November 11, 2020
The 3Cs – Cooperation, Collaboration and Commitment have helped India strengthen its partnerships with ASEAN countries.
Indo-ASEAN Agreements are currently spread across policy reforms, streamlining regulatory hurdles, and boosting investments.
Areas of Indo-ASEAN bilateral interest include services and telecommunications.
Emerging areas of interest include chemicals, food and beverage, and healthcare
Despite the massive economic losses that COVID 19 has caused, the Indian economy is quickly getting back on its feet, backed by factors such as dynamic and progressive policy making and rapid digitalisation. This is a trend that we seem to be seeing across the Association of South-East Asian Nations (ASEAN) which comprises Indonesia, Singapore, Philippines, Malaysia, Brunei, Thailand, Cambodia, Lao PDR, Myanmar and Vietnam. Factors such as a rise in domestic demand, availability of skilled workforce, growing urbanisation, digital evangelisation, and the practice of prioritising trade for better economic stability have helped boost growth in these economies.
There has been steady growth in India-ASEAN trade and investment relations. ASEAN is India’s fourth largest trading partner. India’s trade with ASEAN stood at US$ 81.33 billion, which makes up about 10.6% of India’s overall trade. India’s export to ASEAN stand at 11.28% of total exports.
Over the years, there have been a few roadblocks such as geopolitical security concerns, trade barriers, restrictions on labour mobility etc. While India and ASEAN have not been able to harness their full trade potential in the past due to variety of reasons, the time has come to change that. Given the common growth aspirations and other regional similarities, India can certainly leverage trade policies around ASEAN collaboration to drive greater growth. The ASEAN region forms a key pillar in shaping India’s foreign policy. It lies at the heart of India’s Act East Policy.
The 3Cs – Cooperation, Collaboration and Commitment have helped India strengthen its partnerships with ASEAN countries and boost business ties. With the easing of trading norms, India has set an ambitious target of a whopping US$300 billion trade generated through ASEAN. For instance, there is tremendous potential for India to increase trade with Japan in areas such as artificial intelligence, digital transformation, and healthcare. Recently, key leaders in India and Singapore voiced similar sentiments during a recent roundtable discussion in collaboration with International Business Division (IBD) and Singapore Indian Chamber of Commerce and Industry (SICCI), as a part of the Economic Times Global Business Summit 3.0.
Boosting Ties With ASEAN Nations
The Niti Aayog’s Export Preparedness Index (EPI) 2020 report issued in partnership with the Institute of Competitiveness evaluates export preparedness on parameters such as Policy, Business Ecosystem, Export Ecosystem and Export Performance. The findings indicate that the Indian economy carries immense potential to strengthen its exports. India’s Export Preparedness Index (EPI) stands at a commendable 39 out of 100. Given this, India is well-placed to strengthen relationships in the ASEAN region and boost exports.
India’s exports of goods and services (1988 – 2018)
Source: Niti Aayog’s Export Preparedness report 2020
In the recent past, factors such as a growing labour force, younger demographics, bilateral and multilateral agreements, intra – regional trade, rising middle class, growing disposable income and flexible policies have acted as key drivers for ASEAN – India collaboration.
India has signed several bilateral agreements with ASEAN countries on areas such as policy reforms, streamlining regulatory hurdles, and boosting investments.
Sectors such as services, telecommunications, computer software & hardware, construction development, automobiles and drugs and pharmaceuticals have traditionally contributed to India’s exports in ASEAN. Now, there is growing interest in other sectors such as chemical industry, dood and beverage, and healthcare too.
Also, given the cyber security threats and increased dependency on digital technologies amid the COVID – 19 pandemic, strengthening cyber security measures is one of the important cornerstones for ASEAN – India collaboration.
Looking into the Future
The Indian Government is working on solutions for a better future for ASEAN – India partnerships. Measures such as comprehensive air and maritime transport agreements for improved connectivity, mutual recognition of regulations to simplify movement between countries, and liberalisation of non – tariff measures will certainly help.
Given the crisis incurred by COVID – 19, seamless cooperation between India and ASEAN nations would help realise the potential opportunity and prepare the region for global uncertainties. The markets could be highly subjected to Global disruption and trade wars continue to hijack the world trade balance. Let’s build a resilient ASEAN – India partnership to plan for a bright future.