India-Asean ties: A cup half full?

Despite the great strides made, India-Asean relations have not measured up to expectations. There continue to be significant asymmetries in this expanding engagement.
The India-Asean engagement has made impressive strides over the past 25 years, starting with a modest sectoral dialogue partnership in 1992, a full dialogue partnership in 1995, a summit partnership in 2002 and a strategic partnership in 2012.The invitation to all 10 Asean heads of state/government as chief guests for India’s 68th Republic Day celebrations will mark yet another and even more significant upgrade of the relationship. All 10 Asean leaders will be present which reflects the importance they attach to the relationship. The unprecedented nature of the collective invitation extended to leaders of a regional grouping, in turn, reflects the Indian intent to highlight the priority it attaches to its South East Asian neighbourhood. Despite this record, one must acknowledge that India-Asean relations have not measured up to expectations. There continue to be significant asymmetries in this expanding engagement.

One, political relations have outpaced the economic, commercial, cultural and people to people relations. The India-Asean trade is currently only US$ 71 billion and has been declining since reaching a peak of US$80 billion in 2011-12. The Asean-China trade by contrast is US$450 billion. It is unlikely that the trade target of US$ 200billion for 2020 will be met. Despite more than 22% of India’s cumulative outward FDI being located in Asean and 2,000 Indian companies being present in Asean countries, India’s profile is modest when compared to China and Japan. In 2016 India invested US$ 1 billion in Asean as compared to US$ 10 billion by China. Only Singapore is a major investor in India responsible for a cumulative total of about US$ 30 billion and this constitutes more than 98% of the Asean total. While India and Asean have concluded an Agreement on Goods, Services and Investment, gains have been modest. India is reluctant to conclude the Regional Cooperative Economic Partnership (RCEP) which would constitute a mega trade agreement among Asean countries, India, China, Japan, ROK, Australia and New Zealand, mainly due to apprehensions over China swamping the Indian market. Lack of physical connectivity between India and South-East Asia continues to be a major constraint and even the few like the Kaladan Multi-modal Transport Corridor through Myanmar’s Rakhine province and the India-Myanmar-Thailand trilateral highway have been inordinately delayed.This will further limit the prospects for expanding India-Asean trade and commercial relations.
Two, relations with select Asean countries such as Singapore have advanced more significantly than with others. Singapore, Malaysia and Thailand are India’s major trade partners in the grouping and efforts to diversify trade among other countries have not really succeeded. There is also a glaring imbalance in terms of connectivity. There are more than 400 flights a week between Indian cities and Singapore. The figure is 200 flights a week with Malaysia and Thailand respectively. In comparison, there are no direct flights between India and the largest and most important country in Asean, Indonesia. Similarly there are regular shipping links between Indian ports and Singapore and Klang (Malaysia) but few or none at all with other ports in the region. Despite longstanding and intimate cultural and historical links between India and South-East Asia and efforts to revive them, people-to-people relations remain sparse though Bollywood is a strong presence across the region.

Three, security relations including in the critical maritime domain have lagged behind overall political relations. Security cooperation with a few Asean countries is much stronger than with the rest. Asean countries would welcome an enhanced Indian maritime presence in the South China Seas as a hedge against an assertive China and to allay anxieties over prospects for a reduced US security commitment to the region. At the same time, they do not wish to be caught in an India-China cross-fire just as they fear the consequences of a sharpened confrontation between US and China. India will have to do some careful tightrope walking even as it expands its security profile in the region. In this context it will be important for India to consider carefully what it sees as the role for Asean in the evolving Indo-Pacific security architecture and the Asia-Africa Economic Corridor both of which are being promoted by India and Japan but supported by the US and Australia. The same question would arise on the revival of the “Quad” which envisages a much tighter security relationship among India, Japan, Australia and the US. Both these seek to constrain Chinese unilateralism. While avoiding being closely associated with these initiatives for fear of alienating China, Asean countries may welcome them discreetly. How should this discretion be ensured in practical though not formal terms? These developments will also impact on another consistent principle India has followed since declaring its Look East (now Act East) policy- acknowledging the centrality of Asean in the shaping of emerging economic and security architecture in the region. Will this remain relevant?
A frank and substantive dialogue on these issues with Asean leaders assembled in Delhi would be most useful. A major effort is required on both sides to address the asymmetries that persist in our relations. Otherwise the cup will also appear to be half full.