The former Prime Minster Narashima Rao was not only a reformist, but was also a great visionary. His “Look East” dream created a new platform for India’s future growth in global trade and investment. Export to ASEAN, which accounted for a paltry share of 6.6 percent in India’s world export in 2000-01, surged to 11 percent in 2012-13. In contrast, share of imports from ASEAN remained static with 8 percent in India’s world import during 2000-01 to 2012-13.

Only three out of ten ASEAN countries are the main drivers for trade buoyancy with India. They are Singapore, Indonesia and Malaysia. During 2012-13, they accounted for 73 percent of India’s trade with ASEAN.

ASEAN-India FTA in services and investment is a leg up for India. The deal is more significant than FTA in goods. India is more strong in services than ASEAN. With a large pool of professionals in medical services, accountancy, lawyers, architects and other services, the Indian policy makers were euphoric for the forthcoming FTA in services and investment.

ASEAN-India FTA was a trigger to buoyant bilateral trade expansion. The trade between India and ASEAN surged by 35 percent from US$ 56 billion in 2010-11 to US$ 76 billion in 2012-13. During 2010-11 to 2012-13, India’s export to ASEAN increased by 28.9 percent against ASEAN’s export increase by 40.1 percent. Apart the trade expansion, FTA has become springboard for ASEAN investment in India. FDI from ASEAN increased more than double after FTA – from US$ 2,614 million in 2010 to US$ 4,288 million in 2011. Singapore alone was the major investor, accounting for 93 percent of total ASEAN investment flowed during 2010 and 2011.

Notwithstanding, India could not make any major breakthrough in ASEAN global trade. Its share in ASEAN global trade continues to be paltry. In 2012, India’s shares in ASEAN global export and import were 3.4 and 2.4 percent respectively. ASEAN’s major trade partners are China, Japan and USA. This leaves a great scope for India to enter ASEAN market.

Nevertheless, ASEAN-India economic relation has created a new platform for the super-economies to vie for major stakes in East Asia. RCEP ( Regional Cooperation of economic Partnership) of ASEAN+6 (China, Japan, South Korea, India, New Zealand, and Australia) will emerge a third force to escalate ASEAN-India role in balancing the powers of super-economies in East Asia. It is the strategic example for the super powers to shift from west to east. With the commitment in the last ASEAN summit in Phnom Penh in Cambodia, RCEP is certain to be the reality by 2015. It will be the largest trade block in the world. It is viewed as a counter to TPP (Trans Pacific Partnership), which is dominated by USA. TPP has members from ASEAN such as Singapore, Malaysia, and Brunei, besides USA, Australia, New Zealand, Mexico, Chile, Peru and Vietnam. India prefers RCEP than TPP since India will have more say in it than in TPP, which will be dominated by USA.

Given the global shift from west to east, ASEAN-India relation should not be viewed only from the angle of bilateral trade and investment relations. More than these, ASEAN-India relation took a multilateral shape to douse the face-off between USA and China in East Asia. Spur in ASEAN-India economic relation established a legacy for a major role by ASEAN and India in the East Asia politics and economy. East Asia has emerged a hotbed for the global economy. The super–economies are jostling for higher stakes in this zone. The rise of India and China and USA’s assertiveness to play a key role in East Asia gear up ASEAN and India’s importance in this zone. After the second term win by Mr. Barack Obama in the USA Presidential election and the change in the leadership of China, ASEAN-India relation has stirred various thoughts over the strategies by these countries. East Asia is the next decade propeller for global economy.

President Barack Obama will strive to steer gear his “Pivot to East Asia” policy, whose sole purpose is to balance China in East Asia. In this task, USA needs India and India will be a vital partner to take this policy forward. Similarly, Chinese renewed interest with India was spurred by its assertiveness in Asia and Washington’s provocation to use India to contain China. Given the Chinese volta-face toward India and it emerging the biggest trade partner of India, growing ASEAN - India economic relation will rev-up their importance in balancing the powers of super-economies in East Asia economy.

ASEAN members warrant for a big service market. Service sector has been languishing in ASEAN because of its thrust on manufacturing sector, which was to make export based economies. During 2000s, except for Singapore, the average share of service trade in ASEAN GDP was 25-30 percent. India is more competitive than ASEAN in service sectors.

However, even though theoretically India is stronger in service trade and opportunities galore by FTA in services, in reality the success of the deal depends upon how soon India and ASEAN frame the rules and procedures. India made FTA in services with Singapore under Comprehensive Economic Cooperation Agreement in 2005. But, till today not a single FTA in service trade was clinched. Therefore, even though the Brunei summit ushers a great hope for buoyancy in service trade, it needs quicker framing of rules and procedures to impart it a real success. (IPA Service)