India-ASEAN Bilateral and Trade Relations

We profile the progress in India-ASEAN bilateral and trade relations, as economic and strategic engagement continues to strengthen between the two regions.

With India’s rising diplomatic influence and its leadership in the Global South, a deeper partnership with ASEAN offers mutual benefits and fosters regional stability. Since May 2024, India has significantly increased its engagement with Southeast Asia. This outreach started with the visit of Thailand’s Foreign Minister to India in July 2024, followed by Malaysian Prime Minister Anwar Ibrahim’s visit in August.

Brief on ASEAN

The Association of Southeast Asian Nations (ASEAN) is a regional intergovernmental organization founded on August 8, 1967, in Bangkok, Thailand. Its primary aim is to promote political, economic, and social cooperation and stability among its member countries. The founding members include Indonesia, Malaysia, the Philippines, Singapore, and Thailand. Over time, the group expanded to include other countries totaling ten member states.

1. Viet Nam
2. Thailand
3. Singapore
4. Philippines
5. Myanmar
6. Malaysia
7. Lao PDR
8. Indonesia
9. Cambodia
10. Brunei Darussalam

ASEAN operates through consensus-based decision-making, which emphasizes diplomacy, negotiation, and non-interference in internal affairs. Its key initiatives include fostering economic growth, regional peace, and cultural collaboration, alongside efforts toward building a free trade area and enhancing integration through the ASEAN Economic Community (AEC). The organization also engages with global powers like China, the U.S., and the European Union through dialogue partnerships.

Significance of India-ASEAN relations

India-ASEAN cooperation began in the 1990s, driven by shared economic and strategic interests, particularly in response to China’s growing influence. India’s “Look East Policy”, launched in 2014, marks a more action-oriented approach of the country to deepening relations with ASEAN. The collaboration started with India becoming a Sectoral Partner of ASEAN in 1992 and progressed to Dialogue Partner status in 1996, Summit Level Partner in 2002, Strategic Partnership in 2012, and Comprehensive Strategic Partnership in 2022.

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Over the past three decades, the India-ASEAN partnership has expanded, with seven ministerial meetings and various official-level interactions. India’s participation in ASEAN meetings since 1992 has helped develop several action plans, the latest of which was adopted in 2020, emphasizing political, security, and economic cooperation.

As a member of the Quad, India’s commitment to a free and inclusive Indo-Pacific reassures ASEAN countries and contributes to regional stability.

India and ASEAN collaboration

India and ASEAN collaborate across a broad range of areas, with ASEAN being a key element in India’s Act East Policy. The cooperation spans the following sectors:

1. Annual summits: India and ASEAN hold annual summits, which began as a “Sectoral Dialogue Partnership” in 1992 and became a full “Dialogue Partnership” in 1996. In 2002, this relationship was elevated to the summit level.
2. Trade and investment: India and ASEAN have signed a Free Trade Agreement (FTA), significantly boosting trade and investment. ASEAN is India’s 4th largest trading partner, with total trade reaching US$110.4 billion in 2021-22.
3. Regional connectivity: India is working to improve connectivity with ASEAN through projects like the India-Myanmar-Thailand (IMT) trilateral highway and the Kaladan Multimodal Transit Transport project.
4. Defense and security: Defense ties between India and ASEAN have deepened through joint military exercises such as the ASEAN-India Maritime Exercise and participation in the ASEAN Defense Ministers’ Meeting Plus (ADMM+). India also places ASEAN at the heart of its Indo-Pacific vision for regional security and growth (SAGAR – Security and Growth for All in the Region).
5. Socio-cultural cooperation: To strengthen people-to-people connections, India and ASEAN have promoted various cultural exchanges, such as the ASEAN Students Exchange Programme, training courses for ASEAN diplomats, and the ASEAN-India Network of Think Tanks.
6. Education and research: India has established the ASEAN-India Centre at the Research and Information System for Developing Countries (RIS) to facilitate studies on ASEAN-India relations. The Delhi Dialogue initiated in 2009, serves as an annual platform to discuss political, security, economic, and socio-cultural issues.
7. Funding and financial assistance: India has supported ASEAN countries through various funds like the ASEAN-India Cooperation Fund, the ASEAN-India S&T Development Fund, and the ASEAN-India Green Fund, aimed at enhancing cooperation in different sectors.

India-ASEAN FTA

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The Framework Agreement on Comprehensive Economic Cooperation between ASEAN and India was signed in October 2003, establishing the legal foundation for subsequent agreements. These agreements include the trade in goods agreement, trade in services agreement, and investment agreement, which together form the ASEAN-India Free Trade Area (AIFTA).

• The ASEAN-India Trade in Goods Agreement was signed and came into effect on January 1, 2010. Under this agreement, ASEAN member states and India committed to gradually open their markets by reducing and eliminating tariffs on 76.4 percent of goods.
• The ASEAN-India Trade in Services Agreement, signed in November 2014, includes provisions on transparency, domestic regulations, market access, national treatment, recognition, and dispute settlement.
• Additionally, the ASEAN-India Investment Agreement, also signed in November 2014, ensures protection of investments, including fair and equitable treatment for investors, non-discriminatory practices in cases of expropriation or nationalization, and guarantees of fair compensation.

Under the AIFTA, economic cooperation spans various sectors, including agriculture, fisheries, forestry, services, mining, energy, science and technology, transport, infrastructure, and manufacturing. Other areas of collaboration include human resource development, small and medium enterprises (SMEs), competition policy, Lao’s Mekong Basin development, intellectual property rights, and government procurement.

India’s trade relation with the ASEAN bloc

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

Source: Department of Commerce, Ministry of Commerce and Industry, GoI

Increasing engagement with ASEAN members

With India’s rising diplomatic influence and its leadership in the Global South, a deeper partnership with ASEAN offers mutual benefits and fosters regional stability. Since May 2024, India has significantly increased its engagement with Southeast Asia. This outreach started with the visit of Thailand’s Foreign Minister to India in July 2024, followed by Malaysian Prime Minister Anwar Ibrahim’s visit in August.

Emerging ties with ASEAN members

India-Brunei relations

Prime Minister Modi’s visit to Brunei in September 2024, at the invitation of Sultan Haji Hassanal Bolkiah, was the first bilateral visit by an Indian Prime Minister to the country.  As a significant exporter of fossil fuels to India and a host to India’s ISRO Telemetry Tracking Station, Brunei holds strategic importance. Both leaders discussed expanding cooperation in areas such as defense, energy, space, health, and trade, reaffirming their commitment to strengthen the ASEAN-India Comprehensive Strategic Partnership.

India-Singapore relations

Since their relationship was elevated to a Strategic Partnership in 2015, both nations have expanded cooperation in areas such as sustainability, digitalization, and advanced manufacturing.

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During Prime Minister Modi’s visit to Singapore this year, the focus was on implementing the ASEAN-India Action Plan adopted in 2023, and discussions included the India-Singapore Ministerial Roundtable (ISMR) and a Memorandum of Understanding (MoU) on semiconductors. Singapore has been a significant investor in India, contributing over US$11.77 billion in foreign direct investment (FDI) in 2023-24. Further, Singapore is India’s largest trade partner within ASEAN, with bilateral trade growing from US$6.7 billion in 2004-05 to US$35.6 billion in 2023-24. In terms of commercial and business ties, approximately 9,000 Indian companies are registered in Singapore.

Conclusion

India’s frequent high-level engagements with ASEAN countries underscore the central role of ASEAN in India’s Act East Policy and Indo-Pacific strategy. India’s steadfast support for ASEAN’s unity and centrality highlights its recognition of ASEAN’s strategic importance in economic, territorial, and cultural domains. Over time, India has solidified its position as a reliable partner in the region, with ASEAN viewing India as a crucial ally in both security and trade matters.

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