Strengthening India-ASEAN Relations through Act East Policy

GS PAPER II: INTERNATIONAL RELATIONS

INDIA–ASEAN & ACT EAST POLICY

India’s partnership with the Association of Southeast Asian Nations (ASEAN) lies at the heart of its Act East Policy—a strategic framework aimed at strengthening economic, cultural, and security ties across the Indo-Pacific. As the 47th ASEAN Summit convenes in Kuala Lumpur in 2025, India’s efforts to enhance trade, connectivity, and regional cooperation acquire renewed momentum.

1. Background of India–ASEAN Relations

India became a Sectoral Dialogue Partner of ASEAN in 1992 and a Full Dialogue Partner in 1996, marking the beginning of a dynamic regional partnership. Over the decades, this relationship has matured into a Strategic Partnership anchored in mutual goals of peace, prosperity, and connectivity.

Today, ASEAN serves as one of India’s most significant economic partners, representing a combined GDP exceeding USD 4.5 trillion and bilateral trade crossing USD 110 billion in 2024–25.

2. Trade and Economic Linkages

The ASEAN–India Free Trade Agreement (AIFTA), implemented in 2010, continues to shape economic engagement. Despite ASEAN being India’s fourth-largest trading partner, the trade balance remains skewed in ASEAN’s favour, largely due to India’s import of crude oil, palm oil, electronic goods, and chemicals.

Recent AIFTA reviews aim to:

• Prevent trade diversion from third-country origin products.
• Streamline tariff reduction and remove non-tariff barriers.
• Expand market access for Indian agricultural and pharmaceutical exports.

3. Connectivity and Infrastructure Projects

Physical connectivity remains a crucial challenge despite strong diplomatic and trade engagement. Two landmark projects highlight India’s infrastructure ambitions:

India–Myanmar–Thailand Trilateral Highway: This corridor connects Moreh (Manipur) to Mae Sot (Thailand), promising smoother road connectivity across Southeast Asia.

Kaladan Multi-Modal Transit Transport Project: Linking Kolkata Port to Mizoram through Myanmar, it aims to enhance land–sea trade routes and regional logistics.

Once operational, these projects could extend connectivity to Cambodia, Laos, and Vietnam—realizing the vision of a Mekong–India Economic Corridor.

4. Strategic Dimension and Security Cooperation

ASEAN occupies a central place in the Indo-Pacific architecture. India’s Act East Policy complements its SAGAR Vision (Security and Growth for All in the Region) by promoting:

• Freedom of navigation and maritime security cooperation.
• Counterterrorism and cybersecurity collaboration.
• Partnerships in sustainable blue economy and disaster resilience.

Through ASEAN-led forums such as the East Asia Summit and the ASEAN Regional Forum, India actively contributes to shaping a rules-based Indo-Pacific order.

5. Emerging Challenges

• Connectivity bottlenecks: Slow progress in cross-border highway and maritime projects.
• Trade imbalance: Persistent deficit due to structural factors and limited market access.
• Institutional inertia: Bureaucratic delays and weak private-sector integration hinder growth.

6. The Way Forward

To strengthen and future-proof India–ASEAN relations, the following steps are crucial:

• Fast-track infrastructure and connectivity projects through joint funding models.
• Integrate the Act East Policy with India’s Indo-Pacific Oceans Initiative (IPOI).
• Enhance cooperation in renewable energy, digital economy, and innovation ecosystems.
• Boost people-to-people linkages through tourism, education, and cultural exchanges.

Synopsis (75 words)

India’s partnership with ASEAN forms the cornerstone of its Indo-Pacific engagement. Despite strong economic and diplomatic ties, infrastructure gaps remain the biggest challenge. Prioritizing connectivity, digital collaboration, and maritime security can transform the Act East Policy into a robust Indo-Pacific framework that fosters sustainable, rule-based regional integration and mutual growth.