic Products 69 46, , , , ,511 Chemicals and Paper 49 8, , , , ,790 Services 59 9, , , ,177 Total , , , , ,832 Source: Japanese Investment Projects date provided by Board of Investment (BOI) Thailand, 2015 TABLE VI: Japanese Export-Oriented Investment Projects through BOI Year Sector Net Application Export > = 80% 90 32, , , , ,424 Total , , , , ,334 Application Approved Export > = 80% 98 48, , , , ,263 Total , , , , ,832 Source: Japanese Investment Projects date provided by Board of Investment (BOI) Thailand, 2015 TABLE VII: Foreign Direct Investment Classified by Business (Million USD) A Agriculture, forestry and fishing B Mining and quarrying C Manufacturing 1,333 3,166 5,260 1,599 3,918 5,517 Of which: 10 Manufacture of food products Manufacture of beverages Manufacture of paper and paper products Manufacture of coke and refined petroleum products Manufacture of chemicals and chemical products , Manufacture of basic pharmaceutical products and pharmaceutical preparations Manufacture of rubber and plastics products Manufacture of computer, electronic and optical products 1, , Manufacture of electrical equipment 1, Manufacture of machinery and equipment n.e.c Manufacture of motor vehicles, trailers and semitrailers , , Manufacture of furniture D Electricity, gas, steam and air conditioning supply F Construction G Wholesale and retail trade; repair of motor vehicles and motorcycles 569 1,994 1, H Transportation and storage I Accommodation and food service activities K Financial and insurance activities 2,222 2,042 3,038 1, ,476 L Real estate activities 1,166 1,218 1,595 1,039 1,154 1,046 Others 430 5,038 4,643 9,026 3, Total 4,800 3,720 15,936 12,899 2,474 14,747 Source: Bank of Thailand, (2015), Last updated: 29 Feb

6 Based on the statistical evidence exhibited in Table 5 and Table 6 indicated that Japanese FDI has play a vital role for Thailand export orientation in generally and particularly in automobile and its assembling manufacturing. Similarly, statistics provided by Bank of Thailand (BOT) shows that FDI inflows majority engaged in manufacturing sectors. Japanese FDI were engaged in manufacture of electrical equipment, computer, electronic and optical products, motor vehicles, trailers and semitrailers (refers to Table 7). Marking on the manufacturing of motor vehicles, trailers and semi-trailers were strongly boosted up to $1,666 million in 2013; an increase of 72 percent compare with 2012 before decline to $744 million in 2014 and $522 million in 2015 respectively. In term of private consumption, in 2012 a large volume of passenger cars growth to 581,646 units, an increase of 48 percent from 2011, before continue slightly down to 580,629 units in 2013 and 318,312 in Similarly, in motorcycle market growth reached to 2,296,762 units before continue slightly down to 2,085,777 units in 2013 and 1,699,513 units in 2014 (refers to Table 8). As of these statistic evident enable to support the role of Japanese foreign direct investment (FDI) as the main contributor to Thailand export orientation in automobile and its assembling industry TABLE VIII: Private Consumption Indicators Electricity consumption (million kilowat-hour) 1/ 172, , , ,357 2 Household 2/ 38,988 37,70 36,471 32,792 3 Small-scale business (consume 0-30 kw) 2/ 18,838 18,388 17,133 15,471 4 Medium-scale busines (consume kw) 2/ 27,878 27,218 24,890 23,153 5 Large-scale business (consume 1,000 kw onwards) 2/ 69,290 67,881 66,949 61,093 6 Special business 3/ 5,650 5,587 5,405 4,801 7 Quantity sales of benzene (Million litres) 4/ 3,351 2,989 5,331 5,034 8 Value added Tax at 2000 prices (Millions of ) 559, , , ,043 9 Import of consumer goods at 2000 prices (Millions of US$) 5/ 13,829 14,143 13,811 12, Sales of vehicles (Units) 4/ 11 Passenger cars 318, , , , Motorcycles 1,699,513 2,085,777 2,296,762 1,822, Insured Persons and Beneficiaries 6/ 14 Insured Persons (article 33) 10,029,777 9,781,101 9,425,478 9,054, Utilisation in case of Unemployment 106,798 95,090 88,063 98,142 Source: Bank of Thailand, (2015), Last updated: 5 Aug 2015 (3) To examine Thailand export orientation to India contribute by the role of Japanese investment Through the lens of Japanese investor, Thailand has a successful story in the twenty-first century pertaining to the global export success of Thailand-based. This is because, Thailand productivity based on intensive used of cheap labor but relative skilled labor. Despite, Thailand s cheap labor advantage in Labor-intensive product has eroded by Vietnam, Cambodia, Laos, Philippines and Indonesia who can offer cheaper Labor costs. These are some example countries in ASEAN who can attract a substantial Japanese investment inflows to their countries due to cheaper Labor is abundant and larger domestic market. However, the level of local technology and skill Labor in these countries is relatively low as compare to Thailand. Thus, Thailand opportunity relies on the intensive use of cheap Labor but relatively high skill Labor as compare with other ASEAN countries [1]. As of this point, no wonder why the trend of Japanese investment inflows has no sign to decline as the evidence supported in Table 5 Japanese investment projects approved by BOI. Most of Japanese firms were engaged in the form of IJV and 80 percent of their production is object for export orientation as exhibited in Table 6 Japanese exportorientation investment projects through BOI. Similarly to Indian FDI using Thailand as their production based for export-orientation worthy 1,357 million baht in 2014, an increase of 31 percent from 2013 (refer to Table 10). Indian FDI in metal products and machinery worthy 684 million baht in 2012 and move up to 791 million baht in in This is serve by the rapid growth of Indian automobile industry (refer to Table 4: Sector Attracting Highest Equity Inflows), which contributed by the role of Japanese investment. As the point discussing above, enable to confirm the role of Japanese investment contributing to Thailand export orientation to India. Moreover, balance of trade is also a significantly economic indicator to shows why Thailand still continue promote Japanese investment. Table 11 Thailand-Japan trade balance shows a deficit balance of trade accumulate since 2010 (-$18, million) before peak to (-$25,272 million) in 2011 and decline to (-$13, million) in In other side, Table 11 Thailand-India Trade Balance shows a surplus balance of trade accumulate since 2010 worthy $2, million and increase up to $2, million in 2014.As of this point, enable to finalize the research conclusion that even through Thailand continue deficit balance of trade from Japan due to import raw material and machinery from Japan. Despite, these production factors were import for productivity and export to other countries. India is the example country import motors vehicle parts, and automobile assembling parts from Thailand whereby these products were contributed by Thai-Japanese IJV. Thus, this is a part of reason for Thailand government to promote Japanese FDI in general and export to India in particular to earn foreign exchange and generated national income. 64

7 TABLE IX: Indian Investment Projects Approved by BOI Classified by Sector Year Sector Agriculture and Product Mineral & Ceramics Light Industrial/Textiles Metal Products and Machinery Electric & Electronic Products Chemicals and Paper , Services Total 13 1, , , , ,016 Source: Broad of Thailand Investment, (2015) TABLE X: Indian Export-Orientation Investment Projects through BOI Export Net Application Export > = 80% 7 1, , , , Total 13 1, , , , ,479 Application Approved Export > = 80% , ,356 Total 13 1, , , , ,016 Source: Broad of Thailand Investment, (2015) TABLE XI: Thailand-Japan and Thailand-India Trade Balance (million USD) Thailand Japan Thailand India Total Trade 66, , , , , Total Trade 8, , ,686,16 8, , % % % Share % Share Export from Thailand to Japan 23, , , , , Export from Thailan d to India 5, , , , , % % % Share % Share Import from Japan to Thailand 42, , , , , Import from India to Thailan d 3, , , , , % % % Share % Share Trade Balance -18, , , , , Trade Balance 2, , , , , % % % Share , % Share Source: Information and Communication Technology Centre with Cooperation of the Customs Department 65

8 VII. CONCLUSIONS Thailand has a successful story in the twenty-first century pertaining to the global export success of Thailand-based. This is because, Thailand productivity based on intensive used of cheap labor but relative skilled labor. Thus, Thailand opportunity relies on the intensive use of cheap Labor but relatively high skill Labor as compare with other ASEAN countries [1]. Such Japanese firms enter to Thailand industry sectors via IJV in order to prospect for further Thailand market expand [13], [10]. Thailand attracts Japanese FDI worthy 100,305 million in 2010 and increases to 158,978 million in 2011 before jumps to 348,430 million in 2012 or 54 percent improved from year before (refer to table 5). In Thailand metal and machinery sectors are the major recipient of Japanese FDI, following by electric and electronic sector. Japanese investment in Thailand was predominated by automobile and its assembling manufacturing [1]. Thus, the opportunities for Thailand investment outflows to India can be investing in vehicles, parts & accessories, machinery and parts, electric and electronic products to support of automobile industry whereby most of Thai- Japanese IJV were engaged in this particular sectors [1]. As of this point, the opportunities of Thailand Company enable to serve of Indian domestic market share with annual production of million vehicles and trend to become the third largest automotive market by volume in As of this point, no wonder why the trend of Japanese investment inflows has no sign to decline as the evidence supported in Table 5 Japanese investment projects approved by BOI. Most of Japanese firms were engaged in the form of IJV and 80 percent of their production is object for export orientation as exhibited in Table 6 Japanese export-orientation investment projects through BOI. Similarly to Indian FDI using Thailand as their production based for export-orientation worthy 1,357 million baht in 2014, an increase of 31 percent from 2013 (refer to Table 10). Indian FDI in metal products and machinery worthy 684 million baht in 2012 and move up to 791 million baht in in This is serve by the rapid growth of Indian automobile industry (refer to Table 4: Sector Attracting Highest Equity Inflows), which contributed by the role of Japanese investment. Thailand opportunities for start outsourcing and looking for new international market with lower labour cost. India represent one of the dominant country whereby cheap labour available, over 500 population structure are below 25 years old and largest demand of motor vehicles, vehicles parts and electronics part. Automobile industry is attracting FDI equity inflow worthy $14,318 million. This industry were supported by Japanese firms in Thailand via International Joint Venture (IJV) strategy where by over 80 percent of business are produce for export orientation (refer to Table 6). Thus, the opportunities for Thailand investment outflows to India can be investing in vehicles, parts & accessories, machinery and parts, electric and electronic products to support of automobile industry whereby most of Thai- Japanese IJV were engaged in this particular sectors [1]. As of this point, the opportunities of Thailand Company enable to serve of Indian domestic market share with annual production of million vehicles and trend to become the third largest automotive market by volume in REFERENCES [1] Wadeecharoen, W. et al., Thailand Investment Position Outlook Through the lens of Japanese Investors: An Examination of the Japanese Investment Trend towards the ASEAN Economic Community (AEC), presented at National Institute Development Administration (NIDA). The Fourth International Conference on Advancement of Development Administration 2015 Social Sciences and Interdisciplinary Studies (the 4 th ICADA 2015). BKK. Thailand, May, [2] Wadeecharoen, W. et al., The Determinant Factors of International Joint Venture (IJVs) in Thailand Small and Medium Enterprise (SMEs), presented at National Institute Development Administration (NIDA). The First International Conference on Advancement of Development Administration 2011 Social Sciences and Interdisciplinary Studies (the 1 st ICADA 2011). BKK, Thailand, 8-10 March, NIDA BKK, 2011 [3] Suwannarat, P. et al., The Characteristics of International Joint Ventures in Thailand, Journal of International Business and Economics, Vol: 10, Issue 1, 2010 [4] Urata, S., Japanese foreign direct investment in Asia: Its impact on export expansion technology acquisition of the host economic, (Unpublished paper). Waseda University and Japan Center for Economic Research, [5] Tiwari, P. et al., Spatial pattern of Japanese manufacturing industry in four ASEAN countries, Regional Science, 82, [6] Ministry of Commerce & Industry, Government of India, (2015). Annual Report Available: Policies/Policy.aspx [7] India, Ministry of Commerce and Industry (2013). Fact sheet on foreign direct investment (FDI) from April 2000 to March March. Available: dipp.nic.in/english/publications/fdi_ Statistics/2013/india_FDI_March2013.pdf [8] Wadeecharoen, W. et al., An Examine of Thailand International Investment Position and the Role of Small and Medium Enterprises (SMEs) International Joint Venture (IJV) towards Thailand Economic Development, presented at Novotel Bangkok on Siam Square. International Conference on Contemporary Business and Management, ICOM Bangkok, December 10-12, 2012 [9] Wadeecharoen, W. et al., A Contribution of Small and Medium Enterprise (SMEs) International Joint Venture (IJV) to Sustain Thailand Economic Development, presented at Thai-Nichi Institute of Technology. International Conference on Business and Industrial Research. Bangkok Thailand, May 17-18, 2012 [10] Suwannarat, P. Thailand as location for International Joint Ventures: Exploring the host country location factors, International Journal of Business Research, Vol.12, Number 2, 2012 [11] Hanson, Increasing returns, trade and the regional structure wages, Economic Journal, 107: [12] James, P. (2013) Thailand Introduces Nationwide Minimum Wage The Diplomat: Read the Diplomat, Know the Asia-Pacific, January 11, 2013, Available: thailand-introduces-nationwide-minimum-wage/ [13] Racela, O.C. and Thoumrungroje, A Organization learning, marketing strategic chance and performance of wholly=owned and international joint venture ventures in Thailand, Global Conference on Business and Finance Proceeding. Vol.7, No