By:Mr. Ahmed Moustafa
Egyptian Economist and International Youth Coach
Director of Asia Center for Studies and Translation
https://www.linkedin.com/in/ahmed-moustafa-27422814/
Asia Center for Studies and Translation – Directed by Ahmed Moustafa (wordpress.com)
Master Holder in Political Economy 2021, HSE Moscow
Member of CODESRIA, Dakar, Senegal, and Group of Strategic Vision
Russia and Islamic World, Journalists Against Extremism
Cellphone: +201009229411
Email: solimon2244@yahoo.com
ahmedmoustafa830@gmail.com
Introduction
The Association of South-East Asian Nations (ASEAN) is one of Asia’s most important regional organizations that seeks to promote regional economic and political integration. India, on the other hand, is the most populous nation in the South Asian region and is the third-largest economy by purchasing power parity. India’s economic growth has often been referred to as the “Indian Miracle”, and its growth has been of keen interest to other countries in the region and beyond. In recent years, India and ASEAN have made significant steps towards forming a closer partnership through various bilateral and multilateral initiatives. This paper will discuss the recent developments in India and ASEAN’s relations, focusing on the areas of economic and political cooperation.
The economic relations between India and ASEAN are exemplified by numerous bilateral and multilateral initiatives. The India-ASEAN Free Trade Agreement (AIFTA) signed in 2009 provides preferential market access to goods and services from both sides. In addition, the 2007 India-ASEAN Agreement on Services and Investment offers improved investment facilitation and regulation. In line with their commitment to regional integration, India and ASEAN have also launched several regional initiatives, such as the ASEAN-India Trade in Services and Investment Agreement (AITSIA) in 2012, the ASEAN-India Network of Think-Tanks in 2013 and the ASEAN-India Free Trade Area in 2018.
Political cooperation between India and ASEAN has deepened in the past decade. The Indian Prime Minister’s ‘Look East’ policy has been a key driver for this process. In 2014, India and ASEAN celebrated 25 years of dialogue partnership. This partnership has been consolidated through the ASEAN-India Commemorative Summit in 2012, the ASEAN-India Maritime Summit in 2015, and the ASEAN-India Dialogue Partnership Summit in 2018. Moreover, India has emphasized the importance of multilateralism and has conducted joint military exercises with ASEAN countries, most notably the India-Vietnam joint naval exercise, which is aimed at strengthening regional maritime security.
The volume of trade between ASEAN and India and the main fields thereof
The trade between ASEAN and India has grown significantly, reaching an estimated value of $100 billion in 2020. The main sectors of trade between the two regions include manufacturing, services, agriculture, energy cooperation, and education and healthcare. ASEAN countries have a strong manufacturing base, while India is known for its expertise in the textile, pharmaceutical, and automotive industries. The digital economy has led to increased trade in IT, software development, telecommunications, healthcare, and tourism. India’s large English-speaking population has made it a preferred outsourcing destination for ASEAN companies, further enhancing trade relations.
Agriculture is another significant field of trade, with ASEAN countries producing rice, palm oil, rubber, and seafood products, while India exports spices, fruits, and vegetables. Energy cooperation between ASEAN and India has been crucial, with ASEAN countries investing in energy infrastructure and exploration, while India is a major consumer of these resources. Trade in education and healthcare services has also gained prominence, with India’s reputation as a hub for affordable higher education and medical tourism. This trade has strengthened bilateral ties, led to cultural exchange, and increased people-to-people connectivity.
The Indian PM Modi’s proposal via ASEAN and India Summit 2023
Indian Prime Minister Narendra Modi proposed an initiative during the 2023 ASEAN and India Summit to strengthen the relationship between the Association of Southeast Asian Nations (ASEAN) and India. The proposal aims to enhance India’s influence and expand its economic and strategic interests in Southeast Asia, leading to greater economic opportunities and regional stability. It also emphasizes the need for increased trade and investment cooperation, as both countries have experienced economic growth.
The proposal also emphasizes the importance of cultural exchange and people-to-people connectivity, as both regions have a rich heritage and diverse cultures. It promotes tourism, educational exchanges, and cultural collaborations to foster mutual understanding and strengthen bonds. The proposal also aims to enhance security cooperation to address evolving regional challenges, such as maritime security concerns, terrorism, and non-traditional security threats. This cooperation can involve intelligence sharing, joint military exercises, and capacity-building measures, contributing to regional stability and ensuring the safety of their respective populations.
Main issues focused on between India and ASEAN in 2023’s summit
Economic complementarities
One of the main issues discussed between India and ASEAN in the recent dialogue was the potential for economic complementarities between them. India is already heavily investing in ASEAN countries such as Indonesia, Malaysia, and Vietnam. With the emergence of the ASEAN Economic Community (AEC), India and ASEAN discussed the potential for further investments and collaborations in the economic sector. This would not only increase economic growth and development but also boost trade and other economic activities between them.
Investments
Another key issue discussed between India and ASEAN in the recent dialogue is the potential for increased investments between both countries. India and ASEAN have been looking for ways to increase mutual trade and investments, while also exploring new ways of doing business together. India and ASEAN decided to strengthen their ties further through proposed investments in infrastructure, energy, agriculture, and other industries.
Security
In the recent India-ASEAN dialogue, the issue of security was addressed in regard to the burgeoning public security challenges in Southeast Asia. India and ASEAN agreed to coordinate and cooperate in the field of public safety and work together to combat terrorism, cybercrime, transnational organized crime, and illegal trafficking. They also discussed ways to enhance maritime security in the region.
India & ASEAN Cooperation in IT, AI, and Payment Systems
India and ASEAN have been fostering economic growth and technological advancements, creating a conducive environment for collaboration in IT, AI, and payment systems. IT collaboration has been a key driver, with Indian IT companies expanding their presence in ASEAN countries and ASEAN nations outsourcing IT projects. AI advancements have also been a focus, with joint research projects and knowledge-sharing programs between universities and research institutions.
India’s expertise in payment systems, particularly the Unified Payments Interface (UPI), has been leveraged by ASEAN countries to establish interoperability between ASEAN payment systems and UPI. This collaboration aims to facilitate seamless cross-border transactions and enhance financial inclusion, promoting economic integration between India and ASEAN.
The partnership offers mutual benefits, including access to emerging markets and a larger customer base, while ASEAN economies benefit from India’s technical expertise. The future prospects of this collaboration are promising, as technological advancements will bridge the digital divide, increase efficiency, and stimulate economic development.
Does India want to replace China in cooperation with ASEAN?
Since its entry in 2017, ASEAN (Association of Southeast Asian Nations) has become an increasingly important center of regional cooperation among East and Southeast Asian countries. India has recognized the potential of ASEAN and is looking to further develop strong economic and diplomatic relationships with the 10 member states, making it a major priority for India’s foreign policy efforts. One possible result of these efforts is that India could end up replacing China as a major partner for ASEAN.
India and ASEAN
India’s relationship with ASEAN is rooted in a shared history. The two sides have had strong diplomatic relationships since the 1950s and India was among the first countries to establish a formal diplomatic mission to ASEAN. India is also currently involved in the ASEAN-India Partnership program and the India-ASEAN Free Trade Area agreement. These agreements, along with other initiatives, demonstrate India’s commitment to strengthening its ties with ASEAN.
Indian Prime Minister Narendra Modi has personally made strengthening ties with ASEAN a major priority, having attended the ASEAN summit every year since taking office. India has proposed initiatives such as the establishment of an India-ASEAN community, increased trade and investment between the two sides, and increased regional integration of infrastructure and energy investments. As a result, India has greatly improved its profile among ASEAN nations, making it an attractive partner for the region.
China’s Relationship With ASEAN
China has had a long-standing relationship with ASEAN. Over the past two decades, it has become one of the major trading partners for ASEAN and has become increasingly prominent in the region’s economic and diplomatic spheres. China’s influence on ASEAN has become more visible in recent years, with President Xi Jinping attending multiple ASEAN summits and proposing initiatives such as the Belt and Road Initiative (BRI) to foster stronger economic and diplomatic relationships.
However, China’s presence in the region has also been a source of concern for some ASEAN members due to concerns of China’s rising power and potential for authoritarianism. This has led to increased tensions between ASEAN nations and China, with some members calling for greater cooperation with other nations in the region such as India.
Can India Replace China with ASEAN?
India has certainly made great strides in its relationship with ASEAN, but is it enough to replace China? On the economic front, India is not yet as competitive as China in terms of investments and trade. India’s trade with ASEAN has lagged behind China’s and its investments in the region have largely been confined to infrastructure projects. India does have the potential to increase their investments and trade with ASEAN in the long term, but it is unlikely to be able to compete with China in the near future.
India has made some headway in its diplomatic presence in ASEAN. Prime Minister Modi has attended numerous ASEAN summits and proposed initiatives such as the India-ASEAN Free Trade Area agreement. In addition, India has made efforts to build closer cooperation with ASEAN on issues such as counterterrorism and maritime security. However, many ASEAN members remain skeptical of India’s intentions, raising questions about the reliability and sustainability of a closer India-ASEAN relationship.
ASEAN and Indo-Pacific Initiative
ASEAN and the Indo-Pacific is a region that includes some of the world’s fastest-growing economies, home to the world’s most populous countries, and one of the most geopolitically dynamic regions in the world. In recent years, the initiative of ASEAN and the Indo-Pacific has become a central focus for the United States and other regional players.
Overview of the Initiative
ASEAN and the Indo-Pacific initiative seek to promote regional economic integration and to ensure peace and stability throughout the region. This initiative is an important part of the U.S.’s strategic “rebalancing” effort to focus on the Asia-Pacific region as a whole. The various components of the initiative include the ASEAN Economic Community (AEC); maritime and geostrategic security; capacity-building efforts; and the Trans-Pacific Partnership (TPP) trade agreement.
The ASEAN Economic Community (AEC)
The ASEAN Economic Community (AEC) is a major component of the ASEAN and the Indo-Pacific initiatives. This initiative seeks to remove non-tariff barriers and promote economic integration, encouraging foreign direct investment, as well as deepening economic and trade links between ASEAN countries. This initiative will also help to strengthen ASEAN’s regional integration efforts and make ASEAN more attractive to businesses from outside the region.
Maritime and Geostrategic Security
The ASEAN and the Indo-Pacific initiative also seeks to promote the peaceful resolution of disputes in the region and ensure maritime and geostrategic security. This includes efforts to ensure freedom of navigation, open access to maritime resources, and the security of critical maritime infrastructure. It also seeks to encourage further regional collaboration and cooperation, particularly in areas such as intelligence-sharing, maritime domain awareness, and maritime security.
Capacity Building Efforts
The ASEAN and the Indo-Pacific initiative also seek to increase regional capacity-building efforts in the fields of health, economics, and security. This includes efforts to coordinate regional infrastructure projects, support regional trade agreements, and encourage greater access to education. It also seeks to increase regional development through the support of small and medium-sized businesses and to encourage the development of a regional digital economy.
The Trans-Pacific Partnership (TPP)
The Trans-Pacific Partnership (TPP) is another major component of the ASEAN and the Indo-Pacific initiative. This trade agreement seeks to encourage greater trade and investment between the signatories, which include the United States, Australia, and most of the ASEAN countries. The TPP seeks to promote fair labor and environmental standards, reduce tariffs and other barriers to trade, and open up additional markets for signatories.
Challenges
The ASEAN and the Indo-Pacific Initiative face a number of challenges in achieving their goals. These include the lack of effective coordination between the countries involved in the initiative, the need to ensure that the initiative’s efforts are not hijacked by individual countries or groups of countries for their own narrow purposes, and the ever-present threat of regional conflicts between the countries in the region.
Which initiative does the ASEAN prefer Silk Road or Indo-Pacific?
ASEAN, a regional organization of ten Southeast Asian countries, has been a subject of debate over whether to adopt the Silk Road or the Indo-Pacific Initiative. The Silk Road, also known as the Belt and Road Initiative (BRI), is proposed by China to promote economic connectivity and development between Asia, Europe, and Africa. It could create jobs, enhance connectivity, and improve economic growth for ASEAN’s developing nations. The Indo-Pacific Initiative, developed by the United States, aims to enhance cooperation and security in the region by promoting freedom of navigation, rule of law, and respect for international norms. ASEAN’s primary goal is to ensure peace, stability, and prosperity in the region, so it may prefer a combination of both initiatives. ASEAN values its non-alignment tradition and actively engages with major powers to maintain a balanced and harmonious regional environment. This approach allows ASEAN to pursue its own interests and leverage its position as a regional organization.
To conclude, India and ASEAN have made significant strides in their economic and political ties, with the signing of the AIFTA and AITSIA, launching regional initiatives, and numerous dialogues and summits. The increased connectivity between the two countries has enabled them to benefit from wide-ranging opportunities in trade, investment, and security. The trade figure between ASEAN and India has experienced significant growth in various fields, such as manufacturing, services, agriculture, energy cooperation, and trade in education and healthcare.
India and ASEAN are taking measures to cultivate a stronger and more sustainable partnership, fostering economic growth and development in both regions. However, India’s economic power and diplomatic presence in the region are not as strong as China’s, and concerns remain among ASEAN members about India’s intentions and ability to sustain a closer relationship.
The ASEAN and the Indo-Pacific initiative is a major strategic effort to promote regional economic integration, increase cooperation, and ensure peace and stability in the region. ASEAN’s preference for either the Silk Road or Indo-Pacific Initiative depends on various factors, including economic opportunities, strategic interests, and regional geopolitical realities.
India and ASEAN’s partnership in IT, AI, and payment systems represents a significant step towards harnessing the potential of digital technologies for sustainable economic growth. The collaboration between these two regions ensures the exchange of knowledge, resources, and expertise, contributing to the development of both economies.
