Eastern hedge: On the need for India to stay closely engaged with ASEAN members

India needs to build closer ties with ASEAN for economic and strategic reasons 

September 09, 2023 12:20 am | Updated 08:40 am IST

Prime Minister Narendra Modi’s whistle-stop summit sojourn to the Indonesian capital of Jakarta earlier this week was primarily aimed at deepening India’s engagement with the economically significant grouping of 10 Southeast Asian nations. Coming on the eve of India’s hosting of the G-20 summit in New Delhi as the current holder of the bloc’s presidency, Mr. Modi’s presence at the annual ASEAN-India summit was an opportunity to cement traditional ties with the neighbouring Asian economies at a time of heightened global trade uncertainty. As the trade facilitation body UNCTAD noted in its June 21 ‘Global Trade Update’, the ‘outlook for global trade in the second half of 2023 is pessimistic as negative factors’ including downgraded world economic forecasts, persistent inflation, financial vulnerabilities and geopolitical tensions dominate. Against this backdrop, the joint leaders’ statement on ‘Strengthening Food Security and Nutrition in Response to Crises’ at the ASEAN-India summit underscores the shared vulnerability the region perceives in the face of the ongoing heightened global food insecurity, which has been exacerbated by the war in Ukraine, climate change and national policy responses to inflationary pressures. India’s recent curbs on export of rice have triggered some alarm, with the prices of the regional staple reportedly nearing a 15-year high. The onset of an El Niño, which is historically associated with disruptive weather events, queers the ground further, and ASEAN leaders are justifiably wary.

Mr. Modi’s pitch, laying stress on the need for a rules-based post-COVID-19 world order and a free and open Indo-Pacific, was clearly directed at members among the Asian bloc who are increasingly disquieted by China’s recent muscle flexing and claims over the South China Sea. The Prime Minister’s not-so-veiled message to the ASEAN members is that India is a more reliable long-term strategic and economic partner, which has no territorial ambitions that could discomfit them. India also sought to position itself as a voice to amplify the concerns of the Global South, stressing that it would be mutually beneficial for all. For India, grappling as it is with an underwhelming free trade agreement (FTA) with the 10-nation grouping, trade ties with the eastern economies have grown in volume but asymmetrically, with imports far outpacing the country’s exports. The widening trade deficit and the perception that Chinese goods are taking advantage of lower tariffs under the FTA to find their way into the Indian market, have among other factors precipitated a review of the pact that is likely to be completed in 2025. In the meantime, India needs to stay closely engaged with the ASEAN members both as a trade hedge against the slowdown in its main western markets and to highlight its significance as an all-weather ally.

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