PM Modi Co-Chairs ASEAN Summit Under The Dragon’s Shadow

Prime Minister Narendra Modi and his Vietnamese counterpart Nguyen Xuan Phuc co-chaired the 17th ASEAN-India virtual summit on Thursday. At today’s summit, the South China Sea and terrorism both came up for discussion.

In his brief opening remarks, Prime Minister Modi said: “India and ASEAN's Strategic Partnership is based on our shared rich historical, geographical and cultural heritage. The ASEAN group is the nodal center of our Act East Policy since the very beginning…There is ample closeness between India's Indo Pacific Oceans Initiative and ASEAN's Outlook on Indo- Pacific. We firmly believe that a "Cohesive and Responsive ASEAN" is essential for "Security and Growth for All in the Region".

The summit is taking place at a time when most countries have been hard hit by the pandemic which has also triggered an economic downturn. In this period of unprecedented hardship, China began asserting itself across Asia —in the South China Sea, the Taiwan Straits, in the waters around Japan as well as on the ground in Ladakh. Both India and Vietnam, who were co-chairing the meeting, have problems with China. So do the Philippines and Malaysia. Yet, ASEAN members also have thriving trade with China.  

Though India keeps harping at the centrality of ASEAN in the Indo-Pacific, the group is divided on China. Cambodia is China’s closest friend in the region. The US-China rivalry and the bitter trade war between the number one and two economic powers of the world have affected all countries. ASEAN has watched all this in troubled silence.

``Both sides noted the importance of promoting a rules-based order in the region including through upholding adherence to international law, especially the United Nations Convention for the Law of the Sea (UNCLOS). The leaders affirmed the importance of maintaining and promoting peace, stability, safety and security in the South China Sea in particular freedom of navigation and overflight,’’ Riva Ganguly Das, Secretary East in the MEA said at a briefing after the summit.

For India, the talks focussed on fighting the pandemic as well as post-Covid economic recovery. There was also a review of the ASEAN-India strategic partnership.

India's ties with the Association of Southeast Asian Nations (ASEAN) have grown steadily since 1992, when the late Congress prime minister Narasimha Rao, decided to focus on the thriving East Asian economies. It was then referred to as India’s Look East policy. This was changed to the more robust Act East policy in 2014 when Modi came to power. India has been holding summit level interactions with ASEAN since 2002 and was elevated to a strategic partner in 2012. The Association of Southeast Asian Nations (ASEAN) members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

The big-ticket issue in ASEAN at the moment is the signing of the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement between ASEAN members and Australia, China, Japan, New Zealand, and South Korea.  India opted out of RCEP last year, to the great disappointment of member states. ASEAN was keen that India and China both be part of the agreement. ASEAN as well as countries like Japan urged India to join RCEP, but India remained adamant.

India is concerned that its agricultural sector will be hit hard by such a free trade agreement. And it is not just the farm sector, but traders are also worried that joining RCEP would lead to the flooding of Indian markets with cheaper Chinese products, which would hit small businesses. According to projections, joining this free trade grouping would lead to the elimination of tariffs on nearly 90 percent of imports from ASEAN nations, Japan, and South Korea.  It would also mean slashing trade barriers for over 74 percent of imports from China, Australia, and New Zealand. India already has a huge trade deficit with China of nearly 53 billion dollars and joining RCEP, which would be China-driven will double the deficit.