New Delhi’s renewed focus on the ASEAN region reflects a forward-looking and pragmatic vision.

Southeast Asia, with its rising economic dynamism, strategic location, and diversified partnerships, presents India with an unparalleled opportunity to expand trade, deepen economic integration, and fortify its place in global value chains.

Southeast Asia’s growing centrality in India’s external trade vision

Southeast Asia has rapidly become one of the world’s most promising economic zones, boasting a combined GDP of over USD 2.5 trillion and offering sustained growth at a time when many global markets face stagnation.

Its significance extends beyond economic strength. The region hosts some of the world’s most critical sea lanes, through which more than half of global merchant shipping and a third of international maritime traffic pass every day.

These sea routes form the connective tissue linking the Indian Ocean and Persian Gulf to the industrial hubs of Northeast Asia, making ASEAN indispensable in global commerce.

For India, the region’s economic promise aligns naturally with its strategic interests.

ASEAN’s transformation to a central pillar of Asia’s economic and diplomatic architecture underscores its ability to operate as a bridge across geopolitical divides.

The region’s active partnerships with major global powers—including Japan, South Korea, China, the United States, Russia, Australia, New Zealand, and India itself—demonstrate its commitment to diversification and strategic autonomy.

This mirrors India’s own doctrine and provides fertile ground for deeper cooperation.

The longstanding civilisational ties between India and Southeast Asia are well-known, rooted in centuries of Hindu and Buddhist cultural exchange. But in recent years, these historical links have been complemented by economic and strategic synergy.

Under the Act East Policy, India has prioritised connectivity, commerce, and deeper regional integration, building upon the earlier Look East framework.

The region’s openness to diversified economic engagement has further enabled India to reinforce its presence and position itself as a natural partner.

A renewed push for trade connectivity and strategic alignment

As India recalibrates its global trade strategy, Southeast Asia has emerged as a natural destination for renewed collaboration.

India’s manufacturing strength, expanding digital economy, and growing innovation ecosystem offer strong complementarities with ASEAN’s industrial networks.

The region’s production hubs, particularly in electronics, automotive manufacturing, and advanced technology, are increasingly aligned with India’s economic priorities.

The emerging trade model between India and ASEAN is shifting toward one based on complementarity rather than competition.

This approach allows both sides to leverage their strengths, integrate more deeply into global value chains, and reduce shared vulnerabilities arising from over-dependence on any single country.

India’s decision to opt out of RCEP highlighted its cautious approach to large plurilateral trade frameworks, but it did not diminish its commitment to ASEAN. On the contrary, it has paved the way for a more customised, interest-based alignment that offers flexibility and strategic depth.

India’s role in Southeast Asia’s production systems is steadily expanding. The rise of Vietnam as a global manufacturing powerhouse—particularly in electronics, semiconductors, household appliances, and luxury goods—has created new pathways for India’s export diversification.

Indian machinery, electrical equipment, pharmaceutical ingredients, chemicals, and auto components already supply Vietnam’s industrial units, reinforcing a mutually beneficial trade dynamic.

Similar complementarities are emerging with Thailand in the automotive, pharmaceutical, and chemicals sectors, and with Indonesia in electric mobility, renewable energy, and metals processing.

Strengthening India’s role in ASEAN value chains

India’s evolving position as a provider of high-quality intermediate goods marks a strategic shift that enhances its role in global supply chains.

By supplying essential components and raw materials to ASEAN’s industrial clusters, India is increasing its relevance in the region’s production networks while also helping both sides ascend the global value chain.

This transition offers significant long-term benefits: it expands India’s export portfolio, boosts manufacturing competitiveness, and strengthens India’s integration with fast-growing markets.

Moreover, the tariff structures in ASEAN markets offer Indian exporters competitive access that can help overcome potential barriers in other global regions.

This advantage, combined with India’s production-linked incentive (PLI) schemes and rising domestic manufacturing capacity, positions Indian businesses to scale up and diversify their export destinations meaningfully.

India’s expanding role in the region also complements ASEAN’s own diversification strategy.

As Southeast Asian economies look to distribute supply chains more widely and reduce dependence on traditional partners, India stands out as a stable, capable, and strategically aligned partner.

Building the foundations of a modern India–ASEAN trade framework

The next phase of India–ASEAN trade integration rests on modernising the existing frameworks and unlocking the full potential of bilateral and regional cooperation.

A reimagined trade agreement is central to this transformation. Simplifying the rules of origin, deepening integration in services—particularly digital trade, fintech, logistics, healthcare, and e-commerce—and aligning standards for testing and certification will accelerate the movement of goods and services.

Such focused cooperation would enable joint development of manufacturing clusters, innovation hubs, and digital corridors that complement regional strengths.

Enhanced maritime connectivity and logistics cooperation will also play a transformative role.

With India investing in port modernisation and ASEAN countries building maritime infrastructure, the prospect of seamless trade routes connecting India’s eastern seaboard with key ASEAN ports is increasingly attainable.

This could drastically reduce time, improve reliability, and unlock new forms of economic engagement.

A forward-looking partnership with global impact

The partnership is rich with potential: from supply chain integration and digital innovation to sustainable manufacturing, green technology, and skills exchange.

With aligned visions and complementary strengths, India and Southeast Asia are poised to create a future defined by shared prosperity, resilient economic networks, and a deeper strategic partnership.