Delta plans a $3-million expansion in Uttarakhand to meet domestic demand.

As a trade-off for higher returns, Thai companies may have to change the way they manage their human resources in India.

For example, companies must adapt to India's caste system, which poses unique challenges to foreign companies, say executives of Thailand's largest auto parts group, Thai Summit Group.

Thai Summit has made offshore investments in four countries: Malaysia, Vietnam, Indonesia and now India. It also aims to invest in China in the next five years. "Despite the cross-cultural and business practices, India and China cannot be overlooked (by Thai Summit) if we want to be a leading international auto parts supplier," said Thanathorn Juangroongruangkit, the company's executive vice-president.

India has emerged as one of the world's fastest-growing economies due to a large labour force and rich natural resources.

Based on World Bank statistics in 2006, India's 1.11 billion people could generate $911.8 billion in GDP, with anticipated double-digit growth annually through to 2010.

Thai Summit Group expects overseas revenues of 5.9 billion baht in 2008, an increase of 43% from 2007.

The added revenue generated by offshore plants would expand to 10 billion baht in 2011. By that time, Thai Summit would have more than 3,000 employees in overseas operations.

Focusing on its investment in India, Thai Summit has five manufacturing plants in Gurgaon (near New Delhi), Faridabad, Chennai, Bangalore, Pune and Himachal Pradesh.

The company has become a major supplier for some Indian's largest motorcycle and three-wheeled vehicle producers including Honda, Suzuki, the Bajaj and TVS groups.

Mr Thanathorn said management in its Gurgaon plant in northern India posed challenges due to the caste system and high turnover. For example, workers often leave their stations unclean, expecting lower-caste workers to clean them.

"We opt to outsource many a lot of work to others," said Mr Thanathorn.

Delta Electronics (Thailand) Plc, a SET-listed electronics components maker, is another investor in India, having recently established a power-supply assembly plant near New Delhi.

It generated nearly US$70 million in 2006 from its two other plants in Uttarakhand (formerly known as Uttaranchal) and Tamil Nadu.

However, the company faced serious labour problems in its first years, said executive director Anusorn Muttaraid.

"There was once a strike after we appointed a low-caste person to join management," he said.

Delta plans a $3-million expansion in Uttarakhand to meet domestic demand. A new plant in southern India near Chennai will be an export base.