Modi wants India and ASEAN closer together

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Among the Indian PM's third term goals is to strengthen relations with Southeast Asia

Can Narendra Modi's third term as prime minister bring India and ASEAN closer together? A commentary by Syed Munir Khasru, published in the South China Morning Post, wonders. India's "Act East" policy is poised for recalibration. New Delhi's economic and strategic engagement with Southeast Asia soared during its first two terms, albeit with some shortcomings that require course correction. Modi may now reinvigorate this key foreign policy as India seeks to establish a stronger presence in the Indo-Pacific. On the economic front, trade and investment ties with Southeast Asian countries have received a major boost, with annual bilateral trade soaring from about $80 billion in 2014 to more than $110 billion by 2021-22. However, the existing trade agreement with the Association of Southeast Asian Nations-the Asean-India Free Trade Area-is seen as strongly favoring the Asean side, frustrating India. India's exports to Southeast Asia increased moderately in FY2023 to $44 billion from $42.3 billion in the previous year. Meanwhile, imports from ASEAN countries increased at a faster pace, from $68 billion to $87.6 billion, resulting in a substantial trade deficit of $43.6 billion for India. The need to address the trade imbalance is even more urgent considering that in 2011 the trade deficit was only $5 billion. But the Modi government has not seized all opportunities for economic rapprochement with ASEAN countries due to reluctance to undertake market reforms and tariff liberalization. On the strategic front, India's efforts under the Act East policy helped bring seven Asean members into the Indo-Pacific Economic Framework, an initiative to strengthen economic cooperation between the two regions. Participation in these complementary Indo-Pacific strategies allows for greater coordination of respective interests in this strategically vital region. Initiatives involving connectivity, such as the $484 million Kaladan multimodal transport project linking India to Myanmar and the trilateral India-Myanmar-Thailand highway, are examples of what collaboration between ASEAN and India can achieve in this area.

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