Deciphering the 19th ASEAN-India Summit

Published on Nov 13, 2022 01:34 PM IST

The article has been authored by Prabir De, professor, Research and Information System for Developing Countries (RIS), New Delhi and coordinator, Asean-India Centre (AIC).

This year’s summit is remarkable on three counts. (https://www.outlookindia.com/)
This year’s summit is remarkable on three counts. (https://www.outlookindia.com/)
ByHindustan Times

The Association of South East Asian Nations (Asean) and India had the 19th Summit to commemorate the 30th Anniversary of Asean-India dialogue relations on November 12, 2022 in Phnom Penh, Cambodia. This year’s summit is remarkable on three counts.

First, the relationship is now elevated to comprehensive strategic partnership (CSP) level. A decade ago, the 2012 Commemorative Summit endorsed the Strategic Partnership (SP) between India and Asean. Ten years later, the relationship is now upgraded to the CSP. The Asean signed the CSP with China and Australia last year. Asean and India issued a joint statement highlighting what the CSP offers. If one compares the two documents, the one issued in 2012 and the one in 2022, there is not much difference in approach. The 2012 strategic elevation was guided by 26 points, whereas the 2022 CSP is by 24 points. Given the unfolding geo-political development, this CSP is going to play a major role in guiding the relations forward, provided the people at the help nurture it passionately. Asean and India are bound together by their shared history and culture, and therefore, relations with the Asean continue to be the cornerstone in India’s foreign policy. There is no looking back.

Second, for the first time, the Indian delegation was headed by the vice-president, which was a correct decision. The Asean Summits do not need high level political participation. Several high-level political leaders attended it. This is because many of them are on an Asia tour to attend: the COP27, Asean Plus Summit, the APEC and G20. One flight, four stops!

Third, Indo-Pacific has gained the centre stage. Asean has issued the leaders’ declaration on mainstreaming four priority areas of the Asean outlook on the Indo-Pacific within Asean-led mechanisms. This is nothing but to clearly recognise Indo-Pacific as a reality moving ahead. India’s strategic position in the Indian Ocean and IPEF-membership makes it an essential economic power. Asean, on the other hand, has appreciated India’s support for Asean’s centrality in the evolving regional architecture and its continued contribution to regional peace, security, and prosperity and to Asean integration and the Asean community building process.

Both Asean and India have been reeling under the post Covid-19 pandemic complications. Coupled with several global uncertainties, the post-pandemic challenges for the Asean and India continue to take its toll. All face medium to heavy economic downsides. There remains a significant degree of uncertainty over the severity and duration of the global outbreak and the trajectory of the global economy. With the global economic landscape shift, Asean and India need to work more closely to explore new sources of growth and prosperity. While the CSP is not a document to show a path of prosperity, the strategic objectives need to be matched with economics. Without stronger economic engagements, strategic relations do not last long.

Following the set of agenda requires serious push. First, Asean and India must reinforce the trade and investment relations. Since the free trade agreement (FTA) in goods came into effect between Asean and India in 2010, the trade between them has almost doubled to reach over $ 87 billion in 2019-20 and then declined to $ 79 billion in 2020-21 due to pandemic-driven slowdown. Driven by imports, India’s trade with Asean has grown faster than India’s trade with the world. India faces significant non-tariff barriers in Asean that also limit its export with the Asean. Although trade growth both in India and Asean, in recent months has faltered due to the Covid-19 pandemic and the trade policy uncertainties, there is still untapped potential for further enhancing Asean-India trade. Harmonisation of standards and regulations and mutual recognition of conformity assessment and reduction of border procedures is important for facilitating preferential market access between Asean and India. Upgrading the Asean-India FTA (AIFTA) and its effective utilisation may perhaps add the required momentum to the bilateral trade flows while promoting sustainable and inclusive growth for both Asean and India.

India’s Trade with Asean

2010-11

(US$ billion)

2021-22

(US$ billion)

Growth (2010-11 to 2021-22) (%)

Export

25.63

42.33

5.15

Import

30.61

68.07

8.32

Balance of Trade

-4.98

-25.75

17.85

Note: *compound annual growth rate (CAGR)

Source: Author’s calculation based on Export-Import Data Bank, Department of Commerce, India

Second, another great opportunity to scale up the Asean-India engagements is the development of market-driven production networks. The pandemic has disrupted the supply chain networks and the supply of intermediate inputs and final goods across the world has been distrusted disproportionately. Current engagement in value chains between Asean and India is not substantial. Some of the sectors that hold promise in value chains between Asean and India are electrical equipment, industrial machines, automobiles, pharmaceuticals, power generating machines and telecommunications. Asean and India can leverage the emerging scenario and support each other to build new and resilient supply chains. However, to explore this opportunity, Asean and India must upgrade the skilling, improve logistics services and strengthen the transportation infrastructure.

Third, investment reform is another challenge for both India and Asean. To deal with such a challenge, particularly in this pandemic time, Asean and India should cooperate towards designing appropriate policies, simplifying investment regimes and streamlining investment processes to further strengthen the value chain and investment linkages. Business and economic cooperation between India and Asean in areas of mutual interest such as financial technology (FinTech), connectivity, start-ups, and innovation, empowerment of youth and women and the development of micro, small and medium enterprises (MSMEs) is an important driver to move up the Asean-India relations to a higher plateau.

Fourth, the CSP joint statement has extended space for connectivity. For India, the ‘Connecting the Connectivities’ may play out well if and only if the overall architecture is benign and serve as a basis for regional infrastructure cooperation. We should not forget our Northeast when we talk about connectivity with Asean. Somehow, the CSP joint statement missed the importance of the Northeast.

Fifth, we agree that socio-cultural issues in Asean–India relations assume special significance. The 10 Asean States are mere cultural replications of 29 Indian states and Union Territories. Our cultural approach to Asean must be inclusive and broad-based.

To conclude, a stronger Asean-India partnership would strengthen multilateralism, which is at the moment facing a great survival challenge. Moving from SP to CSP, addressing the regional challenges and appropriate solutions together, leaving aside narrow differences, is what we need and what we need to respect.

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