Twenty five years, ago, the Indian state announced its “Look East” policy and began to actively strengthen economic and political relationships with the countries of South East Asia. This was immediately following the end of the Cold War and the end of the bipolar division of the world.
During these twenty five years, the ten member ASEAN has emerged as an important multilateral trade grouping. China has emerged as the biggest trading partner of ASEAN, followed by Japan, the US and South Korea.
Over the years, various levels of Indo-ASEAN partnership have been developed, in trade and commerce, cultural relations, infrastructure and connectivity, etc. At present, there are over 30 types of India-ASEAN dialogue mechanisms, which include the annual summit on the sidelines of the East Asia summit and seven ministerial dialogues. However, India still ranks only tenth in the list of trading partners of ASEAN. ASEAN is at present India’s fourth largest trading partner.
During the recent Summit discussions were held on increasing trade between India and ASEAN. Despite having a Indo-ASEAN free trade agreement in services and investments, India-ASEAN trade for the year 2016-17 was only USD 71 billion, in comparison to the USD 470 billion trade of the ASEAN with China. Indian private monopoly capitalists pushed for investing in infrastructure projects in these countries. China is investing in major projects to develop road connectivity with ASEAN countries under the Belt and Road Initiative. The Indian State is building a highway connecting India to Thailand via Myanmar, to be later extended to Vietnam. However, there has been a lot of delay in carrying out this project.
The Indian State pushed for increasing investments for infrastructure development in its northeastern states, to give a further boost to its 'Act East' policy. However, it is reported that ASEAN members were not interested in making investments in the Northeast, citing lack of markets and infrastructure there, preferring instead to focus on markets in other parts of India.
India has a negative trade balance with ASEAN. The Indian state is finding it difficult to increase its penetration of the ASEAN market in the face of competition from China. On the other hand, ASEAN is demanding that India open up its markets.
One of the points of discord between India and ASEAN is the Regional Comprehensive Economic Partnership (RCEP). The RCEP, initiated in 2002, is a proposed free trade agreement between the ten ASEAN members and six other countries, namely, Australia, China, India, Japan, South Korea and New Zealand.
ASEAN countries are pushing for early signing of the RCEP. The Indian State is proceeding cautiously in the negotiations over RCEP. The capitalist monopolies of India want the markets of ASEAN and other RCEP countries to be opened up for themselves, while ensuring that their own control over the Indian market is not threatened. They are worried that the RCEP will be dominated by China and some other countries. Apart from this, there is growing opposition amongst the peasantry and sections of the non-monopoly bourgeoisie to free trade agreements that harm their interests.
The corporate controlled media played up the PM’s rhetoric about “shared values, common destiny” (the theme for the summit), “vasudhaiv kutumbakam” (the earth is one family), etc. However, behind the media photos of smiling faces of the ten leaders with PM Modi occupying centre-space, the summit could not hide the contradictions between the Indian state and member states of the ASEAN.