TRADE RELATIONS BETWEEN INDIA AND ASEAN IN THE 21ST CENTURY

Abstract

ASEAN has established itself as a strong and influential regional organization in contemporary international politics and the global economy. Comprising 11 Southeast Asian nations, it not only serves as a vehicle for regional stability and cooperation but also plays a central role in the Asian economic landscape. The systematic expansion of formal relations between India and ASEAN began especially after the 1990s. This was a period when India implemented structural changes in its economic policies, embracing liberalization, privatization, and globalization. These economic reforms paved the way for India’s deeper integration with the global market and strengthened the economic dimension of its foreign policy. In this changing context, the “Look East Policy” was formulated to strengthen relations with Southeast Asian countries, providing a new direction to India’s foreign policy. The disintegration of the Soviet Union in 1991 and the end of the Cold War resulted in profound changes in the international balance of power. The emerging unipolar structure, replacing the bipolar world order, redefined the priorities of global politics. This change was of particular significance for India, as the deterioration of its long-standing strategic relationship with the Soviet Union underscored the need for a rebalancing of foreign policy. Furthermore, the balance of payments crisis that emerged at that time necessitated economic restructuring. Following economic liberalization, India opened its market to a greater extent for international trade and foreign investment. Against this backdrop, India took concrete steps towards institutionalizing multifaceted cooperation with ASEAN through the Look East Policy, launched in 1992. Southeast Asian countries also viewed post-liberalization India as a major emerging market and potential investment destination. Furthermore, India’s role in the regional power balance was increasingly recognized, especially at a time when other major powers were becoming more active in the Asia-Pacific region. Consequently, relations between India and ASEAN gradually strengthened based on mutual economic interests, strategic needs, and shared aspirations for regional stability. Currently, ASEAN is among India’s major trading partners, and bilateral trade and investment cooperation is steadily expanding. The Act East Policy, an evolution of the Look East Policy, has given this partnership a more proactive, implementation-oriented, and strategic character. This relationship plays a crucial role in shaping the Asian balance of power, regional stability, and inclusive development in the twenty-first century. Thus, the nature of cooperation between India and ASEAN is increasingly dynamic, multi-layered and forward-looking, laying the foundation for serving the long-term interests of both sides in the changing global landscape.