“I can do things you cannot, you can do things I cannot; Together we can do great things.”
What is ASEAN?
The Association of Southeast Asian Nations, or ASEAN, was established by its Founding Fathers, namely Indonesia, Malaysia, Philippines, Singapore and Thailand with a view at promoting economic growth, social progress, educational and cultural development among the member nations. Apart from the founding members, this regional intergovernmental organization, includes 5 additional members namely, Brunei, Cambodia, Laos, Myanmar, and Vietnam. Since its inception, on 8th August 1967, the community is built on three pillars, the Political-Security, Economic integration and Socio-cultural development. Each pillar has its own Blueprint, and, together they form a roadmap for ASEAN community.
India-ASEAN Relations and Why is it important for India?
The relationship between the East Asian countries and India dates back to ancient times. However, with the advent of globalization, this relationship has garnered more importance as countries are becoming interdependent and interconnected, thus influencing their economies to a great extent.
The Asian Financial Crisis of 1997 gave a push to greater regionalism in Asia, after which the East Asian region realized the requirement of economic integrated participation to confront the difficulties postured by globalization and to support its economies. At that time it was difficult to perceive of an alliance where all major economies of Asia come together, compete and cooperate at the same time, thereby resulting in a mutually beneficial situation. But since then ASEAN economy has been growing and the bilateral relation between India and ASEAN have also been on an upturn.
ASEAN is of strategic importance for India as ASEAN nations are at the intersections of major land and sea routes, hence facilitating active collaboration on matters of common interest in the economic, social, cultural, technical, scientific and administrative fields. India and ASEAN are common accomplices in their want to make a free and comprehensive territorial design. They are dynamic members of the East Asia Summit (EAS), ASEAN Regional Forum (ARF), ASEAN Defense Ministers Meeting Plus (ADMM-Plus), and the Expanded ASEAN Maritime Forum (EAMF).
ASEAN countries look towards India as a counterbalancing force in front of China when disputes regarding territorial claims relating to the South China Sea arise.
THE THREE PILLARS – ECONOMIC COOPERATION, SOCIO-CULTURAL COOPERATION, POLITICAL- SECURITY
India and ASEAN together account for about one-third of the global population with a GDP of nearly $3.8 trillion making them the third largest economy in the world.
Since early 2000’s, India ASEAN’s bilateral trade has been increasing steadily, with trade in 2014-15 reaching $76.58 billion from $44 billion in 2009-10 and $7.4 billion in 2001-02.
However, this is also being accompanied by a rising trade deficit which is a concern for India.
The top export items from India to ASEAN are Petroleum oils(15%), meat products(10%). Others items being transport equipment, chemicals, mechanical appliances, non-ferrous metals, iron and steel and pharmaceuticals.
The top Imported items are petroleum oils, palm oils, coal briquettes, chemicals, electrical and electronic equipment, plastic and raw material.
One major step towards a deeper economic integration was the India- ASEAN Free Trade Agreement (FTA) which was signed in 2009 and came into effect on January 1, 2010. This led to a tariff liberalization of 90% of the products traded between the regions including products like palm oil, coffee, pepper and black tea.
Lately, India is encouraging participation from the ASEAN members towards projects like “Make in India”, “Skill India”, “Smart Cities”. It is also seeking investment in infrastructure, trade, agriculture, manufacturing and urban renewal.
India has entered into several bilateral agreements with the ASEAN member countries like the Mekong-Ganga cooperation, BIMSTEC.
The India-ASEAN socio-cultural relation is not a present-day affair, rather it dates back to the prehistoric period. India & ASEAN enjoy a shared heritage & civilization linkages with“Hinduism” having a significant impact in some of the ASEAN countries. By the 1st century AD, Indian merchants had begun bringing Hinduism and Buddhism across the sea influencing the development of kingdoms and empires like Srivijaya in Sumatra and the Majapahit in Java, Bali and the Philippine archipelago.
The 3 Cs pivotal for a brighter future of the association is COMMERCE, CONNECTIVITY & CULTURE.
A connected ASEAN-India is a priority for India as well as ASEAN countries as it is a booster for all the economies in the connected chain. For that, there have been initiatives taken in the field of science & technology, education, health & pharmaceuticals, transport, infrastructure, agriculture, small enterprising units, tourism, information & communication technology.
The two projects that have seen significant progress to complement the connectivity of ASEAN-India are the India-Myanmar-Thailand trilateral highway and Kaladan Multimodal project.
Additional initiatives have now been taken towards air connectivity among the India-ASEAN countries. A line of credit of US $ 1 billion was announced by Prime Minister Narendra Modi in 13th ASEAN India summit for projects that promote Digital & Physical connectivity in India-ASEAN countries. Another Rs. 500 crores had been announced for the development of manufacturing hubs in Cambodia, Vietnam, Myanmar, and Laos.
In order to further promote people to people connected development, exchange programs between students, officials & diplomats are being organized among India-ASEAN countries to bridge the gap of knowledge among the people of two regions.
The easiest way of increasing interaction between people of two countries is by promoting tourism. There was an increase of 7.49% in tourism from 3.07 million arrivals from ASEAN to India in 2015 to 3.3 million arrivals in 2016. To further enhance this increase in tourism from ASEAN a MoU was signed between India & ASEAN at the third meeting for the greater strengthening of the tourism among the nations.
India’s change in the policy of “LOOK EAST” to “ACT EAST” by Prime Minister Narendra Modi in 2014 has, one of its most significant pillars as, its relations with ASEAN countries. Frequent meetings are held by ministers and bureaucrats from both the sides throughout the year, to discuss on collaborative & development related ideas benefitting both the sides.
Besides this, top ministers from individual nations meet annually to give strength to personal relations shared by each country, a great example for the same is the decision by India to strengthen its relations with the four least developed economies of ASEAN- Cambodia, Lao PDR, Myanmar & Vietnam. India & ASEAN became summit partners in 2002 & strategic partners in 2012.
Defence & security are as vital as connectivity or cultural cooperation among countries, for that India has very strong vibrant defense relations with some of the ASEAN countries. Regular joint military operations are held along with meetings among the navy counterparts. The Navy, in this case, has been the most active due to the maritime geographical location of India & ASEAN. The sea lanes have to protected from non-traditional threats such as piracy & smuggling as well as extremism & terrorism.
To cater to this concern India & ASEAN have been holding bilateral & joint naval maritime patrolling. Some of the initiatives from India would be holding army to army levels exercises with member Thailand & according to an artillery firing range for practice to Singapore.
India & ASEAN relations are vital because of an ongoing increasing assertiveness of China for its territorial claim of oil & gas-rich South China Sea, thereby creating tension on a significant international trade route.
China’s rising economy gives all the more reason for ASEAN as well as Indian economy to collaborate to have a balanced power in the entire region.
India-ASEAN relations have grown remarkably since 2002 and there is immense potential to grow further. The bilateral trade is expected to rise up to over $200 billion by 2025. But there are concerns for the Indian economy too. Though our trade has been increasing, comparing this with China’s existing trade with ASEAN, which stands at $345 billion as compared to India’s $58 billion in 2015.With the trade agreements in effect, the increased market access for India in the ASEAN countries is not as great as compared to the market access they get in India.
Since early 2000’s, India has had its imports from ASEAN exceeding its exports, like by more than $14 billion in 2015-16. Also, cheaper products like palm oil and groundnut are hurting the local producers in India.
However, FTA in services could help reduce the trade deficit, as we have a competitive advantage over them in healthcare, IT, education and consultancy services. Apart from the economic and social integration, it serves as a platform to formulate the ‘The Act East Policy’ thus having an edge over emerging power rivalries and also, a fastener of peace, prosperity, and stability in the Asian region.