India’s Rising Profile in Southeast Asia and the Test of Strategic Relevance

For decades, ASEAN–India relations have been described as a partnership full of potential but short on delivery. Despite the shared history, cultural connections, and constant emphasis on shared interest in the Indo-Pacific, efforts to deepen ties have often fallen short of expectations. India and ASEAN may have elevated their relationship to a comprehensive strategic partnership, yet in practice, the outcomes still pale in comparison to ASEAN’s more entrenched linkages with China, the US, and Japan.

The State of Southeast Asia 2025 Survey (SSEA), however, suggests that the tide may be turning. India’s standing in Southeast Asia as a strategic partner is beginning to improve. This shift is not dramatic, but it is discernible enough to be noticed and to raise the question of whether these more favourable perceptions can translate into deeper engagement and, ultimately, real strategic relevance.

The numbers tell the story. India is still not in ASEAN’s top tier of partners, but its trajectory is upward. In terms of economic influence (Table 1), India moved up from eighth place in 2024 to sixth, overtaking Australia, South Korea, and the UK. Politically and strategically (Table 2), it rose from last place to seventh place, again ahead of Australia and the UK. Confidence in India to champion the global free trade agenda and to provide leadership to maintain the rules-based order and uphold international law has also increased in rankings.

Table 1: Which country/regional organisation is the most influential economic power in Southeast Asia?

Table 2: Which country/regional organisation has the most political and strategic influence in Southeast Asia?

Most striking was India’s leap in strategic relevance (Table 3) as a dialogue partner, climbing from ninth to sixth place. The survey also shows that India is ASEAN’s third choice as a hedging partner (Figure 1) in managing the uncertainties of the US–China rivalry, with its share of support growing from 10.5 per cent to 13.5 per cent this year. Trust in India to “do the right thing” also grew modestly, although doubts linger over its capacity and political will to lead beyond its immediate neighbourhood.

Table 3: Rank the following Dialogue Partners in order of strategic relevance to ASEAN:

Figure 1: If ASEAN were to seek out “third parties” to hedge against the uncertainties of the US-China strategic rivalry, who is your preferred and trusted strategic partner for ASEAN?

Why has ASEAN’s perception of India shifted? Three factors stand out, the first being India’s more sustained and visible diplomatic engagement with ASEAN and its member states. Beyond its regular participation in ASEAN-led platforms, New Delhi has pursued active bilateral diplomacy with key partners. Prime Minister Narendra Modi visited Brunei, Singapore, and Laos last year, signalling India’s attentiveness not just to ASEAN’s larger economies but also to its smaller members. In 2024, Malaysian Prime Minister Anwar Ibrahim visited India, elevating ties into a comprehensive strategic partnership, while Indonesia’s President Prabowo Subianto travelled to Delhi in January this year, concluding agreements on defence, maritime security, and digital cooperation. Collectively, these engagements have reinforced the impression that India is investing consistently in ASEAN at both the regional and bilateral levels. On the question of dialogue partners’ strategic relevance (Table 3) in the SSEA survey, India’s standing in Laos rose dramatically, with Lao respondents ranking it fourth this year, up from ninth place last year; Brunei respondents also gave India a stronger ranking than last year.

Second, India’s tradition of non-alignment, now reframed as multi-alignment, resonates strongly with ASEAN’s own instinct for neutrality, first enshrined in the 1971 Zone of Peace, Freedom and Neutrality Declaration. Both sides prize flexibility, autonomy, and inclusivity, preferring partners that provide options rather than demand allegiance. In this sense, India is strong enough to matter, yet not so overwhelming as to coerce, which makes it attractive to a region navigating the sharpening US–China rivalry. India’s claim to leadership of the Global South further reinforces this appeal. Through the Voice of the Global South Summit and its G20 presidency in 2023, New Delhi elevated issues of development, climate justice, and equitable growth – priorities that are also shared by ASEAN countries.

Third, India has aligned its rhetoric and initiatives with ASEAN’s own priorities. Its Indo-Pacific Oceans Initiative (IPOI) is closely aligned with ASEAN’s Outlook on the Indo-Pacific (AOIP), emphasising openness, inclusivity, and respect for international law while avoiding the hard edges of bloc politics. This dovetailing reassures ASEAN countries that India supports ASEAN centrality and multilateralism rather than treating the region as a counterweight in its strategic rivalries. As Prime Minister Modi reminded the region at the Shangri-La Dialogue in 2018, nations that stand on principles rather than behind powers earn respect – a message that carries even greater weight in an Indo-Pacific marked by sharp divides.

Yet improved perception is not enough. The economic relationship remains the paradox of ASEAN–India ties, an area with the greatest promise, but also the greatest frustration. ASEAN is already India’s fourth-largest trading partner, with trade exceeding US$106 billion in 2024, but the relationship is constrained by structural barriers that continue to erode trust on India’s part and momentum.

The most immediate challenge is the persistent trade imbalance. India runs a sizeable deficit with ASEAN, fuelling anxiety in New Delhi that its market is being opened without sufficient reciprocity. Indian exporters often point to non-tariff barriers, divergent standards, and restrictive rules of origin in ASEAN markets as obstacles that limit their competitiveness. These obstacles have reinforced the perception that ASEAN’s supply chains are already too tightly bound to China and East Asia, leaving India disadvantaged – a sentiment bluntly captured when India’s Commerce Minister Piyush Goyal described ASEAN as “China’s B-team”.

Compounding this imbalance is India’s absence from the Regional Comprehensive Economic Partnership (RCEP). By opting out in 2019, New Delhi effectively excluded itself from the region’s most ambitious trade framework, which harmonises tariffs and standards across 15 economies. RCEP has tightened the integration of ASEAN with China, Japan, and South Korea, while leaving Indian exporters facing higher costs and stricter compliance requirements. The result is a growing risk of India’s marginalisation at a time when others are moving further ahead.

Another constraint is India’s relatively modest private-sector presence in Southeast Asia. While Indian companies are globally competitive in IT services, pharmaceuticals, and technology start-ups, their investment and business footprint in ASEAN still lags well behind that of Japan, China and South Korea, and is heavily concentrated in Singapore. Without stronger business-to-business linkages, the partnership is left overly dependent on government frameworks that cannot on their own deliver the depth and resilience that ASEAN–India relations require.

External shocks may now force both sides to act. The Trump administration’s decision to impose tariffs of up to 50 per cent on Indian exports has been described by Indian businesses as “impossible to cope with”. ASEAN cannot replace the US as a market, but it can help India diversify. With its large consumer base and its role in East Asian supply chains, ASEAN is a natural partner, provided the barriers that have long hampered closer economic ties are addressed.

The roadmap is not new. The ongoing review of the ASEAN–India Trade in Goods Agreement (AITIGA) is critical for lowering tariffs on intermediate goods, harmonising standards, and simplifying rules of origin so that India can link more effectively into ASEAN’s supply chains. Connectivity is another priority. While physical projects such as the India–Myanmar–Thailand Trilateral Highway remain delayed, digital initiatives are showing promise. The India–Singapore real-time payments link demonstrates how integration can empower small businesses and reduce costs, and scaling this across ASEAN could be transformative. There is clear potential in the green economy, where ASEAN’s energy transition aligns with India’s ambitions in solar, EVs and green hydrogen. Beyond clean energy, cooperation could also extend to semiconductors, with India scaling up capacity and ASEAN seeking partners to build resilience in this critical industry.

The real test is not perception but delivery. The SSEA 2025 shows that India is starting to matter more in Southeast Asia, but goodwill is fragile. Unless both sides summon the political will to act decisively, the gains of recent years might fade. For ASEAN, India offers a hedge and a partner in diversification. For India, ASEAN is both a conduit into East Asia’s tightly integrated supply chains and a platform from which to project leadership of the Global South. The next phase of ASEAN–India relations will be judged not by rhetoric or perception, but by the tangible outcomes both sides can deliver.

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Editor’s Note:
ASEANFocus+ articles are timely critical insight pieces published by the ASEAN Studies Centre.