India-ASEAN Summit 2024: Ten Years of Act East—What's Next?

The recently concluded 21st India-ASEAN Summit in Vientiane, Laos, arrived at a critical juncture in India’s foreign policy journey. It’s been a decade since the launch of India’s Act East policy, and while New Delhi has made considerable headway in strengthening ties with Southeast Asia, the relationship is far from achieving its full potential. This year’s summit, billed as a showcase of India-ASEAN cooperation, highlighted key areas of progress but also threw up some pressing questions: How should India handle its growing trade deficit with ASEAN? Can India credibly challenge China’s dominance in the Indo-Pacific? And what does the next decade hold for India’s Act East policy?

A Decade of Act East: Has India Delivered?

When Prime Minister Narendra Modi launched the Act East policy in 2014, it was hailed as a strategic pivot—moving from a purely economic focus to one that encompassed political, security, and cultural engagement with ASEAN. Ten years on, we see a mixed record. While India has enhanced diplomatic outreach and signed key defence and trade agreements, its influence in Southeast Asia remains limited when compared to China or even Japan. The 2024 summit was meant to re-energize this partnership, but it largely reiterated familiar commitments without any groundbreaking announcements.

Sure, India reaffirmed its support for ASEAN centrality in the Indo-Pacific, a crucial stance as U.S.-China rivalry heats up, but ASEAN itself is torn. The bloc appreciates India’s presence in regional forums, but can India really offer ASEAN members a compelling alternative to China's economic and strategic clout? The jury is still out.

Trade: The Elephant in the Room

India’s economic relationship with ASEAN is the most glaring gap in the Act East strategy. Despite a decade of political goodwill, the numbers tell a different story. Trade between India and ASEAN has grown steadily, reaching $125 billion in 2024, but the ballooning trade deficit—now over $50 billion—casts a shadow over these figures. India imports far more from ASEAN than it exports, and this imbalance has only grown worse.

What’s causing this disparity? ASEAN’s competitive manufacturing sectors, from electronics to chemicals, have effectively dominated Indian markets, while Indian goods have struggled to gain a foothold in Southeast Asia. The ASEAN-India Free Trade Agreement (AIFTA), in place since 2010, has been a source of frustration. ASEAN countries are pushing for further tariff reductions, while India is wary of exposing its vulnerable industries to more competition.

One of the biggest sticking points remains India’s decision to stay out of the Regional Comprehensive Economic Partnership (RCEP)—the world’s largest trade bloc, which includes ASEAN and China. India’s absence from RCEP means it has limited say in shaping regional trade dynamics, and this self-imposed exclusion has only intensified its trade imbalance with ASEAN. At the 2024 summit, Prime Minister Modi spoke about revisiting AIFTA to address these issues, but the reality is that India’s economic engagement with ASEAN is not keeping pace with its ambitions.

Strategic Depth: India’s Balancing Act in the Indo-Pacific

On the strategic front, India-ASEAN cooperation has been deepening, but not without its challenges. Both sides are aligned on key principles—supporting freedom of navigation in the South China Sea, upholding international law, and ensuring a free and open Indo-Pacific. But words are not enough. China's assertiveness in the region has tested ASEAN’s unity, and many Southeast Asian nations are looking for stronger partners to counterbalance Beijing’s growing influence.

This is where India’s role becomes tricky. While India has ramped up security cooperation with ASEAN—offering defence partnerships to countries like Vietnam and the Philippines—it is yet to take a bold stance on issues like the South China Sea dispute. ASEAN nations are cautious of fully endorsing India as a strategic counterweight to China, especially given their economic dependence on Beijing. India’s non-alignment policy, while tactically sound, often makes it appear hesitant to engage in the region’s more contentious security matters.

Moreover, India’s defence cooperation with ASEAN lacks the kind of institutional depth that frameworks like AUKUS or the Quad offer. India’s strategic interests clearly lie in supporting a stable and balanced Indo-Pacific, but without stronger military and economic linkages with ASEAN, its role remains more aspirational than operational.

The Economic Dilemma: Time for a Reset?

Economic ties are the weak link in the India-ASEAN relationship, and the trade deficit is just one part of the problem. India’s domestic industries are struggling to keep up with ASEAN’s manufacturing prowess, and without significant reforms, this trend will likely continue. Revisiting the ASEAN-India Free Trade Agreement is a step in the right direction, but it will not be enough to bridge the gap. India’s withdrawal from RCEP has also constrained its ability to shape the region’s economic future.

At the summit, there was much talk of connectivity projects like the India-Myanmar-Thailand Trilateral Highway and enhancing supply chains. But these initiatives have been plagued by delays and bureaucratic red tape. India needs to move faster if it hopes to become a serious player in Southeast Asia’s economic landscape. The next phase of the Act East policy must focus on boosting trade, improving supply chains, and fostering greater economic integration with ASEAN, especially in emerging sectors like digital technology and green energy.

Cultural Diplomacy: The Underused Tool

One area where India can still make significant gains is cultural diplomacy. Historical ties between India and Southeast Asia run deep, from shared religious traditions to centuries-old trade routes. Yet, this soft power remains largely underutilized in India’s broader foreign policy approach toward ASEAN. Initiatives like the ASEAN-India Cultural Exchange Program and the ASEAN-India Youth Summit are important, but they remain largely symbolic unless they are expanded into more comprehensive partnerships.

By fostering greater educational exchanges, academic collaboration, and people-to-people connections, India can build long-term goodwill in the region. Expanding scholarships, student exchanges, and research programs will not only enhance India’s image but also help cement its role as a partner of choice for the next generation of Southeast Asian leaders.

Conclusion: What’s the Next Decade of Act East?

The 2024 India-ASEAN Summit underscored both the potential and the limitations of India’s engagement with Southeast Asia. While India has made commendable strides in the last ten years under the Act East policy, there are still significant gaps that need to be addressed. The widening trade deficit with ASEAN, the cautious geopolitical stance in the Indo-Pacific, and the slow progress on key connectivity projects all point to the need for a recalibrated approach.

As India celebrates a decade of its Act East policy, the next ten years will require a bolder and more integrated strategy. India must tackle its trade imbalances, deepen its strategic ties with ASEAN, and leverage its cultural diplomacy to forge lasting partnerships. The future of India-ASEAN relations will depend on whether India can transform its potential into meaningful action.