Prime Minister Narendra Modi's recent visit to ASEAN nations aims to bolster India's "Act East" policy, which emphasizes the development of strategic and economic partnerships in Southeast Asia. This visit underscores India's commitment to reconnecting with ASEAN countries, centering on trade, defense, and technological collaboration.
The ASEAN region holds significant importance for India's strategic interests due to its geographic positioning, acting as a bridge between East and South Asia. Countries like Brunei and Singapore maintain strategic ties with both the US and China, which is crucial for India's diplomatic and trade strategies, particularly within the Indo-Pacific context.
India's trade with ASEAN countries has experienced substantial growth, reaching USD 98.39 billion in 2022-23, up from USD 56.4 billion in 2012-13. However, trade with Brunei has declined, primarily due to India's increasing oil imports from Russia since 2022, which has reduced its energy dependence on Brunei.
During the visit, discussions highlighted key areas of cooperation, such as semiconductor manufacturing in Singapore and space cooperation with Brunei. For example, Brunei might host an ISRO station, while Singapore's involvement in the global semiconductor supply chain is expected to aid India in developing its chip-making capabilities.
Semiconductor cooperation between India and Singapore is vital, as Singapore contributes approximately 11% to the global semiconductor equipment market. India seeks to collaborate with Singapore to enhance its semiconductor manufacturing capabilities and reduce its reliance on China.
The Regional Comprehensive Economic Partnership (RCEP) is significant for India, which opted out in 2019 due to concerns over trade imbalances. India feared that participating in RCEP could harm local industries by increasing imports.
To strengthen its economic ties with ASEAN, India must maintain consistent engagement and reevaluate existing trade agreements, including the 2009 ASEAN-India Trade in Goods Agreement (AITIGA) and the 2005 Comprehensive Economic Cooperation Agreement (CECA) with Singapore. Enhancing these agreements could improve bilateral trade, which made up 11.3% of India’s overall foreign trade in 2022-23.
India faces several geopolitical challenges in the ASEAN region, particularly regarding its stance on issues like Myanmar, the South China Sea disputes, and its collaboration with the Quad. Better coordination with ASEAN's interests is essential for India to enhance its regional influence.
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