ASEAN

India's strategic engagement with the Association of Southeast Asian Nations (ASEAN) is vital for its economic, technological, and geopolitical positioning in a rapidly changing global landscape. As Asia reshapes itself around new trade agreements, technological advancements, and shifting strategic alliances, India must prioritize deeper integration with ASEAN to harness mutual growth and regional stability.

ASEAN and RCEP

• ASEAN is a coalition of 10 Southeast Asian nations—Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam—formed in 1967 with the goal of promoting economic growth, peace, and cultural development.

• The Regional Comprehensive Economic Partnership (RCEP), comprising ASEAN members along with China, Japan, South Korea, Australia, and New Zealand, is the world's largest trade bloc. India was initially part of RCEP negotiations but withdrew in 2019 due to concerns about trade deficits, domestic protection, and unmet demands on tariffs, rules of origin, and investment protections.

India's relationship with ASEAN remains crucial, even though it is navigating both economic challenges and geopolitical tensions in the region.

India’s Historical and Strategic Ties with ASEAN

Historical Foundations:

India’s historical and civilizational links with ASEAN go back millennia, with shared heritage through Buddhism, Hinduism, and maritime trade routes. These cultural ties laid the foundation for modern diplomatic and economic relations.

Evolution of India's "Look East" and "Act East" Policies:

• India’s Look East Policy (1992) evolved into the Act East Policy in 2014, emphasizing deeper connectivity, commerce, and cooperation with Southeast Asia. This shift highlighted India’s growing focus on enhancing its engagement with ASEAN nations.

Comprehensive Strategic Partnership:

• In 2022, India and ASEAN elevated their relationship to a Comprehensive Strategic Partnership, focusing on key areas such as:

  • Maritime security

  • Digital transformation

  • Sustainable development

Economic Engagement with ASEAN

Trade Dynamics:

• Bilateral trade between India and ASEAN reached $122.67 billion in 2023-24, with ASEAN accounting for 11% of India’s global trade.

• Singapore is India’s largest trading partner within ASEAN, contributing significantly to the trade volume.

Trade Agreements:

• The ASEAN-India Trade in Goods Agreement (AITIGA), signed in 2009, has been under review since 2023 to address issues like trade imbalances and modernize tariff structures.

• India’s trade deficit with ASEAN has grown substantially, from $5 billion in 2010-11 to over $44 billion in 2024-25. Despite offering duty concessions on 71% of tariff lines, ASEAN nations have not reciprocated in a manner that addresses India’s concerns, especially with countries like Indonesia (41%) and Vietnam (66.5%).

Digital and Startup Collaboration:

India’s increasing focus on digital transformation has fostered collaboration with ASEAN, especially through initiatives like:

• The ASEAN-India Startup Festival

• Fintech partnerships
  These initiatives are helping reshape economic ties and expand India’s digital footprint in the region.

Connectivity and Infrastructure:

• Projects like the India-Myanmar-Thailand Trilateral Highway and the Kaladan Multimodal Transit Project are aimed at enhancing physical connectivity between India’s Northeast and Southeast Asia.

• Digital Connectivity has also improved with India’s UPI system being integrated into ASEAN’s platforms, like Singapore’s PayNow, facilitating cross-border transactions.

Security and Strategic Cooperation

Counterbalance to China:

• India’s engagement with ASEAN is also a strategic maneuver to counterbalance China’s growing influence in the region, especially in terms of supply chains, maritime security, and climate resilience.

Maritime Security:

• India has partnered with ASEAN for joint naval exercises, reinforcing freedom of navigation and regional stability in the Indo-Pacific.

• Collaboration on counterterrorism and cybersecurity further solidifies India’s strategic role in ASEAN.

Defense Diplomacy:

• India's defense ties with ASEAN have grown stronger, marked by arms exports like the BrahMos missiles to the Philippines, signaling deeper strategic trust.

Challenges and Concerns

Trade Imbalances:

India faces persistent trade deficits with ASEAN, exacerbated by challenges in its Free Trade Agreements (FTAs) and rules of origin that allow Chinese goods to enter ASEAN markets under preferential terms.

Geopolitical Divisions:

• India and ASEAN are not always in sync on issues like the Myanmar crisis, where India’s stance differs from ASEAN’s.

• South China Sea disputes present another challenge, as ASEAN remains cautious about confronting China, while India is committed to a rules-based Indo-Pacific.

ASEAN’s Internal Divisions:

• ASEAN’s consensus-based decision-making process often stalls coordinated action on key issues like China’s maritime aggression or Myanmar’s military coup, limiting the bloc’s efficacy in dealing with these matters.

Connectivity Bottlenecks:

• Delayed infrastructure projects, especially in Myanmar, hinder the implementation of flagship initiatives that would enhance physical and digital connectivity in the region.

Recalibrating India’s Engagement with ASEAN

Review and Strengthen Trade Agreements:

• India should push for revising the AITIGA to address the trade imbalance, modernize tariff structures, and resolve issues related to rules of origin. Additionally, prioritizing bilateral trade pacts with strategic ASEAN countries like Vietnam, Indonesia, Singapore, and Thailand can help smooth trade frictions.

• Expanding CECA (Comprehensive Economic Cooperation Agreements) and CEPA (Comprehensive Economic Partnership Agreements) will help India solidify its trade relationships with ASEAN.

Leverage Digital and Services Trade:

• India should leverage its global leadership in IT, fintech, and services to enhance digital and services trade with ASEAN countries, opening new avenues for collaboration beyond traditional goods.

Invest in Modernizing Domestic Industry:

• India must modernize its domestic industry and MSMEs to become more competitive, using tariff buffers to support growth in sectors that are vulnerable to foreign competition.

Strengthen Connectivity and Infrastructure:

• India must overcome connectivity bottlenecks and expedite infrastructure projects in Myanmar, Thailand, and other ASEAN nations to facilitate better trade and mobility.

Enhance Cultural and People-to-People Ties:

• While India has deep civilizational ties with ASEAN, cultural diplomacy needs to be given greater strategic depth through initiatives like the ASEAN-India Year of Tourism (2025) and increased youth exchanges and educational collaborations.

Conclusion: India’s Strategic Path Forward

India’s relationship with ASEAN is foundational to the Indo-Pacific’s future prosperity and stability. With a shared vision of a peaceful, prosperous region, India must actively engage with ASEAN to address the geopolitical and economic challenges in this dynamic region.