India-Southeast Asia Relations: Enhancing Mutual Benefits

Content from the Brookings Institution India Center is now archived. After seven years of an impactful partnership, as of September 11, 2020, Brookings India is now the Centre for Social and Economic Progress, an independent public policy institution based in India.

India’s engagement with Southeast Asia accelerated after the announcement of the Look East Policy (LEP) in the early 1990s. This is visible from the increase in bilateral trade, cross-border capital flows and people-to-people contact. India and ASEAN have upgraded their ties to a strategic partnership. India has also embedded deeper in the Southeast Asian regional architecture through trade and investment agreements with the ASEAN and individual Southeast Asian countries like Singapore and Malaysia. The Regional Comprehensive Economic Partnership (RCEP) being negotiated by the ASEAN, Australia, China, India, Japan, New Zealand and South Korea would integrate India deeper with the region.

The Modi government has upgraded the LEP to the ‘Act East’ strategy for deepening and widening engagement with the region. This might witness greater bilateral cooperation on various strategic and security issues. But in order to build a meaningful and lasting partnership with Southeast Asia, India must work on making existing initiatives more effective. Improving the quality of economic engagement is particularly significant in this regard given the importance of trade and commerce in the India-ASEAN relationship.

Getting the India-ASEAN services and investment agreement off the ground and improving the utilisation of existing free trade agreements (FTAs) will augment economic momentum. The Modi government must also work with Southeast Asian countries for facilitating transport transit and border trade for greater integration of the Indian industries in regional value chains. In the long term, a purposive ‘Act East’ strategy would require making the Indian diplomacy in the region more business-focused. The large Indian diaspora in the region should be utilised for the purpose.