Why India needs to expand its engagement with ASEAN

Prime Minister Narendra Modi is visiting Laos to participate in the 14th India-ASEAN Summit and 11th East Asia Summit (EAS). He will be participating in the India-ASEAN Summit for the third time since assuming office of the Prime Minister of India in May 2014. With his recent visit to Malaysia, Singapore, Vietnam and China, and now Laos, Modi's diplomatic moves towards the East and Southeast Asia seem to be in full swing. PM Modi paid a state visit to Vietnam on September 3, 2016 and became the first Indian Prime Minister to do so in 15 years. After Vietnam, he visited Hangzhou in China to participate in the annual G20 Summit on September 4-5, 2016.

The year 2016 marks the 20th anniversary of the India-ASEAN full dialogue partnership and 14th anniversary of India-ASEAN summit level partnership. India's institutional engagement with ASEAN has been given shape with India's membership and participation in the ASEAN Regional Forum (ARF), East Asia Summit (EAS) and ASEAN Defence Ministers' Meeting (ADMM) Plus. India also interacts with several ASEAN member states in Mekong Ganga Cooperation (MGC) and the Bay of Bengal Initiative for Multisectoral Technical and Economic Cooperation (BIMSTEC) under the framework of subregional cooperation. Over the years, the scope of the India-ASEAN relationship under the Act East Policy has also expanded. ASEAN is not only seen as an important economic partner, it is also a key strategic partner grouping for India. Two decades of the Look East Policy, now renamed as Act East Policy by the Modi government, have brought some positive results for India in making ASEAN an important regional partner.

While New Delhi is investing time and effort to give a fillip to its relations with ASEAN, it still has miles to go before it can be equated with China. For one, the trade and economic ties are much below their potential. In 2015, India-ASEAN trade stood at US$ 58.7 billion. The set trade target of US$ 100 billion by 2015 could not be achieved. In fact, trade volume in 2015 decreased from US$ 67.7 billion in 2014. The trade figure is minuscule when compared to ASEAN's trade with China. ASEAN-China trade volume was US$ 472.16 billion in 2015; US$ 413.46 billion more than the India-ASEAN trade figure. Now, India is ASEAN's fourth largest trading partner. China is still the largest trading partner of the regional grouping, followed by the European Union and the United States. 

India's FDI in ASEAN is also low in comparison to China. While India's FDI to ASEAN was US$ 1.2 billion in 2015, China's FDI to ASEAN stood at a whopping figure of US$ 8.15 billion. Slow pace of implementation and lack of willingness to take risks has deterred India’s public sector enterprises and private companies from making substantive investments in the Southeast Asian region. 

Connectivity is at the core of India-ASEAN relations. It is important to integrate Northeastern India with the ASEAN region through road, rail and air links. As of now, there is no rail connectivity between India and the ASEAN region. Moreover, there are still no direct flights between India and several Southeast Asian nations. There again, lack of time-bound implementation of projects poses a huge challenge. For instance, the India-Myanmar-Thailand trilateral highway and Kaladan multimodal project, which would enhance connectivity between India and the ASEAN region, are still under process. 

It is beyond doubt that India has shown remarkable sincerely about its relations with ASEAN and its member countries. Progress of its relations with countries from the ASEAN region such as Singapore and Vietnam has been commendable. In April 2015, to step up its presence in the region and get more involved, India had established a separate Mission with an Ambassador to ASEAN and EAS in Jakarta, Indonesia. India has to travel more than half to get closer to countries such as Laos and Cambodia. Relations with Myanmar also need to be prioritised. 

While at the institutional level, the relationship is more or less on the right track, New Delhi needs to do a lot to strengthen people-to-people contacts. India has not yet utilised the potential of relations with the ASEAN countries to the fullest. Calibrated moves are also needed to synergise effort at the subregional level. Initiatives such as BIMSTEC and Mekong Ganga Cooperation should be injected with more vigour and “out of the box” ideas. Integration with ASEAN at multiple levels will facilitate India's strong positioning in the Southeast Asian region, and make it a more credible regional player; thereby contributing to India’s enhanced international standing.

Dr Rahul Mishra is a Research Fellow at the Indian Council of World Affairs, New Delhi. He can be reached at rahul.seas@gmail.com Views expressed are personal.

Shamshad A Khan is a Senior Researcher, Keio University, Japan