The year 2022 would mark thirty years of India-ASEAN relations, which continues to be shaped by the changing geo-political environment and new priorities. The 18th ASEAN-India Summit held in October is significant as it outlines a new path for the partnership. The paper discusses two key areas of partnership which are the converging interests in the Indo-Pacific and enhancing economic cooperation. This would help advance regional peace and security which would be crucial for the post-pandemic recovery.
Emerging Areas of Convergence
Convergence in the Indo-Pacific
At the 18th ASEAN-India Summit held on October 28, 2021, significant progress was made in terms of the strategic partnership through the implementation of various programmes and activities across the three ASEAN Community pillars[i], based on the ASEAN-India Plan of Action (POA), 2021-2025. The joint statement of the Summit highlighted the need for deeper cooperation on trade and investment while also exploring new opportunities in the field of Science, Technology, and Innovation (STI), Information and Communication Technology (ICT), Blue Economy, and digital economy to promote a sustainable economic recovery. The Summit “...also welcomed the adoption of the ASEAN-India Joint Statement on Cooperation on the ASEAN Outlook on the Indo-Pacific (AOIP) for Peace, Stability, and Prosperity in the Region as a means to explore and promote practical cooperation with India in the ASEAN priority areas as identified in the AOIP and to strengthen the ASEAN-India Strategic Partnership for achieving peace and prosperity in the region...”[ii]
Prime Minister (PM) Modi in his address at the Summit emphasized on building synergies between India’s Indo-Pacific Ocean Initiative (IPOI) and the AOIP.[iii] The IPOI announced by PM Modi at the 14th East Asia Summit on November 4, 2019, proposes to build a cooperative and collaborative framework amongst interested States to ensure a safe, secure, and stable maritime domain. The IPOI identifies seven basic facets of maritime cooperation and collaboration. These are (1) Maritime Security; (2) Maritime Ecology; (3) Maritime Resources; (4) Capacity Building and Resource Sharing; (5) Disaster Risk Reduction and Management; (6) Science, Technology and Academic Cooperation; and (7) Trade Connectivity and Maritime Transport. The cooperative framework envisaged through the IPOI shares complementarities with the AOIP’s broad areas of cooperation which includes maritime cooperation, connectivity, the United Nations Sustainable Development Goals 2030, and economic and other areas of cooperation. The synergy between the IPOI and AOIP which stresses on building partnerships for free trade and sustainable use of marine resources would enhance the scope of cooperation which would be crucial in the post-pandemic economic recovery.[iv] The ASEAN-India POA for 2021-25, envisages greater cooperation in areas ranging from trade to maritime security. Further, building on the complementarities between the IPOI and AOIP would be crucial in the post-pandemic period to ensure faster and better recovery and promote sustainable growth.
Building on the Economic Cooperation
As indicated in Figure 1, India’s total trade volume with ASEAN has grown from US$ 5.8 billion in 1996 to US$ 78.9.9 billion in 2020. India’s export to ASEAN has grown at a rate of five percent between 2010 and 2020 in which Singapore, Malaysia, Indonesia, Thailand, and Vietnam constitute the major share. While the overall economic relation between India and ASEAN has been in an upward trajectory, there have been some major challenges that need to be addressed. While India’s exports have increased, imports have witnessed much higher growth. India’s imports from ASEAN have been growing faster than exports since 2006 and post the 2009 FTA. With reference to Figure 1, in 2020, India’s import from ASEAN was US $ 47.4 billion while export was US $ 31.4 billion.
Figure 1: India's Trade with ASEAN: 1996-2020 (Figures in USD Million)
Source: Department of Commerce, Government of India
The increasing asymmetry in the balance of trade for India has raised concerns. India and ASEAN are currently undertaking a review of the ASEAN-India Trade in Goods Agreement (AITIGA). India’s PM, while addressing the ASEAN Summit in Bangkok in November 2019, welcomed the outcome of the 16th ASEAN Economic Ministers (AEM)-India Consultations which agreed to review the FTA. This according to him will make the economic links stronger and also make trade more balanced.[v] In a written reply to the Rajya Sabha on November 29, 2019, India’s Commerce and Industry Minister, Piyush Goyal had stated that the proposed scope of the review of the ASEAN-India FTA would “…include implementation issues, rules of origin; verification process and release of consignments; customs procedures; to take into account other negotiations on further liberalisation of trade in goods; and sharing and exchange of trade data".[vi]
At the recently concluded 18th ASEAN-India Summit, both sides “…welcomed the full ratification of the ASEAN-India Investment Agreement by all Parties and the implementation of the ASEAN-India Trade in Services Agreement by all Parties...”[vii] It was also agreed to further strengthen the economic relations by undertaking “..the review of the FTA in goods to make it more user-friendly, simple, trade facilitative for businesses that are supportive of sustainable and inclusive growth...”[viii] The Summit highlighted the significance of connectivity as a key element that would drive the India-ASEAN economic partnership as it ensures inclusive growth across the countries that are part of the connectivity network. India has consistently maintained that connectivity with ASEAN is central to its ‘Act East’ Policy and has built its connectivity agenda in line with the implementation of the Master Plan on ASEAN Connectivity (MPAC) 2025[ix]. ASEAN has welcomed India’s offer of US $ 1 billion special funds in order to support physical and digital connectivity.[x] The India-ASEAN partnership should continue to prioritise and promote physical and digital connectivity which would have a direct impact on the services activities and services trade across the region which would be crucial for post-pandemic recovery.
For a post-pandemic recovery, a stable and peaceful environment is a necessary condition to help promote development and growth. India has been a strong supporter of ASEAN centrality, and accepts the positive role that ASEAN plays in the regional security architecture. Since the establishment of the ASEAN-India relations in 1992, the relations have continued to receive major impetus from both sides which has helped enhance the partnership. The establishment of the ASEAN-India strategic partnership in 2012 has further enabled stronger cooperation in the area of security including in the maritime space. Given the ongoing geo-political churn being witnessed in the Indo-Pacific along with the priorities to ensure a post-pandemic recovery, India and ASEAN need to advance their cooperation by building on the emerging convergences.
*Dr. Temjenmeren Ao, Research Fellow, Indian Council of World Affairs, New Delhi.
Disclaimer: Views expressed are personal.
[i] At the 12th ASEAN Summit in January 2007, the Leaders’ signed the Cebu Declaration through which the ASEAN Community was established comprising of three pillars, namely the ASEAN Political-Security Community, ASEAN Economic Community and ASEAN Socio-Cultural Community.
[ii] “Chairman’s Statement of the 18th ASEAN-India Summit 28 October 2021”, ASEAN, October 28, 2021, https://asean.org/wp-content/uploads/2021/10/70.-Final-Chairmans-Statement-of-the-18th-ASEAN-India-Summit.pdf, Accessed on November 29, 2021.
[iii]“Remarks by Prime Minister Shri Narendra Modi at the 18th India-ASEAN Summit”, Ministry of External Affairs, October 28, 2021, https://mea.gov.in/Speeches-Statements.htm?dtl/34423/Remarks+by+Prime+Minister+Shri+Narendra+Modi+at+the+18th+IndiaASEAN+Summit, Accessed on November 29, 2021.
[iv]Pradeep Chauhan, Prabir De, Sarabjeet Singh Parmar, and DurairajKumarasamy, “Indo-Pacific Cooperation: AOIP and IPOI”, AIC Working Paper, No 3, October 2020, http://aic.ris.org.in/sites/default/files/Publication%20File/AIC%20Working%20Paper%20October%202020.pdf, Accessed on October 14, 2020.
[v]Dipanjan Roy Chaudhury, “ASEAN may soon conclude review of FTA with India”, The Economic Times, November 6, 2019, https://economictimes.indiatimes.com/news/politics-and-nation/asean-may-soon-conclude-review-of-fta-with-india/articleshow/71932278.cms, accessed on June 10, 2020.
[vi]“India-ASEAN FTA review: Further liberalisation of trade on agenda”, Business Standard, November 29, 2019, https://www.business-standard.com/article/pti-stories/india-asean-fta-review-could-include-further-liberalisation-of-trade-in-goods-119112901018_1.html, Accessed on November 30, 2021.
[vii]“Chairman’s Statement of the 18th ASEAN-India Summit 28 October 2021”, ASEAN, October 28, 2021, https://asean.org/wp-content/uploads/2021/10/70.-Final-Chairmans-Statement-of-the-18th-ASEAN-India-Summit.pdf, Accessed on November 29, 2021.
[ix] The vision for the MPAC 2025 is to achieve a seamlessly and comprehensively connected and integrated ASEAN that will promote competitiveness, inclusiveness, and a greater sense of Community. MPAC 2025 will focus on five strategic areas to achieve this vision: sustainable infrastructure, digital innovation, seamless logistics, regulatory excellence, and people mobility. See:// https://asean.org/wp-content/uploads/2018/01/47.-December-2017-MPAC2025-2nd-Reprint-.pdf
[x]“Chairman’s Statement of the 18th ASEAN-India Summit 28 October 2021”, ASEAN, October 28, 2021, https://asean.org/wp-content/uploads/2021/10/70.-Final-Chairmans-Statement-of-the-18th-ASEAN-India-Summit.pdf, Accessed on November 29, 2021.