India-ASEAN relations

Context

In October 2024, the Indian Prime Minister is attending the ASEAN and East Asia Summits in Vientiane, Laos, which marks the 10th anniversary of India’s “Act East Policy.” This engagement highlights ASEAN’s critical role in India’s foreign policy.

Significance of ASEAN in India’s Foreign Policy

• Countering Chinese Influence: India is keen on strengthening its ties with ASEAN to counterbalance China’s growing presence in the region. At the 2023 ASEAN-India Summit, PM Modi stressed the importance of cooperation for peace and stability in the Indo-Pacific.
• Economic Collaboration: ASEAN is India’s fourth-largest trading partner, with bilateral trade reaching around $81 billion in 2022-23, thanks to the 2010 India-ASEAN Free Trade Agreement.
• Strategic Importance: Strengthened relations with ASEAN fit into India’s “Act East Policy,” which aims to enhance engagement with the Asia-Pacific region.
• Cultural and Historical Ties: India’s connections with ASEAN are bolstered by shared cultural history, especially through Buddhism. Initiatives such as the “Buddhist Circuit” encourage religious tourism and cultural understanding.
• Security Cooperation: ASEAN is crucial in tackling regional security challenges like terrorism and maritime security, as demonstrated by India’s participation in platforms such as the ASEAN Defense Ministers’ Meeting Plus (ADMM-Plus) in 2020.
• Boosting Soft Power: Initiatives like the “ASEAN-India Youth Summit” promote cultural exchanges, helping India enhance its influence through soft power.
• Infrastructure Projects: Key projects like the India-Myanmar-Thailand Trilateral Highway and the Kaladan Multimodal Project are aimed at improving transport and connectivity between India and ASEAN.

Challenges in India-ASEAN Relations

• Geopolitical Tensions: The escalating US-China rivalry complicates India’s relations with ASEAN. For example, India’s membership in the Quad has caused concern among some ASEAN members.
• Geostrategic Complications: Territorial conflicts involving ASEAN members, such as the South China Sea dispute, add complexity to India’s role in promoting regional stability.
• Withdrawal from RCEP: India’s decision to withdraw from the Regional Comprehensive Economic Partnership (RCEP) negotiations at the last minute has disappointed some ASEAN members regarding trade liberalisation.
• Trade Imbalances: India faces growing trade deficits with ASEAN countries, where China remains the dominant trading partner. Issues like customs delays, non-tariff barriers, and implementation challenges further hinder trade.
• Slow Progress on Connectivity Projects: India’s connectivity initiatives, such as the India-Myanmar-Thailand Trilateral Highway, have progressed slowly compared to China’s Belt and Road Initiative.
• Trade Barriers: Non-tariff barriers, including complex customs procedures and inconsistent regulations, continue to be an obstacle for smoother trade and investment flows.
• Internal Divisions in ASEAN: The military coup in Myanmar has caused rifts within ASEAN, complicating India’s efforts to align its policies on regional stability and the restoration of democracy.

Steps to Enhance India-ASEAN Relations

• Addressing Geopolitical Challenges: India should reaffirm its commitment to regional security through ASEAN-led frameworks and strengthen defence and security cooperation.
• Exploring New Areas of Cooperation: India should increase collaboration with ASEAN in emerging fields like digitalisation, health, space technology, and advanced manufacturing to promote innovation and connectivity.
• Semiconductor Diplomacy: Strengthening cooperation in the semiconductor sector could help create a regional ecosystem in partnership with ASEAN countries.
• Accelerating Infrastructure Projects: India should prioritise critical infrastructure projects that enhance trade and deepen people-to-people ties with ASEAN nations.
• Revisiting AIFTA: India could recalibrate the ASEAN-India Free Trade Agreement (AIFTA) to address trade imbalances, with a focus on sectors like pharmaceuticals, textiles, and IT services.
• Improving Connectivity: A “Connectivity Master Plan” aligned with ASEAN’s 2025 goals could be proposed, including digital initiatives aimed at boosting trade by 20-30%.
• Manufacturing Competitiveness: Extending India’s Production Linked Incentive (PLI) scheme to new sectors and encouraging joint ventures, such as an electronics hub with Vietnam, could boost industrial cooperation.
• Energy Partnership: India could propose an “ASEAN-India Energy Partnership” focusing on renewable energy, including joint research on green hydrogen and technological innovation.
• Defence and Strategic Cooperation: Offering capacity-building assistance and initiating joint defence production with countries like Singapore and Indonesia would enhance strategic ties.
• Climate Change Collaboration: Establishing an “ASEAN-India Green Partnership” could focus on climate change mitigation and renewable energy, further enhancing India’s role in environmental cooperation.