Trade, economy andinvestment 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 economicscenario has changed and this has resulted in a strengthened relationshipbetween India and ASEAN. The ‘Look East Policy’ is a result of India’s searchfor economic space. It is an effort to strengthen relationships with theSoutheast Asian nations in order to counterweight the influence of China. TheLook East Policy has today matured into a dynamic and action oriented ‘Act EastPolicy’.
ASEAN accounted for around 10.4 percent of India’s exportsand 10.6 percent of India’s imports in the year 2016-17 (Desai, 2017). ASEAN’s portion ofIndia’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-ASEANtrade value stood at US$ 76.53 billion in 2014-15, China-ASEAN trade valuereached US$452.2 billion in 2016.
Indian investments continue to remainmarginal in ASEAN although there have been some limited ones in the past. At the moment, Indian investment falls way behind that ofChina. 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 itselfis keen to reduce its dependence upon China and look for alternatives. UnlikeChinese investors, there is not much resentment against Indian investors eitherin Southeast Asia or Africa, since they generate local employment.
One of the reasons for such insignificant levels of Indianinvestments in ASEAN countries in the past is the fact that the Indian Diasporain ASEAN countries has not been able to play a significant role in expandinginvestment relations with India (Asher et. al., 2003).Moreover, the Indiancompanies had limited capacity and interest to invest abroad until recently,including in ASEAN. Indian investments in ASEAN are expected to increase asthere has been increased liberalization and more strict regulations on outwardforeign investments especially in ICT, pharmaceutical, automobiles, andengineering sectors. Regional alliance The geopolitical uncertainty in Asia overlaps with the riseof growing economies and requires Asian businesses and governments to adapt tonew technologies and manage the disorder to their workforces caused by computerization (Desai, 2017). The region’schallenges are multi-pronged, which requires the formulation of policysolutions that are attentive to economic, military, and political consequences.Prime Minister Modi highlighted the multi-dimensional nature of India-ASEANrelationship and said, ‘Our engagement is driven by common priorities, bringingpeace, stability and prosperity in the region,’ India-ASEAN strategic cooperation assumes great significancein the context of an increasingly confident China.
Aconsiderable tension has risen as a result of Beijing’s territorial claims inthe oil and gas-rich South China Sea China and India’s geostrategic rivalry is visiblein the maritime domain (Maini, 2016). Indian and Chineseinterests go beyond their immediate borders to the ASEAN region. China hasrisen in terms of economic growth and trade with ASEAN countries which givesIndia more reason to step up its collective efforts vis-a-vis ASEAN (Maini, 2016). Beijing’s violent claims have put a stress in China-ASEANties under stress and New Delhi has been trying to fill the gap by being an accountableregional stakeholder. In accordance with principles of international law, ithas made a strong case for supporting not only freedom of navigation but alsoaccess to resource (Maini, 2016). When Chinasuggested to expand its territorial waters, New Delhi challenged the importanceof free navigation (Maini, 2016).
All maritime powers, including India, have anational interest in freedom of navigation, open access to Asia’s maritimecommons, and respect for international law in the South China Sea (Maini, 2016). India and SingaporeNavy concluded their week-long bilateral military exercise in South China Seain 2017. Despite progress made over the last 25 years in India-ASEANties, there remains immense scope for further growth in the relationship. TheAsia-Pacific is one of the most dynamic regions of the world today, and it isnecessary for both India and the ASEAN countries to keep contributing to theshaping of the so-called ‘Asian century’ (Desai, 2017). Formidable security challenges remain, and thetwo sides must think strategically to increase cooperation for a favorablebalance of power as maintaining regional stability is a priority for both Indiaand ASEAN (Maini, 2016).
Both regions are also increasingly facing non-traditional security challengeslike piracy and terrorism, for which greater coordination is needed (Maini, 2016). Socio-cultural alliance The diplomatic, economic and security relations betweenASEAN and India has been strengthened as a result of a large number of Indiandiaspora in many of the Southeast Asian countries The Indian diaspora includean important instrument of India’s soft power and they help set a highlyorganic relationship between the two regions (Maini, 2016). It can be said that the presence of Indian diasporain Southeast Asia has led to its increasing political and economic engagementwith ASEAN-led institutions such as the ASEAN Regional Forum and East AsiaSummit (Maini, 2016) .The culture of SoutheastAsian countries have been shaped by the Indian diaspora community that residethere. Tamil, is one of the officiallanguages of Singapore for the total size of the Indian diaspora in the citystate (Maini, 2016). Almost 1.6 millionIndians who are either immigrants or descendants of immigrants call it theirsecond home in Malaysia (Desai, 2017). The cultural relationship between India and ASEANhas been formed by the presence of the Indian diaspora in ASEAN nations Bollywoodindustry has a huge fan base in Malaysia and had a net worth of USD $2.
32billion (RM9.21 billion) in 2017. Challenges India’s efforts to make itself relevant to the region comeat a time of great turmoil in the Asian strategic landscape. China’santagonistic stance against rivals and US allies in Asia has been highlightedby events and the tension is expected to rise (Desai, 2017). Beijing has startedtrying to dictate to its neighbors the boundaries of acceptable behavior, withits political and economic rise.
As a result, regional states are reevaluatingtheir strategies (Maini, 2016). India’s rolebecomes critical in such an evolving balance of power. As Singapore’selder-statesman Lee Kuan Yew has argued some years ago, India must be “part ofthe Southeast Asia balance of forces” and “a counterweight to China” in theIndian Ocean.” India’s ‘Act East’ policy is part of this larger dynamic. Theregional states have shown an unparalleled reciprocal interest in Indianforeign-policy priorities as New Delhi has reached out to its partners in Southand 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 strategicpartner of the ASEAN by accelerating its domestic economic reforms agenda,enhancing connectivity within the region, and further boosting its engagementwith regional institutions, to meet the region’s expectations (Maini, 2016). India and the ASEANnations have common objectives that resonate with a peaceful and prosperousregional security architecture (Desai, 2017).
The India-ASEANrelations have crossed a long path since the start of the partnership a quarterof a century ago. Deeper engagement and further cooperation should be prioritizedby both sides if the full potential of this engagement is to be realized in duetime.