This is the third consecutive time India has invited a leader from an East Asian country to be the chief guest at the Republic Day parade, an honour accorded to special friends with which New Delhi wishes to accelerate its diplomatic and economic ties.
This year, India hosted Indonesian President Susilo Bambang Yudhoyono as the chief quest at the Republic Day function. Last year, the honour went to South Korean President Lee Myung-bak.
This is also only the second time in over half a century that a woman head of state or government would be the chief guest at the Republic Day parade. Queen Elizabeth II came to India in 1961 as the chief guest.
The 44-year-old Shinawatra, a businessperson and politician, became not just Thailand's first female prime minister, but also the youngest prime minister of that country in over 60 years when she assumed office in August after a landslide electoral victory.
Shinawatra's visit comes at a time when India and Thailand are fast-tracking their negotiations for a comprehensive Free Trade Agreement and are hard at work to seal crucial agreements like an extradition treaty, a mutual legal assistance treaty in civil and commercial matters and an agreement on transfer of sentenced persons.
Officials are hoping that some of these pacts may be signed during Shinawatra's visit.
The state visit by then Thai Prime Minister Abhisit Vejjajiva in April provided an added momentum to bilateral ties, which are growing stronger by the day.
Bilateral trade is expected to touch $10 billion next year.
Indian companies have invested $2 billion in Thailand and companies from that country invested nearly $1 billion in India. People-to-people contacts are stronger than ever with over 800,000 Indians visiting Thailand every year. Roughly around the same number of Thai tourists visit India.
The two sides are also discussing ambitious connectivity plans like a proposed trilateral highway project linking India and Thailand through Myanmar that is set to give a boost to New Delhi's ties with the East Asia region.
Shinawatra's visit will also put the spotlight on India's blossoming ties with Southeast Asian and East Asian countries and will take place in a year when New Delhi will host the first commemorative India-ASEAN summit. In October, the leaders of Vietnam and Myanmar visited India in quick succession.
Last month, Prime Minister Manmohan Singh interacted with leaders of the region at the India-ASEAN and East Asia summits in Bali in Indonesia.
The visit of the Thai prime minister to India will also be closely watched by China, which is wary of New Delhi's growing diplomatic and economic clout in Southeast Asian countries.