In 2001, the leaders of India and Thailand agreed to expend economic cooperation in trade and investment, and set up a joint working group to study the feasibility of establishing a Thailand - India free trade area.

The Joint Working Group held four rounds of meetings between May and December of 2002, and concluded that a free trade agreement would create mutual benefits in expanding trade, investment, and economic cooperation in areas, such as tourism, education, finance and banking, health, aviation, and international transportation. In addition, Thailand would benefit from expanded trade and reduced tariffs on exports to India, particularly garments, leather products, chemicals, rubber, plastics, metals, automobile and parts, and electrical goods.

The two countries have agreed upon Change in Tariff Heading (CTH) + Local Content of 40% as the general rule for consideration of origins of products. They also agreed on the Product Specific Rules (PSR) for other 82 items.

In addition, such goods are required to meet direct consignment rules and other applicable requirements in the Rules of Origin for Thailand - India Free Trade Agreement.