India-ASEAN Relations

Table of Contents

Context: In a step to further expand India-ASEAN (Association of South East Asian Nations) military cooperation, the maiden ASEAN-India Maritime Exercise (AIME) is set to begin shortly.

About Association of Southeast Asian Nations (ASEAN)

It was founded in 1967 by the five Southeast Asian nations of Indonesia, Malaysia, Philippines, Singapore and Thailand.
It is a regional grouping that aims to promote economic and security cooperation among its ten members.
Members: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
ASEAN is headed by a chair—a position that rotates annually among member states—and is assisted by a secretariat based in Jakarta, Indonesia.
If ASEAN were a country, it would be the seventh-largest economy in the world, with a combined GDP of $2.6 trillion in 2014.
- By 2050 it is projected to rank as the fourth-largest economy.
Home to more than 622 million people, the region has a larger population than the European Union or North America.
- It also has the third-largest labour force in the world, behind China and India.
Significance: ASEAN has played a central role in Asian economic integration, joining negotiations to form the world’s largest free trade agreement and signing six free trade deals with other regional economies.

Significance of ASEAN for India

The significance of ASEAN for India is multi-faceted and encompasses political, economic, strategic, and cultural aspects. The following are some of the key reasons why ASEAN is important for India:

ASEAN’s centrality in India’s foreign policy: ASEAN is a key pillar of India’s Act East Policy and Indo-Pacific Vision. A cohesive, responsive, and prosperous ASEAN is crucial for India’s regional ambitions.
Connectivity and development of Northeast: India has been prioritizing the ASEAN-India connectivity project, which aims to improve connectivity and infrastructure in the Northeast region. This can lead to progress and development in the region.
Maritime engagement: India and ASEAN aim to tackle traditional and non-traditional security threats in the region, such as piracy and drug trafficking. It also helps India bypass choke points such as the Malacca Strait in the Indian Ocean Region (IOR).
Security: ASEAN and India are working towards establishing a rules-based security architecture in the region, which contrasts China’s aggressive policies. They also collaborate to counter terrorism, violent extremism, and transnational crimes.
Economic: India is one of ASEAN’s top trading and investment partners. ASEAN countries offer a conducive environment for Indian businesses to invest and trade, and the region presents a lucrative market opportunity for Indian companies.
Supply chain integration post-COVID-19 pandemic: ASEAN and India are responding to the new supply chains emerging in the region and are working towards enhanced trade facilitation.
Cultural connections: India shares deep cultural and historical connections with ASEAN countries. The spread of Hinduism and Buddhism to Southeast Asia from India and the influence of Indian languages on the region’s scripts are some examples of the cultural connection between the two regions.

India’s relationship with ASEAN over the years

Political: India’s political relationship with ASEAN has been cordial and cooperative.
- The two sides share a similar outlook on several regional and global issues, including the need for a rules-based international order, respect for territorial integrity and sovereignty, and the importance of economic growth and development.
- India has been actively engaged with ASEAN in various regional forums and initiatives, such as the ASEAN Regional Forum (ARF), ASEAN Defence Ministers’ Meeting + (ADMM+), and the East Asia Summit (EAS).
- In 2012, India and ASEAN elevated their relationship to a Strategic Partnership, which marked a significant milestone in their bilateral ties.
- In recent years, they share interests in cooperation in sectors, such as trade and investment, energy, infrastructure, and people-to-people contacts.
- India’s Act East Policy, which was formally enunciated in 2014, is a key pillar of its foreign policy and is focused on expanding its engagement with ASEAN and other countries in the region.
Economic: ASEAN is one of India’s largest trading partners.
- Investment flows are also substantial both ways, with ASEAN accounting for a significant percentage of investment flows into India since 2000.
- The ASEAN-India Agreements on Trade in Service and Investments entered into force in 2015.
- India has a Comprehensive Economic Cooperation Agreement (CECA) with various countries of the ASEAN region which has resulted in concessional trade and a rise in investments.
- The ASEAN India-Business Council (AIBC) was set up in March 2003 in Kuala Lumpur as a forum to bring key private sector players from India and the ASEAN countries on a single platform for business networking and sharing of ideas.
Security and Defence: Joint Naval and Military exercises are conducted between India and most ASEAN countries.
- The maiden Asean-India Maritime Exercise is held this year (2023).
- Watershed’ Military Exercise was held in 2016.
- Also, partnership between ASEAN and India helps in countering Terrorism, Violent Extremism and Transnational Crimes, including through implementation of ASEAN Plan of Action in Combating Transnational Crime (2016-2025).
Tourism and people to people contact – India is the first Dialogue Partner to sign an MoU on Strengthening Tourism Cooperation with ASEAN.

Divergence of India ASEAN Relations

Implementation of projects: One of the major challenges is the lack of time-bound implementation of projects, such as the India-Myanmar-Thailand trilateral highway and Kaladan multimodal project, which would enhance connectivity between India and the ASEAN region.
Trade and economic ties: Despite efforts to strengthen economic ties, India’s trade and economic ties with ASEAN are much below their potential. China remains the largest trading partner of the regional grouping, followed by the European Union and the United States.
Free mobility of labour: The free mobility of labour within the ASEAN Economic Community region might hamper India’s prospects in terms of mobility of skilled workers, which has just been implemented with the ASEAN-India Services agreement.
Quadrilateral Security Initiative: ASEAN has not been very favourable to the rise of QUAD as a significant security institution in the region. It is neither willing to be entangled in the possible power transition taking place in the Indo Pacific.
Low FDI: India’s FDI in ASEAN is also low in comparison to China, with China’s FDI to ASEAN standing at a much higher figure.
Slow pace of implementation: The slow pace of implementation and lack of willingness to take risks has deterred India’s public sector enterprises and private companies from making substantive investments in the Southeast Asian region.
Territorial disputes: ASEAN member states are enmeshed in territorial disputes with interested powers for a long time, which creates a challenge for maintaining peaceful relations.
Indo-Pacific rivalry: The rivalry between major powers in the Indo-Pacific region, such as China and the United States, threatens the underlying stability on which rested the regional growth and prosperity.
Wobbling geopolitics: The geopolitical tension in the Indo-Pacific is producing geoeconomics consequences where issues of trade and technology cooperation as well as supply chain resilience are at peak. This is happening at a time when ASEAN remains a divided organization internally on how to manage these challenges.