India has often been viewed as punching under its weight when it comes to engaging the region. It is time for India to match its economic commitment to ASEAN with more strategic heft, as it commemorates 30 years of partnership with the regional bloc.
There is a general rhetoric that India and ASEAN are close. Often, India’s participation in ASEAN’s institutional structures, from India’s 1992 sectoral then Summit-level partnership in 2002, to its East Asia Summit membership in 2005 and finally its Strategic Partnership in 2012, are highlighted. However, many of the joint deliverables have been in strategic cooperation, with limited outcomes in trade and economics.
Observers have long expected that the ASEAN-India relationship, with India’s sheer economic heft and population size as an anchor, would partly balance other geopolitical forces playing out in the region. But this hope remains elusive as India is yet to live up to its potential in economic engagement and geopolitical influence in the ASEAN region. In fact, India is viewed as a lightweight in Southeast Asian geopolitics. The ISEAS – Yusof Ishak Institute’s 2022 survey of Asian observers highlighted their lukewarm attitude towards ASEAN-India relations — the fourth time this outcome has been recorded since the survey’s inception in 2019.
India’s cautious approach towards formulating deeper trade agreements highlights this gap between expectation and reality. The 2011 ASEAN-India Free Trade Agreement (FTA) raised hopes that India would be a strong economic partner for ASEAN, enabling the latter to diversify economic exposure and risks across its trading partners. This is yet to fully materialise.
Taking the period immediately before the Covid-19 pandemic (2019-present), it is notable that ASEAN’s merchandise trade with India went up from US$74 billion in 2011 to US$80.4 billion in 2018. However, India’s importance as an ASEAN export market declined from 3.7 per cent to 3.5 per cent, and its role as an import source country also declined from 2.4 per cent to 2.1 per cent over the same period. India has requested for a review of the ASEAN-India FTA, due to its deteriorating trade deficit with various ASEAN members. It was reported that India’s trade deficit has worsened for sectors accounting for about 75 per cent of India’s exports to ASEAN. India exited from the ASEAN-led Regional Comprehensive Economic Partnership (RCEP) Agreement after eight years of negotiations, as similar worries vis-à-vis ASEAN and other participating countries loomed large.
However, there are reasons for optimism that India will be more active in strategic cooperation with ASEAN. Going forward, India’s Indo-Pacific Oceans Initiative (IPOI) and participation in the Quad seem to point towards its interest in elevating its engagement with the Asia-Pacific region. Launched in 2019, the IPOI builds on India’s ‘Act East’ policy to increase its engagement in the maritime domain with like-minded partners. ASEAN appreciated India’s IPOI for its potential convergences and synergies with other regional ASEAN-led mechanisms such as the East Asia Summit and ASEAN Regional Forum. In some ways, this assures ASEAN that India will be a committed partner as it takes concrete steps to operationalise the ASEAN Outlook on the Indo-Pacific (AOIP) to safeguard ASEAN centrality and other principles for cooperation.
Meaningful and constructive action by New Delhi towards ASEAN will go a long way in changing regional observers’ lukewarm attitudes towards India in future perception surveys.
ASEAN and India should support each other’s strategy for cooperation in the region, as doing so will be pragmatic and maintain the strategic balance in the Indo-Pacific. Strengthening maritime cooperation, as mentioned in the strategic documents of the AOIP and the IPOI, including by saving ocean resources by monitoring resource exploitation and ameliorating climate change, would be ideal. A potential area for cooperation would be to tackle illegal and unregulated fishing, which continues to remain a problem for both entities.
Another potential bright spot could be the building of port infrastructure for improved maritime connectivity, to ensure safe maritime trade. India, under its Sagarmala initiative, is currently upgrading its major and minor ports on the east and west coasts to provide better infrastructure for enhanced trade with ASEAN, and is also exploring port-to-port cooperation initiatives with Indonesia and Thailand bilaterally.
Meanwhile, ASEAN and India have initiated a review of their FTA in goods, which is an opportunity for both parties to make the agreement more business friendly. Currently, the utilisation rate of the trade pact by Indian exporters is very low, at between 5 and 25 per cent. The Covid-19 pandemic has offered opportunities worldwide to harness digital transformation in the areas of supply chain connectivity, trade facilitation, and Single Windows for the efficient movement of cargo vehicles to reduce trade costs. ASEAN and India should thus enhance cooperation in the digital space. Improving accessibility to technology and digital infrastructure augurs well for greater cooperation in trade, investment, education, science and technology, and healthcare sectors.
2022 has been designated as the ‘ASEAN-India Friendship Year’ to commemorate the 30th anniversary of the ASEAN-India partnership. This anniversary is a timely reminder to step up cooperation comprehensively in areas of mutual interest. All eyes will be on how New Delhi can match its past rhetoric with new and more focused economic and strategic actions. A key opportunity is for ASEAN and India to leverage on each other’s strengths, accommodate their respective constraints, and recalibrate and re-energize their overall cooperation, despite current regional challenges and external shocks. Meaningful and constructive action by New Delhi towards ASEAN will go a long way in changing regional observers’ lukewarm attitudes towards India in future perception surveys.
Sharon Seah is Senior Fellow and Coordinator at the ASEAN Studies Centre, ISEAS – Yusof Ishak Institute.
Sanchita Basu Das is Associate Fellow at the Regional Economic Studies Programme, ISEAS - Yusof Ishak Institute.