Trade, has resulted in a strengthened relationship

Trade, economy and


The Association of South-East Asian Nations (ASEAN)
comprises of Thailand, Vietnam, Indonesia, Philippines, Malaysia, Singapore,
Myanmar (Burma), Cambodia, Laos, Brunei.. The world’s political and economic
scenario has changed and this has resulted in a strengthened relationship
between India and ASEAN. The ‘Look East Policy’ is a result of India’s search
for economic space. It is an effort to strengthen relationships with the
Southeast Asian nations in order to counterweight the influence of China. ‘Act
East Policy’ is the matured version of the Look East Policy.


ASEAN accounted for around 10.4 percent of India’s exports
and 10.6 percent of India’s imports in the year 2016-17 (Desai, 2017). 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 over the past 20 years (Desai, 2017). While India-ASEAN
trade value stood at US$ 76.53 billion in 2014-15, China-ASEAN trade value
reached US$452.2 billion in 2016. Indian investments continue to remain
marginal in ASEAN although there have been some limited ones in the past.


Chinese investments are higher than Indian investments at
the moment. While Indian investments for 2015-2016 were estimated at $224
million, Chinese investment over the same period totaled over $3 billion (Maini, 2016). Myanmar however itself
is keen to reduce its dependence upon China and look for alternatives. There is
not much resentment against Indian investors either in Southeast Asia or
Africa, since they generate local employment unlike Chinese investors.


One of the reasons for such insignificant levels of Indian
investments in ASEAN countries in the past is the fact that the Indian Diaspora
in ASEAN countries has not been able to play a significant role in expanding
investment relations with India (Asher et. al., 2003).Moreover, the Indian
companies had limited capacity and interest to invest abroad until recently,
including in ASEAN. Indian investments in ASEAN are expected to increase as
there has been increased liberalization and more strict regulations on outward
foreign investments especially in ICT, pharmaceutical, automobiles, and
engineering sectors.


Regional alliance


The geopolitical uncertainty in Asia overlaps with the rise
of growing economies and requires Asian businesses and governments to adapt to
new technologies and manage the disorder to their workforces caused by computerization (Desai, 2017). The region’s
challenges are multi-pronged, which requires the formulation of policy
solutions that are attentive to economic, military, and political consequences.
Prime Minister Modi highlighted the multi-dimensional nature of India-ASEAN
relationship and said, ‘Our engagement is driven by common priorities, bringing
peace, stability and prosperity in the region,’


India-ASEAN strategic cooperation assumes great significance
in the context of an increasingly confident China. A
considerable tension has risen as a result of Beijing’s territorial claims in
the oil and gas-rich South China Sea China and India’s geostrategic rivalry is visible
in the maritime domain (Maini, 2016). Indian and Chinese
interests go beyond their immediate borders to the ASEAN region. China has
risen in terms of economic growth and trade with ASEAN countries which gives
India more reason to step up its collective efforts vis-a-vis ASEAN (Maini, 2016).  


Beijing’s violent claims have put a stress in China-ASEAN
ties under stress and New Delhi has been trying to fill the gap by being an accountable
regional stakeholder. In accordance with principles of international law, it
has made a strong case for supporting not only freedom of navigation but also
access to resource (Maini, 2016). When China
suggested to expand its territorial waters, New Delhi challenged the importance
of free navigation (Maini, 2016).  All maritime powers, including India, have a
national interest in freedom of navigation, open access to Asia’s maritime
commons, and respect for international law in the South China Sea (Maini, 2016). India and Singapore
Navy concluded their week-long bilateral military exercise in South China Sea
in 2017.


Despite progress made over the last 25 years in India-ASEAN
ties, there remains immense scope for further growth in the relationship. The
Asia-Pacific is one of the most dynamic regions of the world today, and it is
necessary for both India and the ASEAN countries to keep contributing to the
shaping of the so-called ‘Asian century’ (Desai, 2017).  Formidable security challenges remain, and the
two sides must think strategically to increase cooperation for a favorable
balance of power as maintaining regional stability is a priority for both India
and ASEAN (Maini, 2016).
Both regions are also increasingly facing non-traditional security challenges
like piracy and terrorism, for which greater coordination is needed (Maini, 2016).



Socio-cultural alliance


The diplomatic, economic and security relations between
ASEAN and India has been strengthened as a result of a large number of Indian
diaspora in many of the Southeast Asian countries The Indian diaspora include
an important instrument of India’s soft power and they help set a highly
organic relationship between the two regions (Maini, 2016).  It can be said that the presence of Indian diaspora
in Southeast Asia has led to its increasing political and economic engagement
with ASEAN-led institutions such as the ASEAN Regional Forum and East Asia
Summit (Maini, 2016) .The culture of Southeast
Asian countries have been shaped by the Indian diaspora community that reside
there.  Tamil, is one of the official
languages of Singapore for the total size of the Indian diaspora in the city
state (Maini, 2016). Almost 1.6 million
Indians who are either immigrants or descendants of immigrants call it their
second home in Malaysia (Desai, 2017). The cultural relationship between India and ASEAN
has been formed by the presence of the Indian diaspora in ASEAN nations  Bollywood
industry has a huge fan base in Malaysia and had a net worth of USD $2.32
billion (RM9.21 billion) in 2017.   









India’s efforts to make itself relevant to the region come
at a time of great turmoil in the Asian strategic landscape. China’s
antagonistic stance against rivals and US allies in Asia has been highlighted
by events and the tension is expected to rise (Desai, 2017). Beijing has started
trying to dictate to its neighbors the boundaries of acceptable behavior, with
its political and economic rise. As a result, regional states are reevaluating
their strategies (Maini, 2016). India’s role
becomes critical in such an evolving balance of power. As Singapore’s
elder-statesman Lee Kuan Yew has argued some years ago, India must be “part of
the Southeast Asia balance of forces” and “a counterweight to China” in the
Indian Ocean.” India’s ‘Act East’ policy is part of this larger dynamic. The
regional states have shown an unparalleled reciprocal interest in Indian
foreign-policy priorities as New Delhi has reached out to its partners in South
and Southeast Asia (Maini, 2016),


India needs to rise to the occasion by delivering on its
‘Act East’ policy. India must do a more convincing job as a reliable strategic
partner of the ASEAN by accelerating its domestic economic reforms agenda,
enhancing connectivity within the region, and further boosting its engagement
with regional institutions, to meet the region’s expectations (Maini, 2016). India and the ASEAN
nations have common objectives that resonate with a peaceful and prosperous
regional security architecture (Desai, 2017). The India-ASEAN
relations have crossed a long path since the start of the partnership a quarter
of a century ago. Deeper engagement and further cooperation should be prioritized
by both sides if the full potential of this engagement is to be realized in due




Desai, S. (2017, November). The Diplomat.
Maini, T. S. (2016, October). The Diplomat.



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