Prospects

AbouttheRISTheResearchandInformationSystemfortheNon-AlignedandOtherDevelopingCountries(RIS)isanautonomousresearchinstitutionestablishedwiththefinancialsupportoftheGovernmentofIndia.RISisIndia’scontributiontothefulfilmentofthelong-feltneedofthedevelopingworldforcreatinga‘ThinkTank’onglobalissuesinthefieldofinternationaleconomicrelationsanddevelopmentcooperation.RIShasalsobeenenvisionedasaforumforfosteringeffectiveintellectualdialogueamongdevelopingcountries.RISisalsomandatedtofunctionasanadvisorybodytotheGovernmentofIndiaonmatterspertainingtomultilateraleconomicandsocialissues,includingregionalandsub-regionalcooperationarrangements,asmaybereferredtoitfromtimetotime.RISfunctionsincloseassociationwithvariousgovernmentalbodies,researchinstitutions,academicians,policy-makers,businessandindustrycirclesinIndiaandabroad.RIShasaconsultativestatuswithUNCTADandNAMandhasconductedpolicyresearchandotheractivitiesincollaborationwithotheragencies,includingUN-ESCAP,UNCTAD,UNU,Groupof77,SAARCSecretariat,AsianDevelopmentBank(ADB),TheWorldBank,andtheSouthCentre.RISpublicationprogrammecoversbooks,researchmonographs,discussionpapersandpolicybriefs.ItalsopublishesjournalsentitledSouthAsiaEconomicJournal,AsianBiotechnologyandDevelopmentReview,andRISDiary.ResearchandInformationSystemfortheNon-AlignedandOtherDevelopingCountriesCoreIV-B,FourthFloorIndiaHabitatCentreLodhiRoadNewDelhi-110003,India.Ph.91-11-24682177-80Fax:[phone]-75Email:[e-mail]:“EcosystemicMultifunctionality”–AProposalforSpecialandDifferentiatedTreatmentforDevelopingCountryAgricultureintheDohaRoundofNegotiationsA.DamodaranRIS-DP#60/2003ASEAN-IndiaEconomicRelations:CurrentStatusandFutureProspectsRahulSen,MukulG.AsherandRamkishenS.RajanRIS-DP#73/2004ASEAN-IndiaEconomicRelations:CurrentStatusandFutureProspectsRahulSen,MukulG.AsherandRamkishenS.RajanRIS-DP#73/2004May2004CoreIV-B,FourthFloor,IndiaHabitatCentreLodhiRoad,NewDelhi–110003(India)Tel:[phone]/2180;Fax:[phone]Email:[e-mail]endtodisseminatepreliminaryfindingsoftheresearchcarriedoutattheinstitutetoattractcomments.Thefeedbackandcommentsmaybedirectedtotheauthor(s).ASEAN-IndiaEconomicRelations:CurrentStatusandFutureProspectsRahulSen*,MukulG.Asher**andRamkishenS.Rajan***Abstract:Thispaperanalyzesrecenttrendsinmerchandisetrade,services,investments,andmanpowerflowsbetweenIndiaandASEAN,andassessesfutureprospectsforeconomiccooperation.SinceIndia’sLook-Eastpolicyinitiatedintheearly1990s,therehasbeensteadyprogressineconomiccooperationandsupportinginstitutionalstructuresbetweenIndiaandASEAN.TherehasalsobeenawelcomediversificationofIndia’stradewithASEANbothintermsoftheshareofindividualmembersintotaltrade,andgoodsandservicesbeingtraded.TheanalysisinthepaperisconsistentwiththeviewthatIndia’seconomicstructureislargelycomplementarytoASEANeconomies,andthereforetherearesignificantopportunitiesformutualgain.InIndianpolicyandbusinesscircles,ASEANcontinuestoberegardedasaneconomicallyimportantregion.ThepaperhoweverarguesthatamindsetchangeisneededamongASEANpolicymakersandbusinessesbeforepotentialformutualgainscanbefullytapped.ThepaperconcludeswithspecificsuggestionsforexpandingcooperationbetweenIndiaandASEANcountries.IntroductionInthepost-ColdWarperiod,andparticularlysincethelatterpartofthe1990s,India’srelationswithallthemajorpowers,especiallytheUS,haveshownconsiderableimprovement.Thereisnowgreatermutualunderstandingofinter-1WewouldliketothankAnanthaNageswaran,Prema-chandraAthukorala,KripaSridharanandSadhanaSrivastavaforusefulcommentsandsuggestions.ThanksarealsoduetoAmarendyNandyandArathiJayaramforexcellentresearchassistance.Theusualdisclaimerapplies.*Fellow,InstituteofSoutheastAsianStudies(ISEAS),Singapore.E-mail:[e-mail](correspondingauthor).**Professor,PublicPolicyProgramme,NationalUniversityofSingapore(NUS),Singapore.E-mail:[e-mail].***VisitingFreemanScholar,ClaremontMcKennaCollege,California.E-mail:[e-mail],securityandstrategicinterestsofIndiaontheonehandandmajorpowersontheother.TherearealsohopefulsignsthateconomicimperativesaregraduallybecomingmuchmoreimportantindrivingrelationsontheIndiansub-continent,includingbetweenIndiaandPakistan(Solomon,2004).1AsIndiademonstratesitseconomicandtechnologicalcapacitiestocompeteinthe21stcentury,itisbecominganimportantplayerinshapingthefuturepoliticalandsecurityenvironmentinAsia.ResilienceandstabilityofIndia’spoliticalandotherinstitutions,andharmonybetweenitsdecentralizedeconomicandpoliticalarrangementsalsohavethepotentialtocontributetoIndia’scompetitivestrength.FollowingtheinitiationofeconomicreformsinIndiain1991,India’sannualgrowthratehasaveraged5.9percentduringthe1992-93to2002-03period.Notwithstandingsomeconcernsaboutthelargefiscaldeficit(especiallyinthestates),Indiarepresentsacompellingmacroeconomicstory,withpotentialtosustainhigheco