ASEAN Summit 2025 – Strategic Importance For India

The 47th ASEAN Summit concluded in Kuala Lumpur on October 28, 2025. ASEAN now includes 11 countries, including the recent addition of Timor Leste. India participated actively with Prime Minister Narendra Modi addressing virtually and External Affairs Minister S Jaishankar attending in person. The summit took place amid global trade tensions, especially between the US and China, making ASEAN’s role crucial for regional stability and economic growth.

ASEAN’s Evolution and Economic Significance

ASEAN began in 1967 as a political alliance against communism. It has since transformed into a major economic bloc. Intra-ASEAN trade ranges between 25% and 30%, second only to the European Union. The region’s rapid economic growth makes it one of the most dynamic markets worldwide. ASEAN countries also coordinate closely, often speaking with a unified voice on global matters.

Geopolitical Importance for India

ASEAN lies at the heart of the Indo-Pacific, a region where global economic power is shifting. India conducts 40-50% of its trade through ASEAN countries. The area faces security challenges, including China’s territorial claims in the South and East China Seas. ASEAN’s location and influence make it vital for India’s strategic and economic interests.

Connectivity and Historical Linkages

India’s Act East Policy focuses on strengthening ties with ASEAN. Projects like the India-Myanmar-Thailand Trilateral Highway and the Kaladan Multi-Modal Transit Transport Project enhance connectivity to Southeast Asia. These initiatives aim to improve trade routes and regional integration. India also shares deep cultural and historical ties with ASEAN nations, which provide a foundation for stronger cooperation.

Challenges within ASEAN

ASEAN faces internal difficulties, such as democratic backsliding in Myanmar. The group has not effectively challenged China’s expansive claims in the South China Sea, despite opposition from some members and other regional powers. ASEAN’s preference for consensus limits its ability to confront contentious issues decisively.

India-ASEAN Trade Relations

India-ASEAN free trade agreement was signed in 2009. However, India faces disadvantages as ASEAN countries had low tariffs before the deal, limiting market access benefits for India. Meanwhile, ASEAN countries gained from India’s tariff protections, allowing Chinese goods easier entry into India. This imbalance partly explains India’s decision to stay out of the Regional Comprehensive Economic Partnership (RCEP). The ongoing review of the trade agreement aims to address these issues by the end of 2025.

Lessons for Regional Cooperation

ASEAN’s success contrasts with challenges faced by South Asian groupings like SAARC, which struggles due to political tensions. Other regional forums like BIMSTEC and BBIN offer more potential for cooperation. India can learn from ASEAN’s steady and consistent efforts over decades. Focus on groups excluding Pakistan and China could yield better regional integration and economic growth.

Future Prospects for India and ASEAN

India can leverage its strengths in trade, manufacturing, technology, and fintech to assist smaller ASEAN economies. Engagement must be sustained and focused. Joining trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) could benefit India more than RCEP. ASEAN remains a key partner in India’s strategy to become a regional leader.

Questions for UPSC:

1. Critically discuss the strategic and economic significance of the Indo-Pacific region for India’s foreign policy.
2. Examine the challenges and opportunities in India’s regional connectivity projects like the India-Myanmar-Thailand Trilateral Highway and Kaladan Multi-Modal Transit Transport Project.
3. Analyse the impact of free trade agreements on India’s domestic industries and regional trade dynamics. Point out the reasons behind India’s decision not to join the Regional Comprehensive Economic Partnership (RCEP).
4. Estimate the role of regional organisations such as ASEAN and SAARC in promoting economic integration and political stability in South and Southeast Asia. How can India leverage these platforms for its neighbourhood policy?

Answer Hints:

1. Critically discuss the strategic and economic significance of the Indo-Pacific region for India’s foreign policy.

1. Indo-Pacific is the new center of global economic gravity, crucial for trade and investment flows.
2. India conducts 40-50% of its trade through Indo-Pacific, denoting economic dependence on the region.
3. Strategically, the region faces security challenges due to China’s assertiveness, especially in South China Sea disputes.
4. ASEAN’s location in Indo-Pacific makes it a key partner for India’s Act East Policy and regional influence.
5. Connectivity projects aim to integrate India’s Northeast with ASEAN, enhancing strategic depth and market access.
6. Maintaining balance between US and China interests in Indo-Pacific is vital for India’s geopolitical autonomy.

2. Examine the challenges and opportunities in India’s regional connectivity projects like the India-Myanmar-Thailand Trilateral Highway and Kaladan Multi-Modal Transit Transport Project.

1. These projects improve physical connectivity, linking India’s Northeast to Southeast Asian markets and ports.
2. They enhance regional integration, trade facilitation, and strategic outreach in the Indo-Pacific.
3. Challenges include difficult terrain, infrastructure gaps, and political instability in Myanmar.
4. Funding and timely implementation remain concerns due to complex multinational coordination.
5. Successful completion can reduce dependency on China-centric routes and boost India’s Act East ambitions.
6. They also encourage people-to-people ties and cultural linkages strengthening diplomatic relations.

3. Analyse the impact of free trade agreements on India’s domestic industries and regional trade dynamics. Point out the reasons behind India’s decision not to join the Regional Comprehensive Economic Partnership (RCEP).

1. India-ASEAN FTA (2009) had limited benefits as ASEAN tariffs were already low; India’s higher tariffs protected domestic industries.
2. FTA led to trade imbalance, with ASEAN countries gaining market access while India faced import surge, including Chinese goods routed via ASEAN.
3. Domestic sectors feared competition from cheap imports, risking jobs and industrial growth.
4. India’s refusal to join RCEP was due to concerns over market access, safeguarding sensitive sectors, and lack of adequate protections.
5. India demands a fair, balanced agreement addressing tariff asymmetries and non-tariff barriers.
6. Ongoing review of India-ASEAN trade agreement aims to rectify imbalances and improve trade benefits for India.

4. Estimate the role of regional organisations such as ASEAN and SAARC in promoting economic integration and political stability in South and Southeast Asia. How can India leverage these platforms for its neighbourhood policy?

1. ASEAN is a successful, cohesive economic bloc with high intra-regional trade and unified diplomatic voice.
2. SAARC struggles due to political conflicts, especially India-Pakistan tensions, limiting regional cooperation.
3. Other groupings like BIMSTEC and BBIN offer more practical cooperation by excluding Pakistan and focusing on development.
4. India can leverage ASEAN for trade, connectivity, and strategic partnerships under Act East Policy.
5. Consistent engagement and focus on non-contentious platforms can enhance India’s leadership in neighbourhood integration.
6. India’s strengths in technology, manufacturing, and services can support smaller neighbours’ growth, encouraging goodwill and stability.