India-ASEAN: Partners for Progress | 29 Jan 2025

Indonesia’s participation in India’s Republic Day celebrations reflects the deep-rooted cultural and strategic ties between India and ASEAN. As ASEAN’s largest economy and a key G20 member, Indonesia exemplifies India’s broader engagement with the region, particularly in maritime security and economic cooperation. From the Bandung Conference to BRICS, India-ASEAN ties have evolved from anti-colonial solidarity to a strategic partnership aimed at ensuring regional stability in the face of shifting geopolitical dynamics, including China's Indo-Pacific assertiveness. 

How India-ASEAN Relations Have Evolved Over Time?  

• Early Engagement: Historical and Cultural Ties 
  • Ancient Trade and Cultural Links: Indian influence on Southeast Asia through Buddhism, Hinduism, and Sanskrit (e.g., Angkor Wat, Ramayana traditions). 
    • Flourishing trade routes linked India with Southeast Asian kingdoms. 
  • Colonial Era and Anti-Colonial Struggles: Shared struggle against colonial rule; India supported Indonesia’s independence. 
    • Bandung Conference (1955): Marked India’s engagement with newly independent Asian and African nations. 
• Post-Independence Period: Limited Interaction (1950s–1980s) 
  • Non-Alignment and Regional Priorities: India’s focus on domestic issues and Cold War non-alignment policy led to limited ASEAN engagement. 
  • Minimal Economic and Strategic Cooperation: India’s inward-looking economy restricted trade and investment. 
    • ASEAN prioritized engagement with Western economies majorly the United States.  
• Post-Cold War: Economic and Strategic Engagement (1990s–2000s) 
  • Look East Policy: Launched after economic liberalization to strengthen ties with Southeast Asia. 
    • India became a Sectoral Dialogue Partner of ASEAN in 1992, Full Dialogue Partner in 1996 and Summit-level Partner in 2002. 
  • Early Trade and Security Agreements: ASEAN Trade in Goods Agreement (2009) boosted trade and investment. 
    • India-ASEAN Trade in Services Agreement (2015) further boosted economic ties. 
• Strengthening Strategic Partnership (2011–Present) 
  • Act East Policy (2014): Expanded Look East to focus on deeper political, economic, and security ties. 
    • India upgraded relations with ASEAN to a Strategic Partnership in 2012. 
    • Also, in November 2022,they upgraded their relationship to a Comprehensive Strategic Partnership (CSP). 
  • 15th ASEAN-India Summit (2017): Security and economic cooperation in the maritime domain was prioritized. 
    • Proposal for joint naval exercises and fleet review with ASEAN navies. 
    • Announcement of ASEAN-India Startup Festival and Pravasi Bharatiya Divas.. 
  • India-ASEAN Plan of Action (2016-2020): Signed at the 3rd ASEAN-India Summit in 2004; the current iteration was adopted in 2015. 
    • 70 out of 130 activities implemented, covering trade, security, and cultural cooperation. 
  • Financial Mechanisms Supporting India-ASEAN Cooperation 
    • ASEAN-India Fund (2016): $50 million to support the Plan of Action. 
    • ASEAN-India Science & Technology Fund (2015): Increased to $5 million. 
    • ASEAN-India Green Fund (2007): $5 million for climate change adaptation projects. 
    • ASEAN-India Project Development Fund: Rs. 500 crore SPV to facilitate investments. 

What are the Key Areas of Convergence Between India and ASEAN?  

• Maritime Security & Indo-Pacific Cooperation: India and ASEAN share concerns over China’s assertiveness in the South China Sea, making maritime security a key area of cooperation.  
  • India supports ASEAN centrality in the Indo-Pacific and has increased joint naval exercises and capacity-building initiatives.  
  • India’s Indo-Pacific Oceans Initiative (IPOI) aligns with ASEAN’s Outlook on the Indo-Pacific (AOIP), focusing on freedom of navigation and regional stability. 
  • India’s SAGAR (Security and Growth for All in the Region) doctrine also complements ASEAN’s maritime objectives. 

• Trade and Economic Integration: ASEAN is India’s fourth-largest trading partner, and India-ASEAN trade has grown significantly in the last decade.  
  • The India-ASEAN Free Trade Agreement (FTA) is being reviewed to address trade imbalances and enhance supply chain resilience.  
  • India’s Act East Policy focuses on deeper integration with ASEAN economies through digital trade, fintech, and regional value chains.  
    • India's Unified Payments Interface (UPI) and Singapore's PayNow are now officially connected allowing for “real-time payment linkage.  
  • ASEAN also benefits from India’s emerging role as a manufacturing hub amid China+1 strategies. 
• Connectivity & Infrastructure Development: India and ASEAN seek greater physical and digital connectivity to enhance economic ties and regional integration.  
  • In 2017, India committed $1 billion in credit for ASEAN connectivity and maritime projects. 
  • The India-Myanmar-Thailand Trilateral Highway and Kaladan Multimodal Transit Project aim to link India’s Northeast with Southeast Asia.  
  • Digital infrastructure and 5G collaboration are also emerging areas of focus 
• Defense and Counterterrorism Cooperation: India and ASEAN have intensified defense cooperation through military training, joint exercises, and intelligence sharing.  
  • Terror threats from radical extremism in Southeast Asia and India's concerns over cross-border militancy in the Northeast make counterterrorism a shared priority.  
  • Defense exports, including BrahMos missiles to the Philippines, signal a shift towards deeper military ties. 
  • India's defence exports surged by 78% in the first quarter of FY 2024-25, with ASEAN as a key market. 
• Energy Security & Green Transition: Both India and ASEAN are pushing for renewable energy cooperation, reducing fossil fuel dependency, and expanding clean energy investments.  
  • India’s International Solar Alliance (ISA) aligns with ASEAN’s Clean Energy Pathway. 
  • ASEAN nations are also exploring nuclear energy, where India can offer expertise in thorium-based reactors. 
• Space & Technology Collaboration: India’s advancements in space technology, AI, and digital governance present a strong area of cooperation with ASEAN.  
  • ASEAN nations are keen on leveraging ISRO’s satellite capabilities for disaster management and telecommunication.  
    • ISRO is helping ASEAN set up a Regional Satellite Tracking Station in Vietnam. 
  • India’s Digital Public Infrastructure (DPI) model, including Aadhaar and UPI, offers a template for ASEAN’s fintech expansion. 
• Tourism & Cultural Diplomacy: India and ASEAN share centuries-old cultural and religious linkages, including Buddhism and Hinduism.  
  • Strengthening people-to-people ties through visa liberalization, spiritual tourism, and cultural exchanges can boost engagement.  
  • Increased direct flights and tourism infrastructure development can further enhance connectivity. 
  • Indonesia’s Ramayana Ballet and Thailand's Ayutthaya city which is known as the "Ayodhya of Thailand" celebrate shared heritage. 
• Geopolitical Cooperation & Multipolarity: India and ASEAN are key players in regional stability, balancing US-China tensions.  
  • Both emphasize a rules-based order in the Indo-Pacific, avoiding military bloc politics while strengthening multilateralism through BRICS, EAS, and G20. 
    • India also backed ASEAN’s Five-Point Consensus on the Myanmar Crisis .

What are the Key Areas of Friction Between India and ASEAN?

• Trade Imbalance & RCEP Withdrawal: India has a trade deficit of over $43 billion with ASEAN, raising concerns over market access and unfair trade practices.  
  • India withdrew from the Regional Comprehensive Economic Partnership (RCEP) in 2019, citing concerns over Chinese goods flooding its market through ASEAN nations.  
  • India has called for FTA renegotiation to address tariff asymmetry and non-tariff barriers, but progress remains very slow.  
• Slow Progress in Connectivity Projects: Despite strategic importance, India’s connectivity projects with ASEAN face delays due to funding issues, political instability, and bureaucratic bottlenecks.  
  • The India-Myanmar-Thailand Trilateral Highway has been repeatedly postponed due to slow execution and unrest in Myanmar.  
  • Similarly, the Kaladan Multimodal Project, crucial for India’s Northeast connectivity, has suffered from security concerns and lack of progress.  
    • These delays impact India’s credibility in regional infrastructure development. 
• Limited Defense Cooperation & ASEAN’s China Tilt: While India and ASEAN conduct military exercises, ASEAN’s divergent security priorities and reluctance to counter China directly limit deeper defense engagement.  
  • Most ASEAN nations are hesitant to align with India’s Indo-Pacific vision due to economic dependence on China.  
  • ASEAN has not strongly supported India’s stance on freedom of navigation in the South China Sea. 
  • In 2023, trade between ASEAN and China reached a record high of USD 702 billion, while ASEAN-India bilateral trade stood at merely USD 122.67 billion during 2023-24, highlighting ASEAN’s economic reliance on China. 
• Differences in Indo-Pacific Strategy: India promotes an open and inclusive Indo-Pacific with a focus on ASEAN centrality, but ASEAN countries remain divided on openly endorsing India’s strategic goals.  
  • While Vietnam and the Philippines support India’s stronger Indo-Pacific presence, others like Cambodia prefer neutrality to avoid antagonizing China.  
  • This limits India’s ability to build a unified Indo-Pacific strategy with ASEAN as a whole. 
• Myanmar Crisis and Divergent Political Stances: India and ASEAN differ on their approach to Myanmar’s political crisis following the 2021 military coup.  
  • ASEAN has pushed for diplomatic engagement through its Five-Point Consensus, while India has maintained pragmatic ties with Myanmar’s junta due to border security and connectivity interests.  
  • This has created friction, as some ASEAN members view India’s approach as inconsistent with democratic principles. 
  • India handed over military hardware to Myanmar’s junta in 2022, while ASEAN imposed restrictions. 
• Digital Trade & Data Protection Issues: India and ASEAN differ on data localization, cybersecurity, and digital trade regulations, slowing fintech and e-commerce expansion.  
  • ASEAN prefers a liberal digital trade regime, while India enforces data sovereignty rules (e.g., restrictions on cross-border data flow under India’s Digital Personal Data Protection Act, 2023). 
  •  This has created regulatory mismatches affecting businesses in fintech, e-commerce, and AI collaborations. 
    • India’s UPI linkage with Singapore (2023) is an exception but remains limited to bilateral agreements. 

What Measures can be Adopted to Strengthen India-ASEAN Relations?  

• Fast-Track Connectivity Projects for Economic Integration: Accelerating the completion of the India-Myanmar-Thailand Trilateral Highway and Kaladan Multimodal Project will improve physical connectivity and trade.  
  • Establishing special economic zones (SEZs) along the corridor can attract investment and manufacturing, reducing ASEAN’s overdependence on China. 
  • India should engage ASEAN in Public-Private Partnership (PPP) models to overcome delays in execution.  
  • Strengthening air and maritime links, especially with Indonesia, Vietnam, and the Philippines, will further boost trade and tourism. 
• Strengthen the India-ASEAN Free Trade Agreement (FTA): Revising the India-ASEAN FTA to address India’s trade deficit and non-tariff barriers (NTBs) will enhance economic cooperation.  
  • India should push for sector-specific agreements in electronics, pharmaceuticals, and green energy where it has a competitive edge.  
  • ASEAN nations must ensure better market access for Indian goods, particularly in services, agriculture, and digital trade.  
  • Mutual recognition agreements (MRAs) for skilled professionals will facilitate greater labor mobility and knowledge exchange. 
    • India must ensure ASEAN removes discriminatory palm oil import tariffs hurting Indian exporters 
• Co-Develop Critical and Emerging Technologies: Instead of relying on tech imports, India and ASEAN should focus on joint development in AI, quantum computing, and semiconductor fabrication.  
  • India’s Digital Public Infrastructure (DPI) model (Aadhaar, UPI) can be adapted for ASEAN fintech ecosystems, ensuring digital sovereignty.  
  • ASEAN can be pursued to invest in India’s semiconductor mission, reducing dependence on China-Taiwan supply chains. 
  • India should push for joint space collaborations through ISRO for disaster management and communication satellites. 
• Expand Maritime Security and Defense Collaboration: India should deepen maritime security cooperation through expanded naval exercises, intelligence sharing, and joint patrolling.  
  • Strengthening India-ASEAN Coast Guard Cooperation can help counter piracy, illegal fishing, and drug trafficking in the Indo-Pacific.  
  • ASEAN nations should be encouraged to buy Indian defense equipment (e.g., BrahMos missiles) under favorable financing models.  
  • Establishing an India-ASEAN Indo-Pacific Security Forum can create a structured mechanism for strategic dialogue. 
• Foster Supply Chain Resilience through Co-Manufacturing: India should integrate ASEAN into its Production-Linked Incentive (PLI) scheme, encouraging ASEAN firms to set up manufacturing bases in India.  
  • Co-developing alternative supply chains in semiconductors, rare earth elements, and pharmaceuticals will reduce China’s dominance.  
  • ASEAN nations can be part of India’s Supply Chain Resilience Initiative (SCRI) with Japan and Australia, creating diversified trade networks. 
• Expand Renewable Energy and Climate Cooperation: India should lead ASEAN in green hydrogen, solar power, and biofuels, reducing dependence on fossil fuels. 
  • Establishing India-ASEAN Green Energy Parks will promote joint investments in solar and wind power generation.  
  • Facilitating technology transfers for EV battery production and carbon trading mechanisms will align with ASEAN’s net-zero goals. 
• Promote Cultural and People-to-People Exchanges: Enhancing cultural diplomacy through mutual visa liberalization, direct flight connectivity, and educational collaborations will strengthen ties.  
  • Establishing India-ASEAN scholarships, student exchange programs, and Buddhist tourism circuits will foster greater socio-cultural engagement.  
  • India can support ASEAN’s digitization of ancient manuscripts and historical archives to preserve shared civilizational heritage. 
  • The Nalanda University ASEAN Fellowship can be expanded for cultural research programs. 

Conclusion: 

India-ASEAN relations have evolved significantly from historical and cultural ties to a comprehensive strategic partnership. Despite challenges such as trade imbalances and differences in defense priorities, both sides have strengthened cooperation. Moving forward, addressing connectivity gaps, boosting trade, and fostering people-to-people exchanges will be crucial. India’s proactive engagement with ASEAN offers opportunities for deeper collaboration.