India became a dialogue partner of the Association of Southeast Asian Nations (ASEAN) in 1975. In 2002, this status was upgraded to summit level. Since then, the annual ASEAN summit has been an opportunity for India to reconnect with a region with historical linkages and now increasing geopolitical importance. In 2009, India and the ASEAN bloc of countries inked the ASEAN-India Trade in Goods Agreement (AITIGA), which was implemented a year later.
In addition to the ASEAN, ASEAN-India summits and AITIGA, the annual East Asia Summit (including the US, China, Russia, Australia, New Zealand, Japan, South Korea, India and the ASEAN countries) was a chance for the Indian leadership to interact with the most powerful countries on Indo-Pacific issues. The rebirth of the Australia-India-Japan-US ‘Quad’, for example, had taken place in 2017, after a decade-long hiatus, on the sidelines of the ASEAN summit.
This year, however, Prime Minister Narendra Modi decided to give the ASEAN summit in Kuala Lumpur a miss. External Affairs Minister S. Jaishankar represented India. Modi was absent from the 2022 summit as well. Several reasons are being ascribed to Modi’s absence. Malaysian Prime Minister Anwar Ibrahim said Modi had expressed his inability to attend due to festivities in India, but the explanation was unconvincing, as the ASEAN engagement had been planned months in advance. While some pointed to Modi’s campaign schedule for the Bihar Assembly polls, others cited US President Donald Trump’s presence and India-US trade deal tensions as a possible reason for his staying away. A few even suggested a lingering strain in the India-Malaysia relationship over Malaysia’s diplomatic support to Pakistan during Operation Sindoor, and a visit by the Pakistani Prime Minister to Kuala Lumpur recently.
Seasoned diplomats point out that Modi may have had international, domestic or bilateral reasons, but the no-show was a missed opportunity, especially when other global players, including the US and China, demonstrated their commitment to regional stability by simply being there. The summit was also held at a time of increased geopolitical turbulence, including the economic turmoil unleashed by the US’s tariff policy, China’s constraints on crucial exports and maritime tensions. For the record, however, Modi made a virtual speech at the ASEAN-India summit, which coincided with the main summit. He called the 21st century ‘the century of India and ASEAN’ and committed India’s support to ‘ASEAN unity, ASEAN centrality and the ASEAN outlook on the Indo-Pacific’. He also announced that 2026 would be the year of ASEAN-India maritime co-operation, with a focus on humanitarian assistance and disaster response, maritime security and the region’s blue economy.
Malaysian Prime Minister Anwar Ibrahim said Modi had expressed his inability to attend due to festivities in India, but the explanation was unconvincing, as the ASEAN engagement had been planned months in advance
His absence raised questions about the proposed review of the AITIGA. On paper, both India and ASEAN remain committed to finalising the review. The AITIGA was envisioned as a catalyst for deeper economic integration between the two rapidly growing regions. Yet, more than a decade later, its outcomes invite growing scrutiny, particularly due to the widening trade imbalance that disproportionately benefits the ASEAN region. Between 2008-09 and 2022-23, for instance, India’s imports from ASEAN surged by 234 per cent, while its exports to the bloc increased by only 130 per cent. Consequently, India’s trade deficit with ASEAN widened from $7.5 billion in 2011 to about $44 billion in 2023.
Widening trade deficit
At its core, the widening trade deficit reflects the limited market access Indian producers have secured in ASEAN, compared to what their ASEAN counterparts enjoy in India. Countries such as Indonesia, Malaysia, Thailand and Vietnam have capitalised on India’s large and growing consumer base, particularly in sectors like electronics, palm oil, rubber, chemicals and machinery.
On the other hand, India’s exports, dominated by petroleum products, automobiles, pharmaceuticals and engineering goods, have faced multiple non-tariff barriers in ASEAN markets. These include stringent standards, regulatory hurdles and delays in customs procedures. Indian SMEs, in particular, have struggled to compete with ASEAN’s more integrated production networks and efficient logistics infrastructure. These industries contend that liberalised imports from ASEAN, particularly the cheaper, mass-produced goods, have undermined local production and employment.
This has led to a more cautious trade posture on the part of India in recent years. In 2019, India opted out of the Regional Comprehensive Economic Partnership (RCEP), citing concerns over a similar trade imbalance, particularly with China. The experience with AITIGA undoubtedly informed this decision.
On their part, for many ASEAN members, India still ranks relatively low as an export destination compared to China, the US, Japan or the EU. This means that ASEAN states may have limited incentive to revise the agreement, unless there is a clear convergence of political and economic interests. India will need to make a compelling case that a rebalanced agreement will benefit both sides. Trade experts feel that such a pitch should come from the top Indian leadership.