The historical context of Thailand’s foreign policy is shaped by its long-standing engagement with ASEAN and its strategic location bordering the Straits of Malacca – a critical maritime artery for global trade. Treaties establishing ASEAN membership in 1995, alongside ongoing negotiations for deeper economic integration, have prioritized regional connectivity. However, shifting geopolitical power dynamics – particularly the rise of China and India – have compelled Thailand to diversify its economic partnerships. Bangladesh, with its burgeoning economy and strategic location on the Bay of Bengal, presents a potentially powerful opportunity. The existing bilateral relationship, previously characterized by primarily humanitarian aid and limited trade, is now undergoing a significant evolution.
Key stakeholders in this evolving relationship are numerous. Thailand, under Minister Phuangketkeow, seeks to leverage its logistical advantages – specifically the port of Ranong – to facilitate trade with Bangladesh. Bangladesh, guided by Prime Minister Sheikh Hasina’s government, is actively pursuing economic diversification and seeking access to international markets. ASEAN itself plays a crucial role, offering a framework for regional cooperation and potentially accelerating trade negotiations. India, as a significant regional actor with historical ties to both countries, will undoubtedly observe developments closely. Furthermore, the European Union, through its GSP+ trade scheme, provides a potential pathway for increased exports from Bangladesh.
Data reveals a compelling picture. Bangladesh’s Gross Domestic Product (GDP) has grown at an average rate of 7.7% annually over the past decade (World Bank, 2025), driven primarily by its garment industry and increasing investments in infrastructure. Thailand’s exports, predominantly driven by automobiles and electronics, represent a significant volume of trade within ASEAN. According to the Thai Customs Department, trade between Thailand and Bangladesh reached 2.8 billion USD in 2024, with a projected 15% increase over the next five years, largely dependent on the successful negotiation of a Free Trade Agreement. “The potential benefits of a FTA are substantial, offering Bangladesh access to Thailand’s advanced manufacturing capabilities and a stable, investment-friendly environment,” noted Dr. Arun Sharma, Senior Fellow at the Institute for Strategic Studies in Bangkok. “However, key challenges remain, including differing regulatory standards and concerns regarding labor practices.”
Recent developments over the last six months highlight the accelerating pace of these discussions. In July 2025, a preliminary working group led by officials from the Thai Ministry of Commerce and the Bangladesh Ministry of Commerce commenced exploratory talks on tariff reductions and investment promotion. In November 2025, the two countries signed a memorandum of understanding (MoU) to establish a joint commission for economic cooperation, signaling a commitment to deepen engagement. The planned construction of a deep-sea port at Chittagong, a collaborative project between Thailand and Bangladesh, is expected to significantly enhance connectivity and reduce transportation costs – a critical component of facilitating increased trade. As Dr. Meena Patel, Senior Analyst at the South Asian Strategic Studies Centre in Islamabad, explained, “The connectivity initiatives represent a strategically vital step, directly addressing logistical bottlenecks that have historically hampered trade between the two nations. A successful port development will undoubtedly impact regional supply chains and strengthen Thailand’s role as a key transit hub.”
Looking ahead, within the next six months, the primary focus will be on finalizing the terms of a draft FTA, addressing concerns regarding intellectual property rights, and establishing clear regulatory frameworks. Longer-term, over the next five to ten years, a fully operational FTA could catalyze significant economic growth in both countries, potentially pushing Bangladesh’s GDP growth towards 8-9%. However, the realization of this potential hinges on overcoming significant hurdles, including capacity building, addressing infrastructure gaps, and mitigating potential disruptions caused by global economic fluctuations. A key risk is the potential for political instability within Bangladesh, which could derail investment and trade agreements. The success of Thailand’s strategic pivot towards the Indian Ocean region will also be closely monitored. The ultimate outcome will be determined by the ability of both nations to foster trust, resolve disputes effectively, and embrace a shared vision of mutual economic prosperity. This situation necessitates a sustained commitment to diplomacy and a willingness to adapt to evolving circumstances, proving a crucial test for Thailand’s foreign policy ambitions. The question remains: can Thailand successfully navigate this increasingly complex geopolitical landscape, transforming a tentative partnership into a truly robust engine for regional growth?