India Ties with ASEAN

General Studies Paper-2

Context

India needs to embrace deeper engagement with the Association of Southeast Asian Nations (ASEAN) nations rather than retreat from existing trade agreements, as Asia reconfigures itself around trade, technology, and strategic alliances.

About India’s Ties with ASEAN

• Historical Foundations and Strategic Evolution:
  • Historical and Civilizational Links: Shared heritage through Buddhism, Hinduism, and maritime trade routes laid the foundation for India-ASEAN ties.
  • Look East to Act East: India’s 1992 Look East Policy matured into the Act East Policy in 2014, emphasizing connectivity, commerce, and cooperation.
  • Comprehensive Strategic Partnership: In 2022, India and ASEAN elevated their ties, focusing on maritime security, digital transformation, and sustainable development.
• Economic Engagement and Trade Dynamics:
  • ASEAN-India Trade in Goods Agreement (AITIGA): Signed in 2009, currently under review to address trade imbalances and modernize tariff structures.
  • Trade Volume: Bilateral trade reached $122.67 billion in 2023-24, with ASEAN accounting for 11% of India’s global trade.
    • The collective GDP of ASEAN is over $3.9 trillion, making ASEAN one of the world’s largest regional economies.
    • The largest portion of this trade came from Singapore, valued at over 35 billion dollars that year.
  • Digital and Startup Collaboration: Initiatives like the ASEAN-India Startup Festival and fintech partnerships are reshaping economic ties.
• Connectivity and Infrastructure:
  • India-Myanmar-Thailand Trilateral Highway and Kaladan Multimodal Transit Project: These aim to physically link India’s Northeast with Southeast Asia.
  • Digital Connectivity: India’s UPI system is being integrated with ASEAN platforms like Singapore’s PayNow, enhancing cross-border transactions.
• Security and Strategic Cooperation:
  • Counterbalance to China: Joint frameworks on supply chains, security, and climate build resilience.
  • Maritime Security: Joint naval exercises and defense dialogues support freedom of navigation and regional stability.
  • Counterterrorism and Cybersecurity: India and ASEAN collaborate on intelligence sharing and cyber policy dialogues.
  • Defense Diplomacy: India’s arms exports to ASEAN nations, including BrahMos missiles to the Philippines, signal deeper strategic trust.
• Cultural Diplomacy and People-to-People Ties:
  • ASEAN-India Year of Tourism 2025: India is investing $5 million to promote cultural exchange and tourism.
  • Educational Initiatives: Scholarships at Nalanda University and agricultural institutions foster academic collaboration.
  • Shared Heritage: Events like the Ramayana Festival and ASEAN-India Music Festival celebrate civilizational bonds.

Issues & Concerns

• Trade Imbalance & FTA Frictions: India’s trade deficit with ASEAN from $5 billion in 2010–11 to over $44 billion in 2024–25, despite bilateral trade crossing $130 billion.
  • India offered duty concessions on 71% of tariff lines, while ASEAN countries reciprocated with much lower percentages (e.g., Indonesia: 41%, Vietnam: 66.5%).
  • The review of the ASEAN-India Trade in Goods Agreement (AITIGA), announced in 2023, has seen slowprogress due to ASEAN’s reluctance to renegotiate terms.
  • India’s FTA with ASEAN, in effect since 2010, is undergoing its 10th review.
  • India fears that Chinese goods are being rerouted through ASEAN (rule of origin) to exploit FTA benefits, undermining domestic manufacturing.
• Geopolitical & Strategic Coordination Gaps:
  • Myanmar Crisis: India and ASEAN differ on how to engage with Myanmar’s military junta, complicating regional diplomacy and connectivity projects.
  • South China Sea Disputes: ASEAN’s cautious stance on China’s maritime claims contrasts with India’s support for a rules-based Indo-Pacific, creating strategic ambiguity.
  • Quad & AUKUS Sensitivities: ASEAN’s discomfort with India’s growing role in Quad and other security groupings reflects fears of being sidelined or antagonizing China.
• Connectivity & Infrastructure Bottlenecks:
  • Delayed Projects: Flagship initiatives by India have been hampered by conflict in Myanmar and bureaucratic inertia.
  • Limited Maritime & Air Links: Despite shared goals, maritime and air connectivity remains underdeveloped, affecting trade and tourism.
• Diplomatic & Institutional Challenges:
  • Fragmented Engagement: India often engages ASEAN countries bilaterally rather than through a unified regional approach, leading to coordination issues.
  • Underutilized Cultural Diplomacy: While India has deep civilizational ties with Southeast Asia, cultural outreach is sporadic and lacks strategic depth.
  • Youth & Educational Disconnect: Limited exposure to ASEAN languages, arts, and history among Indian youth weakens long-term people-to-people ties.
• Policy & Perception Gaps:
  • Protectionism vs. Integration: India’s cautious trade stance, including its exit from RCEP, has raised concerns about its reliability as a regional partner.
  • ASEAN’s Internal Divisions: ASEAN’s consensus-based model often stalls unified action, especially on contentious issues like China’s aggression or Myanmar’s coup.
  • Digital Colonialism: Global tech platforms dominate cultural narratives, sidelining indigenous voices from both India and ASEAN.

Road Ahead: Recalibrating Engagement

• Reviewing AITIGA: The ASEAN-India Trade in Goods Agreement (AITIGA) is under review to address trade imbalances and modernize terms.
• Negotiate Bilateral Trade Pacts: Prioritize strategic ASEAN economies like Vietnam, Indonesia, Singapore and Thailand.
• Expand CECA & CEPA Agreements: Strengthen existing Comprehensive Economic Cooperation Agreements.
• Digital & Services Trade: India’s strength in IT and fintech offers new avenues for collaboration beyond goods.
• Modernize Domestic Industry: Use tariff buffers to upgrade MSMEs and boost competitiveness.

Conclusion

• India’s engagement with ASEAN is guided by mutual respect, shared values, and a vision for a peaceful, prosperous Indo-Pacific.
• Its commitment to ‘ASEAN centrality’ in the Indo-Pacific is widely acknowledged, but consistent engagement remains key.
• With the adoption of the ASEAN-India Plan of Action 2026–2030, both sides are poised to deepen cooperation in emerging technologies, climate resilience, and regional governance.