Celebrating fifty years this year, ASEAN has a combined GDP of US$2.4 trillion – making it the third largest economy in Asia.
Twenty five years ago, shortly after India launched its ‘Look East Policy’, the country began to play an active role in ASEAN’s development by becoming a sectoral dialogue-partner. This year, India and ASEAN member countries have agreed to take relations to even greater heights.
Bilateral trade between India and ASEAN stands at approximately US$70billion. ASEAN is currently India’s fourth largest trading partner, accounting for 10.2 percent of India’s total trade. Currently India is ASEAN’s seventh largest trading partner; however a target of at least US$200billion in two-way trade has been agreed by 2022.
India is also urging the early conclusion of the Regional Comprehensive Economic Partnership (RCEP). This proposed Free Trade Agreement (FTA) between ASEAN member countries and India, China, Japan, South Korea, Australia and New Zealand aims to achieve a high level of tariff liberalisation to boost trade. Together these economies account for approximately forty per cent of the world’s GDP.
India’s influence on Southeast Asia began thousands of years ago through its culture and philosophy. Buddhism originated from ancient India and has influenced many other nations and schools of thought in Asia and around the world.
‘We have a 5000-year-old civilization with an amazing philosophy’, explains India’s Minister of Tourism and Culture, KJ Alphons.
The ministry wants more people to experience the Indian ‘Buddhist Circuit’ which follows the life of Siddhartha Gautama, better known as Buddha.
‘We share many of the same philosophies as our neighbours and we should meet more often and work together more closely’, says Alphons.
India’s reinvigorated engagement with ASEAN member countries is a direct result of the government’s ‘Act East Policy’, a cornerstone of Prime Minister Sri. Narendra Modi.
The country’s development agenda includes the smart-cities urban modernization mission and has attracted investors from ASEAN; specifically Singapore. Companies such as Ascendas-Singbridge and Sembcorp Development are providing smart-city solutions encompassing construction, energy and environmental protection.
‘Improving infrastructure, especially roads, power-grids and railways, is undoubtedly the best way of ‘crowding-in’ private investment’, says Sandeep Jajodia, president of India’s leading trade association Assocham.
India is poised to become the world’s third-largest consumer market by 2025 and the country’s service-oriented economy complements ASEAN manufacturing strengths. Investment flows between India and ASEAN member countries are already apparent in banking and finance, pharmaceuticals, information technology and business process outsourcing industries.
‘The entire world economy is looking towards India as investment hub and through the efforts of Prime Minister Sri.Narendra Modi, India has strengthened its global presence and we have significantly improved our international economic relations’, says Jajodia.
As India continues to prosper, ASEAN investors can look forward to tremendous opportunities in the fastest growing economy in the world.