India - South East Asia Relation

India-ASEAN

• After its Independence in 1947, India followed a policy of Non-Aligned Movement (NAM) and became a champion of decolonisation, including in Southeast Asia.
• In a major shift away from policies of the Cold War era, India adopted the “Look East Policy” (LEP) soon after economic liberalization in 1991 to increase economic and commercial ties with East and Southeast Asian nations such as China.
• Over the years the policy has also concentrated on building closer ties on the strategic and security aspects in the region.
• In 1992, India became a dialogue partner across limited sectors in ASEAN and in 1995 it achieved the status of full dialogue partnership.
• In 1996, India was given the opportunity to appear in the ASEAN Post Ministerial Conference (PMC) and became a full member of the ASEAN Regional Forum (ARF).
• While in 2012 the relations were upgraded to strategic partnership.
• One of the major consequences of India's engagement with ASEAN has been the ASEAN-India Free Trade Agreement (AIFTA), which was seen as an essential step towards deeper economic integration.
• For the past few years India has joined the ASEAN “plus six”, including China, Japan, South Korea, Australia and New Zealand, to discuss the RCEP free trade agreement. India recently walked out of the agreement due to many concerns. (But India & China has about $50 billion trade deficit, From South Korea import more electronic, Indonesia is good in dairy Product, so India ask some changes in RCEP, ASEAN not accept it, so India walk out from RCEP).
• The “ASEAN-India Partnership for Peace, Progress, and Shared Prosperity” in 2004 and the “Plan of Action” in 2012 highlighted the growing confluence in various areas between ASEAN and India.
• Two decades of the Look East Policy, now renamed as Act East Policy by the government, have brought some positive results for India in making ASEAN an important regional partner.

(India has Tri-military base in Andaman & Nicobar. To counter any attack from china)

Importance of ASEAN for India

• ASEAN's centrality in India's foreign policy: India's Indo-Pacific Vision and India's Act East Policy.
• Maritime security: Trade, energy and strategic importance.
• Investment opportunities for Indian businesses: Lower cost of production.
• Lucrative market for Indian firms.
• Countering China: Common aspect of territorial and border issues with China.
• Integration with regional and global supply chains: Like Vietnam's FTA with EU will help India.
• Addressing regional and international issues: Having common interest and concerns on various regional and international issues.
• Failure of South Asian Association for Regional Cooperation (SAARC).

Significance of ASEAN for India in terms of Economy

• The bloc represents a key trade and investment partner for India. Over the past 20 years, ASEAN’s portion of India’s total exports and imports is around 9.22 percent and 8.93 percent, respectively, which is a considerable chunk.
• Investment from ASEAN to India has been over $70 billion in the last 17 years accounting for more than 17 per cent of India's total Foreign Direct Investment or FDI.
• The ASEAN economies have a wide experience in manufacturing which can be utilized by India in its Make in India endeavor.

In terms of Security

• ASEAN platform allows India to discuss non-traditional security issues in Indian Ocean Region(IOR) like piracy, illegal migration, and trafficking of drugs, arms, and human, maritime terrorism, etc. which can only be resolved on a multilateral level. (Golden Triangle)
• India has also scored several diplomatic successes at ARF, including maintaining ties after its nuclear test of 1998, isolating Pakistan during the Kargil War, and lobbying against Pakistan’s entry in the forum till 2002.
• Philippines Aspiring to procure BrahMos Missile.
• Connectivity is another important issue of convergence, with India working toward formalizing its transit agreements and establishing better connectivity infrastructure with this region through land, water, and air, example- India-Myanmar-Thailand Trilateral Highway and the Kaladan Multimodal Project.
• The aggressively rise of China, both economically and militarily, has caused suspicion among the countries in the region. This provides an opportunity to India which seeks to balance China and gain cooperation in the region.
• The recent loss of US market by the ASEAN nations can be compensated with the domestic demand in India which has been increasing with the rise of middle class in the country.
• In terms of security challenges, both ASEAN and India are faced with grave vulnerabilities with regard to terrorism and it is in their common interest to work together to build peace and security in the region. (China)
• ASEAN countries justifiably perceive India, with the largest Naval forces in the Indian Ocean and nuclear capabilities, a strategic partner to balance China’s growing power in the region
• While East Asia is on the verge of entering a phase of lower share of working age population India is entering a phase with a higher share of working age population which can prove to be a human resource base for East Asia.

Issues between India & ASEAN

• Trade imbalance in favour of ASEAN Nations
• ASEAN nations consider India is not proactive in region
• India’s capacity to provide development assistance, market access and security guarantees remains limited and ASEAN’s inclination to harness India for regional stability remains circumscribed by its sensitivities to other powers specially China.
• India continues to privilege bilateral partnership rather than pursuing ASEAN as a multilateral forum.
• Recent withdrawal from RCEP

Way forward

• Service & Manufacturing can be worked upon to balance trade and investment relationship by drawing on each other’s inherent strength
• ASEAN nations like Vietnam are well-integrated with global value chains which India can use to give its own manufacturing sector a boost.
• India can facilitate greater Indian service sector exports to ASEAN as well as supporting freer movement of people.
• Digital technologies- Given the reluctance of ASEAN states to take help from Chinese giants in the field (due to concerns regarding china’s ability to own data), Indian IT sector may take some advantage.
• Effective delivery of projects- India needs to focus on more effective delivery of projects it is already committed to.
• Improving Connectivity- With China having three times more commercial flights than India to Southeast Asia, improving air connectivity between India and ASEAN countries should also be high on the agenda.
• Besides, the Bay of Bengal can be used as an exploratory ground for the development of an India-ASEAN maritime framework. (BIMSTEC, IORA)
• Strengthening cultural connect - Tourism too can be further encouraged between India and the ASEAN with some creative branding by the two sides.
• Indo Pacific: The US president recently replaced the term “Asia-Pacific” with “Indo-Pacific” which depicts the increasing importance of India, also presenting a great opportunity and responsibility on the Indian part.
• The region has become strategically important for India due to its growing importance in the world politics. And for India to be a regional power as it claims to be, continuing to enhance its relations with ASEAN in all spheres must be a priority.