With bilateral merchandise trade reaching US$128 billion in 2025–26, the partnership is entering a new phase of commercial engagement. The ongoing review of the ASEAN–India Trade in Goods Agreement (AITIGA) offers an important opportunity to address trade imbalances, improve market access, strengthen trade facilitation, and unlock the next phase of mutually beneficial economic growth.

India and the Association of Southeast Asian Nations (ASEAN) share longstanding relations rooted in geographical proximity, historical ties, cultural exchanges and growing economic cooperation. Over the years, these relations have evolved beyond conventional diplomacy into a comprehensive economic partnership spanning trade, investment, manufacturing, technology, connectivity and regional security.

ASEAN holds an important place in the global economy, linking major international markets through its manufacturing capabilities, trade networks and strategic maritime routes. For India, the region is a significant export destination, a key source of industrial inputs and energy resources, and a gateway to the wider Asia-Pacific economic landscape.

Strong Expansion in Bilateral Trade

The implementation of AITIGA has substantially expanded merchandise trade between India and ASEAN. Bilateral trade rose from approximately US$56 billion in 2010–11 to US$128 billion in 2025–26, reflecting the growing commercial interdependence between the two economies.

India's exports to ASEAN rose from US$26 billion to US$38 billion during this period, while imports grew from US$31 billion to US$90 billion. This overall expansion shows the growing integration of Indian businesses with Southeast Asian markets and production networks.

The latest official data place bilateral trade at US$128 billion in 2025–26, with ASEAN accounting for 10.55% of India's total global trade. Bilateral trade has more than doubled since the implementation of AITIGA, underscoring Southeast Asia's growing importance in India's international trade, although at a comparatively slower pace than imports. This indicates considerable scope to strengthen the competitiveness and market penetration of Indian products across ASEAN economies.

Imports from ASEAN have grown significantly, reflecting India's rising demand for energy resources, industrial raw materials, machinery, electronics and intermediate goods. These imports also support domestic manufacturing and industrial production. The next phase of the partnership must therefore focus on expanding exports, diversifying India's product basket and ensuring a more balanced, mutually beneficial trading relationship.

Trade Diversification and CommercialComplementarities

The composition of India–ASEAN trade highlights the complementary nature of their economic relationship. Merchandise trade encompasses petroleum products, engineering goods, machinery, electronics, chemicals, pharmaceuticals, agricultural commodities and other manufactured products.

Major Indian exports to ASEAN include petroleum products such as motor gasoline and automotive diesel fuel, reflecting India's refining capabilities and export potential; agricultural and food products, including boneless bovine meat and other commodities, highlighting opportunities for India's agricultural and food-processing industries; and metals and industrial products, including aluminium ingots and other manufactured materials, supporting industrial demand across Southeast Asian markets. Engineering and manufactured goods: machinery, engineering products, chemicals and pharmaceuticals, offering opportunities for greater penetration of ASEAN's expanding industrial and consumer markets.

Major imports from ASEAN during 2025–26 include energy resources: steam coal, cooking coal and crude petroleum, supporting India's energy and industrial requirements. Edible oils: crude palm oil and refined palmolein, contributing to India's food-processing and edible-oil supply chains. Industrial inputs: machinery, electronics, chemicals and intermediate goods, supporting domestic manufacturing and industrial development.

This trade composition demonstrates that India and ASEAN have considerable economic complementarities. India's strengths in petroleum refining, pharmaceuticals, engineering, agricultural products and manufacturing can complement ASEAN's capabilities in electronics, energy, industrial production and regional distribution networks.

However, greater export diversification remains important. Indian businesses need to explore emerging opportunities in processed foods, pharmaceuticals, automotive components, electrical machinery, chemicals, digital services and other value-added products. Strengthening product quality, competitiveness, branding and compliance with international standards can help Indian enterprises expand their presence across ASEAN markets.

ASEAN as a Strategic Supply-Chain Partner for India

ASEAN has become an important partner in India's efforts to diversify international supply chains and strengthen domestic manufacturing capabilities. Its regional production networks provide access to essential industrial inputs, energy resources, machinery, electronics and intermediate products.

For India, these imports are not merely part of merchandise trade; they also support domestic industries, manufacturing operations and downstream export activities. The growing importance of supply-chain resilience has become particularly relevant amid global economic uncertainties, geopolitical disruptions and shifting patterns of international production. Businesses increasingly seek diversified sourcing destinations, reliable logistics networks and alternative manufacturing locations. India and ASEAN can jointly explore opportunities across electronics, automotive, semiconductors, renewable energy, pharmaceuticals, chemicals, food processing and advanced manufacturing.

Greater integration of production networks can enable Indian companies to participate more effectively in regional value chains, while ASEAN enterprises can benefit from India's expanding domestic market, skilled workforce, industrial infrastructure and rising consumer demand. The partnership also offers opportunities for MSMEs. Improved access to regional markets, technology partnerships, supplier networks and cross-border business collaboration can help smaller enterprises integrate into international production systems.

Investment, Connectivity and Emerging Areas of Cooperation

Beyond merchandise trade, India and ASEAN have considerable potential to deepen their economic partnership through investment, infrastructure development, technology and connectivity. Improved physical and digital connectivity can significantly reduce transport costs, facilitate cross-border commerce and strengthen business-to-business engagement. Better integration of ports, shipping networks, road corridors and logistics infrastructure can facilitate the movement of goods and services across the region.

Investment cooperation also offers considerable opportunities across manufacturing, renewable energy, electric mobility, digital infrastructure, financial services, pharmaceuticals and emerging technologies. India's expanding industrial ecosystem and ASEAN's established manufacturing and export networks create opportunities for complementary investment. Indian companies can explore greater participation in Southeast Asian markets, while ASEAN investors can benefit from India's expanding consumer market, infrastructure development and manufacturing opportunities.

Digital transformation is another promising area. Cooperation across fintech, digital payments, artificial intelligence, information technology, cybersecurity and digital public infrastructure can create new business opportunities and boost productivity. Similarly, collaboration in renewable energy, green manufacturing, energy efficiency and sustainable infrastructure can help achieve the region's long-term economic and environmental objectives.

The Way Forward

India and ASEAN should prioritise balanced trade expansion, stronger regional value-chain integration, joint manufacturing and greater MSME participation. Enhanced cooperation in artificial intelligence, digital technologies, pharmaceuticals, semiconductors and renewable energy can unlock new opportunities. A modernised AITIGA, with transparency, predictable market access and effective implementation, will further strengthen economic engagement. Robust institutional mechanisms, investment partnerships and regular industry interactions can transform bilateral trade relations into a comprehensive, resilient and mutually beneficial economic partnership.

India–ASEAN economic relations are entering a pivotal phase of transformation. Bilateral merchandise trade of US$128 billion in 2025–26 reflects Southeast Asia's growing importance within India's global trade architecture. The expansion of trade from approximately US$56 billion in 2010–11 to US$128 billion in 2025–26 demonstrates the potential of sustained economic cooperation. At the same time, the changing composition of trade and the widening gap between exports and imports underline the need for greater diversification and improved market access.

India and ASEAN should increasingly position themselves as complementary economic partners across manufacturing, technology, energy, infrastructure and international supply chains. Stronger connectivity, institutional cooperation and greater private-sector participation will be critical to achieving this objective.