Landmark Year for India and ASEAN
The year 2017 marks a defining moment for India and ASEAN as the two economic powerhouses commemorate 25 eventful years of India ASEAN dialogue partnership and the ASEAN celebrates 50 years of its existence. The relationship has progressed from strength to strength, with the two sides becoming full dialogue partners in 1996, summit partners in 2002 and strategic partners in 2012. Accordingly, Prime Minister Narendra Modi has placed South East Asia at the core of India's Act East Policy accompanied by a relentless drive to create powerful platforms for deepening IndiaASEAN economic cooperation as the 10-member bloc evolved from a mechanism to promote regional integration for peace, prosperity and stability to a dynamic economic community.
While India's economic partnership continues to expand with 30 dialogue mechanisms between India and ASEAN, including a summit and seven ministerial meetings spanning sectors such as foreign affairs, commerce, tourism, agriculture, environment and renewable energy, FICCI has substantiated the efforts through eight Delhi Dialogues, an initiative of our apex industry body with India's Ministry of External Affairs and other partners in India and the ASEAN aimed at catalysing policy dialogues, two editions of the India-ASEAN Business Fair & Conclave and the creation of an ASEAN India-Business Council.
It is therefore not surprising to see the build-up of huge expectations among both the two Asian partners towards a catalytic transformation in the Indian-ASEAN relationship during the year and beyond. There are, however, two factors supporting this optimism.
First, the huge interest in the ASEAN countries about India as a potential business avenue. India's resilient economy, notwithstanding the global headwinds, fast paced economic and tax reforms including the efforts to implement Goods and Services Tax, increased public investment in infrastructure, opening up of defence, aviation and pharma sectors to foreign direct investment, have positioned India as a poster boy of global growth and the ASEAN economies are keen to get a share of the pie.
Second is that the ASEAN is rapidly gaining currency in India's roadmap of development and growth as an emerging hub of global business and innovative development with a young workforce, rising incomes, improving infrastructure and large foreign investments. The ASEAN economies have emerged as major global hubs for manufacturing and trade and amidst sluggish global growth stand out as oasis of growth indicated by the ongoing negotiations for a Regional Comprehensive Economic Partnership which once finalized, will emerge as the largest regional trading arrangement. For Indian companies this means a bonanza in terms of access to the wider markets of South East Asian region with a middle-income catchment of more than 600 million people and channels of investment in ASEAN member states.
To reap the dividends of this amazing playout of opportunities, India and ASEAN need to expedite efforts towards boosting trade and investments. Though the ASEAN is India's 4th largest trading partner accounting for 10.2 per cent of India's total trade and investment flows are also robust both ways, the potential is far more. Countries like Thailand have taken measures to make the regulatory environment more attractive with an aim to maintain Thailand's position as the most preferred investment destination creating an opportune moment for India to push ahead with investments in the region.
One sure bet in terms of attracting more bilateral investments is manufacturing, with ASEAN member states eyeing opportunities in the Makein-India initiative and the India going all out to be an integral part of the global supply chain with easing of business regulations and processes. The Modi Government's proposal for a
Project Development Fund to develop manufacturing hubs in CLMV countries fits in well with both designs.
Another game-changer could be infrastructure which is witnessing explosive growth and potential in both India and the ASEAN region. India would like to see a greater interest among ASEAN states in its Smart Cities mission with focus on urban development, green technologies, real estate, sanitation and transport systems. Similarly, Indian companies could look at investing in infrastructure projects in ASEAN economies like Thailand where the infrastructure boom across roads, ports and economic corridors should prompt Indian players to grab the opportunity to become locally integrated and internationally connected. Enhancing connectivity in all its dimensions - physical, digital, economic, institutional and cultural - is at the heart of India's strategic partnership with ASEAN and the avenues are mushrooming. The implementation of the Master Plan on ASEAN Connectivity 2025 supported by India merits quick action as does an early conclusion of the Agreement on Maritime Transport between ASEAN and India and convening of the first Meeting of the ASEAN-India Working Group on Regional Air Services Arrangement.
The Indian Government's announcement of a US$1 billion Line of Credit for undertaking projects to enhance physical and digital connectivity in the ASEAN can serve as a timely incentive.
In the area of innovation, governments and industry in India and the ASEAN could collaborate on identifying impactful technologies from both areas for appropriate markets. A programme developed by FICCI and the Government of India to train innovators by mentoring them on product commercialization, market readiness, business models, competitive positioning and revenue mechanisms could lead to commercialisation of at least 20 technologies every year between India and ASEAN and help generate skills and entrepreneurial efficiencies. India and the ASEAN need to leverage on this.
Even as the dynamics of the India-ASEAN engagement open up a wide agenda of cooperation for the governments and businesses to take the regional relationship to the next level, FICCI is also expanding its activities to take our industry partnerships to the next level and facilitate concrete linkages between the stakeholders of India and ASEAN in the priority sector of economies. The initiatives being taken by FICCI jointly with the Ministry of External Affairs, Government of India, ASEAN governments, think-tanks and other partners range from the India ASEAN Business Summit to be held in India as announced by Prime Minister Narendra Modi to the first India-ASEAN Start up Awards which are aimed at encouraging innovative entrepreneurship to the first ever ASEAN India Biztech expo and conference in Malaysia to bridge opportunities in business and technology world.
The other programmes include the IXth Delhi Dialogue. an annual conference of political and economic leaders, officials, academics and opinion-makers of India and ASEAN countries to intensify all-round interaction between the two regions, the India-ASEAN Women Business Forum to recognise the increasing contribution of women leaders and the significant roles they play in the economic and trade relation of India and ASEAN countries and the first India ASEAN youth Summit and Awards to recognize the hopes, aspirations and dreams of the younger generation as well as their zeal to excel and make a difference .
The bright side to the challenge of skill development is that the government recognizes India's favourable demographic dividend and is shouldering the responsibility of providing employment to millions of youth in a big way.
No doubt the India-ASEAN Strategic Partnership has worked well to our mutual benefit but we are now positioned strongly to pool in our synergies towards shaping an economic and security architecture in the Asia-Pacific region which is open, inclusive, balanced and equitable. That will mark the true celebration of our relationship of 25 years.