ASEAN - INDIA: EMERGING ECONOMIC OPPORTUNITIES

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ASEAN - INDIA: EMERGING ECONOMIC OPPORTUNITIES
By
Mukul Asher*
Rahul Sen**
And
Sadhana Srivastava***
March 2001
Paper prepared for ASEAN-INDIA workshop on Economic Issues organized by the
French center de Sciences Humaines, Institute of Southeast Asian Studies,
Singapore, and School of International Studies, Jawaharlal Nehru University, New
Delhi, March 17-18, 2001
* Professor, Public Policy Programme, National University of Singapore, email:
mppasher@nus.edu.sg
** Research Scholar, Department of Economics, National University of Singapore, email:
artp8238@nus.edu.sg
*** Research Scholar, South Asian Studies Programme, National University of Singapore,
email: artp0320@nus.edu.sg
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I Introduction
The period since the early 1990s has witnessed a perceptible shift in relations
between India and the members of the Association of Southeast Asian Nations
(ASEAN)1 (CSIS, 2000). The density of economic and political interactions has
increased, and this trend is expected to continue as both sides enhance their
capacity and willingness to engage with each other, and establish institutions and
mechanisms for wider and deeper linkages. A good beginning has been made, but
the relations will require continued nurturing (Asher, 1997).
This paper discusses factors contributing to increased density of economic
relations between India and ASEAN, and suggests possible measures and avenues
to take advantage of emerging economic opportunities for mutual benefits. In the
Post Cold War globalized era, the role of economic diplomacy has increased
considerably in relations between nations. It is therefore expected that increased
density of economic relations will help provide a more conducive context for
cooperation in political and other non-economic areas as well.
From India’s perspective, its engagement with ASEAN will need to be at two
levels. The first will be to engage ASEAN as an organization. However, because
ASEAN as an organization has been intentionally provided by the members with very
limited authority and resources to pursue economic cooperation and to acquire
expertise or capacity for monitoring developments in the member countries, India will
also need to devise country-specific bilateral strategies and tactics. The bilateral
approach is necessary also because expanded ASEAN is considerably more
1 ASEAN was founded in 1967 as a cold war organization by Indonesia, Malaysia, Philippines,
Singapore, and Thailand. Since then it has doubled its membership to all ten countries in Southeast
Asia. Brunei joined ASEAN in 1984, Vietnam in 1995, Laos and Myanmar in 1997, and Cambodia in
1999.
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heterogeneous in its economic structure and level of development, and in its political
philosophy and orientation. As a result, it has become increasingly difficult to evolve
a common ASEAN view on economic and other issues. The 1997 crisis has
considerably reduced Indonesia’s capacity and willingness to provide political
leadership, while high-income members such as Singapore have focused on
economic opportunities with countries beyond the region since the crisis (Lim,
2001)2.
The rest of the paper is organized as follows. A discussion of the major
factors which have contributed to a more positive dynamics in economic (and
political) relations between India and ASEAN is undertaken in section II. This is
followed by a brief overview of the existing economic relations centering on
merchandise trade, investments and tourism in section III. An analysis of the
emerging economic opportunities between India and ASEAN as an organization, and
between ASEAN and individual ASEAN members bilaterally is undertaken in section
IV. The final section provides the concluding observations.
II Factors Contributing to Positive Dynamics
Various factors contributing to a greater density of economic and political
relations between India and the ASEAN members may be grouped under political
and security environment, globalization and associated technological changes, and
institutional foundations. Each is discussed in turn.
Political and Security Environment
The end of the Cold War and disintegration of the former Soviet Union were
epochal events of the 20th century. ASEAN was formed as a Cold War organization,
2 ASEAN members, particularly Malaysia, have expressed strong reservations about Singapore’s
aggressive perusal of the bilateral free trade agreements with major trading partners such as the U.S.,
Japan, Australia, and the New Zealand
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and was aligned with the West. In return, the United States, Japan, and European
countries were on the whole willing to integrate them in the international economic
system, and in some cases subordinated their economic and commercial interests
for security needs. Since the end of the Cold War, the US in particular, has been
pursuing its economic and commercial interests much more vigorously, thus
adversely affecting the original ASEAN members.
In the post Cold War period, India’s relations with the Western countries,
particularly the US, has been marked by much greater mutual understanding of
security and strategic interests. India has demonstrated its willingness, backed up by
expanded strategic capability and political engagement to play a role beyond South
Asia to which its adversaries have attempted to confine it.
The political and security environment thus is no longer as lopsided in favor of
ASEAN as it was during the Cold War period. ASEAN members do not have any
outstanding bilateral or multilateral security or political issues with India. Indeed, in a
new post Cold War environment, greater engagement with India has the potential to
enhance leverage of ASEAN with the rest of the world, as well as of each ASEAN
member with respect to others in the organization. Attempts by some countries in
ASEAN to confine India to South Asia are therefore not consistent with the broader
interests of these countries as well as of ASEAN as an organization. Deeper and
broader engagement between India and ASEAN is an essential element in Asia’s
attempts to enhance its role in the world.
Globalization and Associated Technological Changes
The unfolding globalization process has centered on vastly expanded crossborder
production and distribution networks, and on financial institutions, products,
and transactions. Adjusting to globalization, while attempting to maintain social
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cohesion and internal political stability have become a vital pre-occupation of most
countries around the world.
Globalization has been aided by the technological revolutions in communications,
life sciences, including biotechnology, micro-electro-mechanical systems (MEMS),
and information processing and dissemination. These have profoundly altered the
requirements for participating meaningfully in the global economy and sustaining
economic growth and employment. The importance of developing appropriate
institutions, and of transparency and meaningful participation in social and political
spheres has also increased. The role of individual initiative and entrepreneurship has
also increased.
During the Cold War period, ASEAN countries grew rapidly, and were able to
considerably improve their ranking in human development indicators including
poverty reduction. Their integration with the international economy provided
substantial benefits in terms of markets, investments, technology, manpower flows,
and bilateral and multilateral loans and assistance, while they experienced little
pressure for institutional reforms in political and economic spheres.
India on the other hand, chose not to be integrated with the international
economy, with detrimental effects on its economic performance, and poverty
reduction, though in many significant ways it remained a much more open society
than most developing countries. It also devoted considerable energies to developing
institutions, including those mediating between the centre and the states; and in
laying foundations for democratic participation.
Globalization and associated technological changes ushered in a new era of
economic uncertainty. ASEAN countries had greater integration with the world
economy but were ill equipped to suddenly deal with the new uncertainties. The
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1997 East Asian economic crisis, whose proximate cause was the devaluation of the
Thai Baht on July 2, 1997, and its aftermath has considerably reduced ASEAN’s
earlier dynamism and adversely affected its medium term growth prospects. It is now
clear that most ASEAN countries will need to devote considerable energies in
developing political and other institutions, including for mediating centre-state issues
(Lim, 2001). The 1997 crisis thus had an adverse impact on ASEAN’s capacity to act
as an economic partner. This has reduced the attention paid by the high -income
countries, including those from the region such as Singapore, to the ASEAN
members. Thus, they need to diversify their economic partners. ASEAN’s limited
domestic market has also increased the need to find economic partners with large
markets, such as India. As India is not a direct competitor for ASEAN’s export-led
economies, particularly in manufacturing sector, the opportunities for mutual gain are
considerable.
India experienced a major economic crisis in 1991 whose proximate case was
the balance of payments crisis, in part brought about by the aftermath of the Gulf
War. However, the causes of the crisis lay much deeper in India’s lack of emphasis
on economic efficiency and limited integration with the world economy. The crisis
clearly demonstrated the urgent need for a fundamental re-think of its economic
philosophy, strategy, and tactics. Since 1991, India has embarked on wide ranging
reforms that will significantly enhance the role of the markets and integrate it with the
international economy3.
3 For a report card on the reforms in different sectors and the tasks ahead, see Parikh (1999).
The 2000-01 Economic Survey published in February 2001 by the Ministry of Finance; and
the FY2001-2002 budget speech of the Finance Minster presented on February 28th 2001,
are other authoritative sources on India’s performance and reform plans. Both these may be
accessed on http://www.indiabudget.nic.in . India’s 2001-02 Budget has drawn nearly
universal approval for its vision and specific measures designed to accelerate market-oriented
reforms (Nageshwaran, 2001; The Economist, 2001; Slater, 2001). The budget has laid a
blueprint for higher growth, and tackled many difficult reform issues such as labor market
reform, pension reform, and infrastructure. The budget and India’s 2001 Export-import (EXIM)
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India’s real GDP grew at an annual rate of 6.4 percent between 1992-93 and
2000-01 period (The 2001-02 Budget Speech, Para 4). India aims to increase the
annual growth rate to about 7.0 percent. This should provide ample opportunities to
its economic partners, including those in ASEAN. India thus now has both greater
willingness and capacity to engage with the outside world.
Unlike ASEAN, India clearly did not take sufficient advantage of the growth in
international trade and investments since the 1960s. But its cautious approach to
reforms, and nurturing of professional and technical human resources, and
indigenous companies in pharmaceuticals and other knowledge-intensive sectors,
are likely to positively contribute to its ability to compete in the 21st century. The new
economy activities, particularly the Internet, are most beneficial when there is
pluralism and contestability in not just economic but also in socio- political spheres.
Indians are quite accustomed to operating in such an environment, and India’s
complex, multi-ethnic society and polity provides some advantages in operating
globally in new economy activities.
Its systems of governance and its institution, while in need of reform, are
consistent with evolving international norms, and more importantly elicit widespread
acceptance and internalization by the Indian population. Thus, in a real sense,
India’s political and social systems have stability and resilience. This is the main
contributory factor in rapid acceptance of the reforms, even though consensus
building process for introducing reform measures has been slow. India also needs to
considerably enhance economic and technological sophistication of its policymakers
and bureaucracy. For both India and ASEAN, the only realistic choice is to
participate in shaping the globalization process in a manner that makes them less
Policy demonstrated refreshing willingness to draw relevant lessons from other countries,
particularly China. Please see details of the EXIM Policy on http://dgftcom.nic.in/exim/2000
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unequal partners in relation to the high-income countries. Thus, globalization has
increased the need for greater engagement between the two, particularly as both
face challenges in areas such as environment, food security, designing effective
social safety nets, applying technology to a diverse set of activities, and energy
security.
Institutional Foundations
The 1990s have also witnessed strengthening of the institutional foundations
for engagement between India and ASEAN. India enunciated a “Look East” policy in
1991 with a view to deepening economic and political relations with the East Asian
countries, and drawing lessons from them for managing its economy. In 1992, India
became a sectoral dialogue partner of ASEAN on trade, investment, tourism, and
science and technology. At the fifth ASEAN summit in Bangkok in December 1995,
India was invited to be a full dialogue partner. This was followed by India becoming a
member of the ASEAN Regional Forum (ARF) where regional security issues are
discussed. India’ s participation in these two fora has been low-key but confident and
constructive. India’s evolving economic cooperation with the United States has
positively impacted on the environment in which India participates in the ARF.
Participation of India in ASEAN working groups and in various committees as an
observer could help deepen the understanding among the officials and private sector
participants from both sides.
India and the ASEAN countries also have opportunities for cooperation and
discussion in other such fora a as G-15 (Group of 15 developing countries which
included India, Indonesia, and Malaysia); Indian Ocean Rim Association for Regional
Cooperation (IOR-ARC), which includes, Indonesia, Malaysia, Singapore and
Thailand as members; Mekong-Ganga Cooperation (MGC), which includes
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Cambodia, India, Laos, and Vietnam; and BIMSTEC (which includes India,
Myanmar, and Thailand).
In addition, India has been especially active in forging bilateral relations with
individual ASEAN countries, particularly, Indonesia, Myanmar, Singapore, and
Vietnam. This is reflected in a recent series of visits by India’s President, Prime
Minister and External Affairs Minister, along with large business delegations, to these
countries. The frequency of bilateral visits to India by the ASEAN leaders and their
business delegations has also increased in recent months.
India’s private sector has also been active in establishing institutional
presence in ASEAN. This is exemplified by the establishment in Singapore of a
South East Asian regional office of the Confederation of Indian Industry (CII), India’s
broad-based, pro-reform organization representing the industry all over the country.
This now permits businesses in ASEAN to reduce their transaction costs in finding
suitable and reliable business partners in India, and vice-versa. There is however no
comparable private sector presence from the ASEAN side in India, a gap which
ASEAN countries may consider filling.
Before analyzing the emerging economic opportunities, it may be useful to
gain an understanding of the recent trends in economic relations between ASEAN
and India.
III An Overview of Existing Economic Relations
Existing economic relations between India and ASEAN cover a wide-range,
involving merchandise trade, trade in service transactions, investments, tourism, and
manpower flows. Before discussing each in turn, some observations based on
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selected indicators provided in Table 1 may be useful. Because of data limitation,
only six ASEAN countries are included in Table 14.
(i) India’s population of one billion is more than twice that of ASEAN. The
most populous country in ASEAN, Indonesia, has about one-fifth of
India’s population.
(ii) In contrast, ASEAN’s per capita income in 1999 of US $1,154.2 was
about two and a half times that of India at current exchange rates, and
1.6 times that of India in PPP terms.
(iii) In absolute terms, ASEAN’s GNP in 1999 of US $ 519.4 billion at
current exchange rates was nearly one-fifth higher than that of India.
However, in PPP terms, India’s GNP of US $ 2144.1 billion exceeded
ASEAN’s by more than a third. The gap in GNP at current exchange
rates between India and ASEAN has been narrowing during the 1990s,
particularly since the 1997 crisis. If India sustains its current growth
rate which is higher than that for ASEAN as a group for another
decade, this gap could narrow further or even reverse. ASEAN
however will continue to enjoy higher per capita income for the
foreseeable future.
(iv) ASEAN’s greater integration with the world economy is indicated by its
FDI inflow in 1998 of US $19.0 billion as compared to only US $2.6
billion for India; by Official Development Assistance (ODA) per capita of
more than four times (US $ 8) as compared to India (US $ 2.0); and by
4 Brunei, Cambodia, Laos, and Myanmar are excluded because of the lack of comparable data in not
only Table 1 but also in other tables and charts in this paper.
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external debt of US $ 352 billion (68 percent of GNP), as compared to
US $98 billion (20 percent of GNP) for India.
Merchandise Trade
The data for aggregate trade for the 1991-92 to 2000-2001 (April-September)
period is summarized in tables 2-4, and shown on charts 1-5. The source for the
data is the Centre For Monitoring Indian Economy (CMIE), a respected,
independent, private economic research organization. It should be noted that the
CMIE data may not necessarily be consistent with the data from ASEAN country
sources. This is because the CMIE data are on the basis of fiscal rather than
calendar year; the data reflects as far as possible the country of origin for recording
India’s imports, and country of destination for India’s exports, thus excluding reexports;
and reflect values recorded by the Indian authorities.
The following observations may be made concerning the trends in
merchandise trade between India and ASEAN during the 1990s:
(i) India’s merchandise exports nearly tripled from about US $1.0 billion
(5.7 percent of its world exports) to US $ 2.9 billion in 1996-97 (8.5
percent of its world exports), before declining sharply to only US $ 1.6
billion in 1998-99 as a result of the Asian crisis (Table 3). There has
been a recovery since then, but the pre-crisis peak has not yet been
reached. Nevertheless, in 1999-2000, India’s exports to ASEAN
exceeded its exports to Japan (US $1.7 billion), and to Germany (US
$1.8 billion).
(ii) There has however been considerable shift in the share of total Indian
exports to ASEAN among the individual members during the 1990s. In
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general, the share of India’s exports to Indonesia (particularly until the
1997 crisis), and Vietnam has increased significantly, while the share
of Singapore has declined. In absolute terms however, Singapore
remains the largest market in ASEAN for India’s goods, followed by
Malaysia, Thailand, Indonesia, Vietnam, and the Philippines.
(iii) India’s imports from ASEAN have increased nearly four times, from US
$ 1.3 billion in 1992 to US $ 4.9 billion in 1999-2000 (Table 3, chart 1).
Indeed, in 1999-2000, ASEAN accounted for 10.5 percent of India’s
imports from the world (Table 3, chart 2). Thus, there is an asymmetry.
ASEAN is much more important to India as a source of imports
(particularly electronic goods, cooking oil, forest products and
petroleum products) than it is as a market for its exports. India thus has
been able to contribute positively to ASEAN’s export –led recovery.
(iv) During the 1990s, the relative importance of ASEAN countries in
India’s imports has changed considerably (Table 3, Chart 4). In 1991-
92, Singapore’s share was 54.6 percent, but by 1999-2000, this has
dropped to only 30.5 percent (Table 3, Chart 4). Correspondingly, the
share of Malaysia increased from 30.8 percent to 41.6 percent; and
Indonesia from 5.3 percent to 20.0 percent (Table 3, Chart 4). Thus, in
relative terms, Singapore’s importance has been declining.
(v) India-ASEAN merchandise trade has more than tripled from US $ 2.3
billion in 1991-92 to US $7.1 billion in 1999-2000 (Chart 1). As India’s
imports from ASEAN have grown much faster than its imports, the
balance of trade has shifted sharply in favor of ASEAN (Table 4).
During the 1990s, in only two years did India exhibit a surplus with
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ASEAN. India’s trade deficit with ASEAN increased quite sharply after
the 1997 crisis, reaching US $ 2.7 billion in 1999-2000, more than a
quarter of its total deficit with the world (Table 4). In 1999-2000, India
had the highest bilateral deficit with Malaysia (US $ 1.6 billion),
followed by Singapore (US $ 0.8 billion), and Indonesia (US $ 0.7
billion). As noted below, India is also likely to experience adverse
balance of trade in services, particularly in tourism, logistics and
transportation services, with ASEAN. Precise data however are not
available.
As India continues its reforms and good macroeconomic
performance, ASEAN countries will find further economic opportunities
with it. This could in part counterbalance adverse impact of China’s
entry into the World Trade Organization (WTO) on ASEAN’s exports
and investment flows (Thornhill, 2001).
Investments Relations
Existing investment relations between India and ASEAN are limited. Among the
ASEAN countries, only Singapore is a net lender abroad. Singapore-based MNCs,
and Singapore’s government –linked-companies (GLCs) such as Singapore
Telecom, Port of Singapore Authority, and Singapore Technologies have made
investments in India. There have also been some investments by Singapore’s private
sector companies in health care, real estate, and tourism.
Because of the significant presence of the MNCs in Singapore; use of
Mauritius to route investments because of its favorable double taxation treaty with
India; and the recording of investment flows by the Non-Resident Indians (NRIs)
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from around the world as a separate category, it is not possible to accurately quantify
approved as well as actual investment flows from Singapore to India. Singapore’s
role as a financial center has also been important in India’s transactions with the rest
of the world.
Large companies, particularly conglomerates from other ASEAN countries,
such as Malaysia, Indonesia and Thailand, have made occasional investments in
India. But the 1997 economic crisis has affected them quite adversely, and many of
their investments in India have undergone ownership and other changes.
The Indian Diaspora in ASEAN countries has not played a significant role in
expanding economic relations with India, including in investment. In part this reflects
weak economic position of the ASEAN citizens of Indian origin. Indeed, Malaysia and
Singapore are perhaps the only two significant economies in the world where the
socio-economic status of their citizens of Indian origin is lower than that of the
population as a whole.
A recent study by Yogarajah (2000) based on 75 interviews with firms from
Malaysia and Singapore who have invested in India found a high-level of satisfaction
with their decision to invest in India, and most were considering expansion or
diversification. Favorable experience and profitability of Singapore’s technology park
in Bangalore has also created a positive environment for investments in India.
The Indian companies had limited capacity until recently to invest abroad,
including in ASEAN. There have been limited Indian investments in ASEAN
countries, dating back to the 1960s. Their presence however is insignificant in
aggregate terms. Businesses by the Indian Diaspora, particularly trading companies,
were quite adversely affected by the 1997 East Asian crisis. Many are yet to fully
recover from it.
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However, as the reform process gathers momentum, and as the regulations
permitting foreign investments by the Indian companies, particularly by those in the
(Information and Communication Technology (ICT) sector, become more and more
liberal (the 2001-2002 Indian Budget substantially liberalizes such investments), the
presence of Indian companies in ASEAN is likely to grow. Unlike in the earlier period,
their presence will be motivated by economic efficiency and profitability criteria and
not by the desire to escape restrictive business environment at home.
Tourism Services
In ASEAN, Indonesia, Malaysia, Philippines, and Singapore have developed
considerable expertise and competitive advantage in tourism services. In recent
years, Vietnam is also developing into an important tourist destination.
India on the other hand has only very recently realized the need to implement
an integrated tourism industry which will induce not only substantially larger number
of international visitors than the current 2.2 million per year, but also provide
conducive atmosphere and money- for- value services to increase their expenditure
per day. India has a substantial domestic tourism sector, and this could be leveraged
for the above purpose.
In 1996, the year before the East Asian crisis, tourism receipts were highest
for Thailand (US $ 8.7 billion), followed by Singapore (US $ 8.0 billion), Indonesia
(US $ 6.1 billion), Malaysia (US $ 4.1 billion), India (US $ 3.0 billion), and the
Philippines (US $ 2.7 billion) (Table 5).
Trends in visitors arrivals from India to ASEAN-5 indicate that the total
number of visitors have increased from 421.4 thousand (2 percent of total visitors) in
1992 to 578.6 thousand (2.1 percent of total visitors) in 1999 (Table 6). In 1999,
Singapore attracted nearly half of all Indian visitors to ASEAN-5, followed by
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Thailand 31.3 percent, Malaysia and Indonesia about 8 percent each, and
Philippines 3.2 percent (Table 6). Malaysia has recently been taking aggressive
steps to make up for the missed opportunities in developing the Indian tourism
market. Thus, in 2000, Indian visitors to Malaysia increased by 217 percent to 140
thousand (Business Standard, New Delhi, February 6, 2001). (http://www.businessstandard.
com)
The flow of ASEAN visitors to India is quite small. While data is not available
for ASEAN countries, in 1998, visitors from Singapore to India numbered only 54
thousand (Sen et al. 2000, p.22). As similar imbalance in tourism flows is likely to
prevail with respect to other ASEAN countries, the balance of trade in tourism
services is likely to significantly favor ASEAN countries.
Manpower Flows
ASEAN’s rapid economic growth has led to manpower shortages at all skill
levels, particularly in Singapore, Malaysia, and Thailand. The 1997 crisis did affect
the demand for foreign talent in ASEAN for the limited period. However, their
resurgence from the crisis has once again revived the need for the foreign talent. In
India on the other hand, supply of manpower has exceeded demand. There are
therefore complementarities between the two in this area. The world- wide shortage
of talent, particularly in the ICT sector, has also increased the demand for talent from
India as its manpower is internationally competitive, English speaking, and
accustomed to operating in multi-cultural environment. Increasing presence of the
same Western MNCs in both ASEAN and India has also been a contributory factor in
manpower flows from India. Unfortunately, no data are available on the manpower
flows.
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IV Emerging Economic Opportunities between ASEAN and India
The discussion in the previous sections has suggested that there is both a
willingness and increasing capacity to purposefully explore emerging economic
opportunities in ASEAN and in India. This will require involvement of ASEAN as an
organization and India, as well as exploration of emerging economic opportunities on
a bilateral basis with India.
ASEAN-India
ASEAN as an organization has an important role to play in facilitating trade
and investments. The ASEAN Free Trade Area (AFTA), and the ASEAN Investment
Area (AIA) have laid the foundation for greater cooperation among the ASEAN
members. ASEAN holds a large number of technical meetings on wide range of
subjects relating to trade facilitation, technology, particularly IT, and standards.
ASEAN may consider permitting India to participate as an observer in selected
technical meetings relating to trade facilitation and standards. ASEAN and India
could also use their dialogue partner relationships to expand technological
cooperation, educational exchanges, and rules governing movement of natural
persons, and E-commerce.
To further strengthen the institutional base for engagement, and to forge Asia
wide cooperation, India’s participation in ASEAN plus Three (China, Japan, and
South Korea) annual meeting; or alternatively, holding of ASEAN- India annual
summit merits serious considerations.
Indonesia- India
The emerging opportunities between Indonesia and India exist in a wide
range of areas from food and energy security to infrastructure and human resource
development. India is seeking to diversify its conventional energy sources, and
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significantly increase exploration of oil in its territory. Indonesia possesses enough
expertise in this area as well as in the nuclear power sector, providing considerable
scope for energy cooperation.
For both countries, food security is an important area of concern. This will
require application of biotechnology, and other knowledge-intensive activities to
improve the productivity in the agricultural sector. Both countries would also need to
encourage food-processing industries. India also has considerable shortages of
cooking oil, while Indonesia is emerging as a major palm oil producer. Thus, there
exist significant avenues to enhance the cooperation in food security. Besides, India
has also a major importer of forest products while Indonesia is a major exporter,
which indicates another potential area of expansion of bilateral trade.
India could also cooperate with Indonesia in pharmaceutical and health care
sectors. Indonesia is heavily dependent on imported drugs and health care
equipments. Indian pharmaceutical companies are internationally competitive in
certain areas particularly in generic drugs which are much cheaper than branded
drugs.
Another important area of economic cooperation between the two countries
could be in the area of infrastructure development particularly in railways, aviation
etc. and in commercialization of space activities in which India is emerging as a
competitor.
Given the recent developments in the ICT sector in India, the two countries
also benefit from cooperating in the area of Information and Communication
Technology, particularly in the area of development of human resources and in that
of software programmes in Bahasa Indonesia. Another area of cooperation that
holds promise concerns the entertainment & media sector. Firms from the two
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countries could consider joint production of films, television programs, and Internet
content for both domestic and international audiences, particularly those whose main
language is Malay.
As Indonesia continues its recovery from the 1997 crisis, there are prospects
for the emergence of Indian Diaspora in Indonesia, centering on professional and
technical personnel. This development will also have a positive impact on economic
relations between the two countries.
Malaysia-India
In recent months, the two countries have shown some urgency in exploring
substantial complementarities existing between them. There is however considerable
room for further progress in laying institutional foundations for bilateral cooperation;
and for providing appropriate political signals from Malaysia concerning its
cooperation with India.
Malaysia has in recent years, particularly before the 1997 crisis, made
substantial investments in expanding capacities in selected infrastructural areas
such as airports, seaports, highways, and information technology. It is also aiming to
reduce its dependence on the infrastructural facilities in Singapore in its international
trade. The large capacities which it has built-up require large volumes to be
economically viable. India could be one of the trading partners to assist Malaysia in
this respect. Encouragement of direct linkages between the two countries could be
one such measure.
Malaysia aims to be an important centre for information technology. It has
invested heavily in requisite infrastructure facilities, but lacks a critical mass of talent
in the ICT sector. India is an internationally recognized source of such talent.
Malaysia needs to woo this talent on a significant scale if it is to realize its objectives.
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The Indian talent could also be leveraged to develop software an E-commerce
services in the Malay language, and to take advantage of the opportunities in
entertainment and multi-media activities.
India is currently is a centre for medical education for Malaysian students. The
cooperation between the two countries in the education sector could be widened to
other areas, such as management and information technology. Given the rapidly
rising health care costs in Malaysia, opportunities exist in health care activities, and
in generic and other drugs, including for the HIV-AIDS. Some Indian companies from
the health and pharmaceutical sectors already have presence in Malaysia, but the
two countries could consider strengthening it.
Malaysia on its part is in a strong position to assist India in providing
infrastructure expertise and investments; and in the energy sector. The Indian
government has recently signed an MoU with the Malaysian government for roads
(Business Standard, New Delhi, January 15, 2001). The Malaysian government will
bring in equity for this project. The energy sector companies from the two countries
could cooperate with each other in oil and gas exploration and in downstream
processing activities.
Malaysia possesses considerable strength in the plantations sector,
particularly in research on rubber. India’s need and low level of development in this
sector therefore could provide opportunities for mutually beneficial cooperation,
particularly as Malaysia’s wage levels require it to restructure more labour intensive
aspects of its plantations sector.
Myanmar-India
Myanmar and India have only recently begun to lay a foundation for closer
economic relations. This has been achieved through a series of recent bilateral
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visits. The two share a 1600 kilometre long border; and Myanmar’s strategic location
as a gateway to ASEAN from India’s Northeast, an area India wants to develop for
both economic and security reasons, have provided an impetus for cooperation.
Currently, the main emphasis is in developing road and banking links.
In 1999-2000, the two-way trade was US $ 217 million, with Myanmar’s
exports being US $ 141 million. Indeed, India is now Myanmar’s largest export
market. Its exports are mainly forest products, and agricultural commodities, such as
pulses. Given Myanmar’s isolation from the Western world, it can reap significant
benefits from economic cooperation with India.
There are emerging bilateral opportunities in infrastructure sector such as
roads and ports; hydroelectric and hydrocarbon sectors, particularly in natural gas;
and in technological cooperation in such areas as agriculture and natural resource
monitoring. Indeed, in February 2001, Myanmar-India friendship center for Remotes
Sensing and Data Processing was inaugurated. The center has capabilities in
weather forecasting, determination of forest cover and other land-use delineations;
ground water survey, and other areas. The two countries should also consider
reestablishing banking and other financial institutional linkages.
Philippines-India
The existing economic relations between the two countries are rather limited
(Tables 2-4). The end of the Cold War has not significantly altered the world view of
the policy makers and the elites in the Philippines who have traditionally been rather
indifferent towards their relationship with India.
There are however, indications that in selected areas, greater cooperation
between the two countries may emerge. Thus, the government of Philippines has
used importation of selected drugs from India to enhance contestability in the sector
22
and thus reduced the pricing power of the domestic manufacturers. This shift at the
margin from nearly exclusive concentration on producers to consumer interests
holds promise as Indian pharmaceutical companies are internationally competitive,
particularly in generic drugs which are cheaper. Whether this shift will be retained by
the Philippines government however remains to be seen. But if it does, many drugs,
including those needed to treat HIV-AIDS could be sourced from India at affordable
prices.
Philippines and India are internationally competitive in selective niches in the
ICT sector. The business concept of competition through cooperation could be
applied by the ICT firms from both countries to pursue mutually beneficial
opportunities. As an example, one of India’s leading software companies is exploring
the feasibility of opening a major software development center in the Philippines that
will eventually employ about 2000 people. This is a sizeable commitment to the
development of the IT sector in the Philippines.
Indian companies are also exploring cooperation in the agricultural sector,
including research. Some of the Indian companies have been accredited to export
meat to the Philippines.
The potential network of the Indian alumni of the Asian Institute of
Management (AIM), many of whom are now in responsible positions in business in
India, has also not been fully exploited. This network may be an important avenue for
further economic linkages. The AIM, based in Manila, may consider taking the lead
in this regard, and strengthen its links with management institutes in India.
Singapore-India
While Singapore’s manufacturing base centering on electronics and
petrochemicals, and its role as an entrepot centre will continue to sustain the
23
merchandise trade, the emerging opportunities are largely in the services sector,
particularly in the Information and Communication Technology (ICT), logistics
services, business and financial services, tourism, and health services (Sen et. al.,
2000). This is more so as Singapore plans to develop itself into a service hub and
improve its capabilities in areas where there exist considerable complementarities
with India. The opportunities are not only in trade in services transactions (such as
used by Singapore Airlines of India as a base for some of its IT-enabled services)1,
but also in investments (presence of Indian ICT, Pharmaceutical, and trading
companies in Singapore, and Singapore’s investments in India’s ICT, tourism and
health services, besides in port development and logistics). The probable
involvement of Singapore’s polytechnics in technical education in Tamil Nadu, and
perhaps other states, could further strengthen bilateral linkages.
The Info-Comm Development Authority of Singapore (IDA) has signed an
MoU with India’s premier IT training company, National Institute of Information
Technology (NIIT) to persuade IT professionals to locate in Singapore, from
anywhere in the world. As Indian professionals are internationally competitive and
culturally compatible, India is among the largest sources of IT manpower in the
world, a significant proportion is likely to be sourced from India. This could create a
dynamic Indian Diaspora with positive externalities for both countries. The
investments by Singapore Telecom (SingTel) in India’s telecom sector in partnership
with India’s Bharti Televentures to take advantage of India’s huge potential domestic
telecom and Internet market is also another example in this sector.
In the tourism sector, opportunities are emerging rapidly for Singapore as
Indian tourists have become the highest spenders among tourists to Singapore and
1 Singapore Airlines has also bid with India’s Tata group for 26 percent stake in Air-India, currently a
government owned national carrier.
24
became the fourth largest revenue generating market in 1999, with growing affluence
among the Indian middle class. Singapore tourism authorities has also been actively
involved in promoting select areas in India as a tourism destination for
Singaporeans, through a joint marketing by the Government of India tourism office
already established in Singapore.
Indeed, Singapore’s two airlines, Singapore Airlines and Silk Air have quite
liberal rights to fly to several destinations in India. They could however take greater
advantage of India’s open sky policies concerning air cargo. In the logistics sector,
the Port of Singapore Authority (PSA) has been involved in port development and
management in Tuticorin in Tamil Nadu and Pipavav in Gujarat. These have the
potential to lead to major investment opportunities for other Singapore firms in the
logistics sector. Negotiations between Singapore’s largest supermarket operator,
NTUC Fairprice which has close links with the government, and India’s Apollo
Group, one of Asia’s largest hospital and health-care management companies to set
up a pharmacy and retail chain of convenience stores numbering in the hundreds in
petrol stations run by the Indian oil corporation also hold promise for greater
economic linkages (Saywell, 2001). It would contribute to Singapore’s food security,
and to its supply chain for other essential household goods.
Indian IT companies have recognized the importance of Singapore as a
marketing and development center, and their presence is growing. As Indian
businesses have been given much greater freedom to invest abroad, presence of
Indian companies from other sectors in Singapore is also increasing. This should
also have a positive impact on Singapore’s importance as a business hub, and on
trade in business services.
25
Singapore intends to increasingly rely at the margin on investment income
from abroad. Its rather large reserves, conservatively estimated to be about US $ 90
billion, are mostly invested abroad through holding companies of the Singapore
government. It is suggested that these holding companies consider passive
investments in infrastructure projects in India. Setting up of a physical presence in
India by the Singapore Government Investment Corporation (SGIC) , and other such
Singapore government investment companies merits serious consideration.
Currently, these holding companies do act in a limited way as venture capitalists for
Indian IT companies. However, there is much greater scope in not only the IT sector
but also in biotechnology, life sciences, and other areas. For these purposes also,
physical presence in India would be beneficial.
Thailand-India
The 1997 East Asian Crisis, which originated in Thailand, has severely
impacted the Thailand economy and its growth prospects. Several Thai companies
which had invested in India, had to restructure their operations. The bilateral trade
has also been affected adversely though its beginning to recover (Tables 2-4).
Thailand also traditionally had weak institutional linkages with India, e.g. Thailand’s
business and tourism; promotion agencies have not set up offices in India; and the
frequency of business delegations between two countries has been rather low. To
take advantage of emerging opportunities noted below, there is an urgent need for
greater political will backed up by concrete political signals for expanding economic
relations.
There are several areas where Thailand and India could cooperate for mutual
gain. As Thailand aims to develop knowledge-based economic activities, its current
constraints in professional and technical manpower, particularly in the IT sector,
26
have become more evident (Janviroj, 2000). There is a global competition for IT
talent. India is internationally recognized as a major source for such talent. Thus, the
two countries can cooperate in this area. If this pursued systematically, it will create
a critical mass of Indian Diaspora which can bring an additional dynamism, in the
relations between the two countries.
Consistent with international trends, Thailand is aging rapidly. Its healthcare costs
are expected to increase quite significantly due to population and individual ageing
and due to sexually transmitted diseases viz. HIV-AIDS. Thailand has undertaken
many innovative measures to address this issue, and greater cooperation between
Thailand and Indian pharmaceutical industry could be an element in containing
healthcare costs.
Another area for potential cooperation is the gems and jewellery sector. Both
Thailand and India have thriving gems and jewellery industry. Greater cooperation
between the two could provide each with competitive advantages in the international
arena.
Thailand’s expertise in food-processing industry, particularly in deep-sea fishing
and other marine related activities represent another area where cooperation is likely
to be fruitful.
The bilateral transactions are currently in favor of Thailand (Table 6). Bangkok is
an important tourism destination & hub for Indian visitors. Thailand’s facilities for
issuing visa to Indian passport holders at reasonable cost on arrival at the airport
holds particular lessons for other ASEAN countries if they desire to increase visitors
from India. There is however much further scope for expanding tourism services in
both directions. India, for example, could facilitate more entry points & frequency of
flights by the national air carrier of Thailand. The Thai carrier could consider taking
27
greater advantage of India’s open sky regime for air cargo. The two countries have
also not adequately explored the opportunities of heritage tourism; given that the
major Buddhist pilgrimage centers are located in India, while Thailand is a
predominantly Buddhist country.
Vietnam-India
The main challenge for Vietnam and India is to develop a substantial economic
and commercial content to their traditionally close political relationship. Economic
reforms being pursued by the two countries, and the increasing capacity of Indian
companies to invest abroad, provides a conducive context in which to undertake this
task.
India’s national oil company is already involved in a joint venture to explore oil
and natural gas in Vietnam. Thus, the two countries are already cooperating in the
energy sector, but there is scope for strengthening it. Cooperation in the civilian
nuclear power sector for energy is also feasible and desirable. Mineral exploration
and processing is another area which is being actively explored by the two sides.
For both the countries, food security is an important pre-occupation. While in
some commodities, such as rice, tea, and cashews, the two countries are in
competition, there are several other areas, particularly those relating to agricultural
research, and biotechnology where the scientists from the two countries could
fruitfully cooperate. Facilitating trade and investments in agro-chemicals and
fertilizers also merit serious consideration.
As Vietnam aims to develop its ICT sector, cooperation between the companies
from the two countries, particularly in human resource development, and in
development of software in the Vietnamese language represents another avenue of
emerging opportunities. The two countries could also cooperate in the area of
28
pharmaceuticals and healthcare, particularly in the area of sourcing drugs for
diseases like HIV-AIDS.
V Concluding Remarks
The previous sections have discussed the factors which have contributed to the
positive dynamics in India-ASEAN relations. During the 1990s, ASEAN as an
organization, and many of its members demonstrated greater willingness to enhance
economic and political relations with India. There are more contentious issues
between the two sides as was the case during the Cold War period. India now has
greater capacity and economic and technological momentum to sustain its growth in
the 21’st century. Encouraging acceptance of Indian capabilities in the ICT sector in
particular has perceptibly altered the environment in which India’s relations with
major powers, particularly the United States are being conducted. This has had a
positive impact on India-ASEAN relations as well.
The previous sections have also indicated the emerging economic opportunities
between India and ASEAN. These are primarily in the ICT sector; biotechnology, and
life sciences; infrastructure; logistics; tourism services; educational services;
manpower flows; and in commercial use of nuclear and space technologies.
This paper has stressed that while the general areas of emerging opportunities
overlap, to realize these opportunities, India will need to evolve strategies and tactics
both with ASEAN as an organization, and bilaterally with each individual country.
Both sides have much to gain from cooperating with each sector. Some bilateral
relationships however, will not be able to realize the potential unless high-level
political decision is made to do so. Thus, Malaysia has been rather slow to take
29
advantage of India’s tourism potential; and to pursue an aggressive strategy to
leverage India’s strengths in ICT to its advantage.
Cooperation between ASEAN and India in various multilateral fora, such as the
WTO, particularly on issues relating to the workings of Intellectual Property rights
regime involving access to life-saving drugs at affordable prices could bring mutual
benefits.
India needs to vigorously pursue its “Look East” policy, and continue its efforts to
engage each and every ASEAN member in a mutually beneficial manner. It would
therefore need to considerably strengthen its emphasis on commercial diplomacy,
and coordination between business associations and diplomatic missions. ASEAN
on the other hand, is strongly urged to facilitate India’s participation in all regional
fora in which it has considerable leverage. Some of the ASEAN countries,
particularly Malaysia, Singapore, and Thailand need to enhance the presence of
their commercial and promotional agencies in India to build on the existing bilateral
relations. ASEAN countries may also consider further measures to attract
professional and technical talent from India, and to better utilize the possibilities
provided by the presence of the Indian Diaspora, the way United States has done.
Continued nurturing of the relations along these lines by the two sides is essential to
translate the emerging economic opportunities into reality.
References
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Investment cooperation, Jakarta, ASEAN Secretariat, February.
Asher, M. 1997. “ASEAN- India Economic Relations: A Good Beginning but
Continued Nurturing Need”, In M.L Aranal-Sereno and J.S. Santiago (editors), The
ASEAN: Thirty Years and Beyond. Quezon City: Institute of International Legal
Studies, University of the Philippines Law Center, pp 223-243.
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Baruah, A. 2001a. “India-ASEAN engagement will come about: Mahathir”, The
Hindu, February 2.http://www.the-hindu.com/stories/0506134a.htm
Baruah, A. 2001b. “India steps up efforts towards engaging Myanmar”, The Hindu,
February12. http://www.the-hindu.com/stories/03120005.htm
Center for Strategic and International Studies (CSIS), 2000. “India Looks East”, CSIS
South Asia Monitor, No.23, July 6. http://www.csis.org/saprog/sam23.html
Janviroj, P. 2000. “Thailand must join global battle for IT staff”, The Nation,
(Bangkok), March 29.
Jayanth,V. 2000. “Nasscom signs MoU with Singapore”, The Hindu, November 12,
http://www.the-hindu.com/stories/06120006.htm
Joshi, M. 2001. “Vajpayee woos Vietnam with infotech” The Times of India, January
9.
www.timesofindia.com
Khanna, V. 2000. “India and East Asia: huge Synergies to tap”, Business Times,
(Singapore), May 5.
Lim, S.B. 2001. “Political Instability hinders growth of ASEAN economies”, The
Straits Times, Singapore, January 1.
Nageswaran, V.A. 2001. “A thumbs-up for Mr. Sinha”, The Business Line, (India),
March 1.
Parikh, K. 1999. “India Development Report 1999-2000”, New Delhi, Oxford
University Press.
Rajan, R, Sen, R., and Siregar, R. “Singapore and the New Regionalism: Bilateral
Economic Relations with Japan and the U.S”, mimeo.
Saywell, T. 2001. “Singapore’s New India Play”, Far Eastern Economic Review,
January 25, pp.49-50.
Sen, R., Asher, M.G., and Rajam, C. 2000. India and Singapore: Emerging Trade
Opportunities and Challenges, Singapore: Centre for Advanced Studies, National
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p 61.
“Space: the New Business Frontier, Business India, April 21-May 4, 1997, pp. 53-59.
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Sridharan, K. 1996. The ASEAN Region in India’s Foreign Policy, Aldershot:
Dartmouth Publishing Co.
The Economist (London), 2001. “India’s Breakthrough Budget”, March 3, pp. 27-28.
Thornhill, J., 2001. “Enter the Dragon”, The Financial Times (London), February 20.
World Bank, 2001. World Development Report, 2000/2001, Washington D.C: The
World Bank.
World Travel and Tourism Council (WTTC), 1998. Economic Impact of Travel and
Tourism in India, London: WTTC.
Yogarajah, A.2001.“Liberalization and its Impact on Foreign Direct Investment in
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Singapore.
32
Chart 1
Trends in India's Merchandise Exports, Imports and Total Trade
with ASEAN-6 1991-92 to 1999-2000
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-2000
Years
US $ billion
Exports to ASEAN-6
Imports from ASEAN-6
Total Trade with ASEAN-6
33
Chart 2
Share of India's Trade with ASEAN
1991-92 to 1999-2000
0
3
6
9
12
15
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-2000
Years
(%)
Share of India's Exports to ASEAN
Share of India's Imports from ASEAN
Share of India's Total trade with ASEAN
34
Chart 3
Country-wise share of India's Exports to ASEAN-6
1991-92 to 1999-2000
0
0.5
1
1.5
2
2.5
3
3.5
4
1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-
2000 Year
% Indonesia Malaysia Philippines Singapore
Thailand Vietnam
35
Chart 4
Share of India's Imports from ASEAN-6
1991-92 to 1999-2000
0
2
4
6
8
10
12
1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000
Year
%
ASEAN-6 Indonesia Malaysia Philippines
Singapore Thailand Vietnam
36
Chart 5
India's Balance of Merchandise trade with ASEAN-6
1991-92 to 1999-2000
-2000
-1500
-1000
-500
0
500
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-2000
Year
$ U.S million
Indonesia Malaysia Philippines Singapore
Thailand Vietnam
37
Chart 6
Trends in share of ASEAN-3 in Tourist arrivals from India
1992 to 1999
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
1992 1993 1994 1995 1996 1997 1998 1999
Year
%
Singapore Malaysia Thailand
38
Chart 7
Trends in visitor arrivals from India to ASEAN-3
1992 to 1999
0
50
100
150
200
250
300
350
1992 1993 1994 1995 1996 1997 1998 1999
Year
millions
Singapore Malaysia Thailand
39
Table 1
INDIA AND ASEAN: SELECTED INDICATORS
GNP Country Population Million (1999) (1999) GNP Per Capita (1999)
US $ Billion US $
FDI (1998) US $ Billion External Debt ODA*
current value PPP current valuea PPP US $ Billions % of GNP $ per capita % of GNP
India 998.0 442.2 2,144.1 450.0 2,149.0 2.6 98.2 20.0 2.0 0.4
ASEANb 450.0 519.4 1,547.3 1,154.2 3,438.4 19.0 352.0 67.8 8.3 c 1.3
Indonesia 207.0 119.5 505.0 580.0 2,439.0 -0.4 150.9 169.0 6.0 1.5
Malaysia 23.0 77.3 180.8 3,400.0 7,963.0 2.3 44.8 69.0 9.0 0.3
Philippines 77.0 78.0 292.9 1,020.0 3,815.0 1.7 47.8 66.0 8.0 0.9
Singapore 3.0 95.4 87.1 29,610.0 27,024.0 7.2 - - 1.0 0.0
Thailand 62.0 121.0 345.4 1,960.0 5,599.0 6.9 86.2 79.0 11.0 0.6
Vietnam 78.0 28.2 136.1 370.0 1,755.0 1.2 22.4 76.0 15.0 4.3
Notes:
- nil or negligible
a World Bank estimates based on the World Bank Atlas method.
b Excludes Brunei, Cambodia, Laos, and Myanmar as complete data are not available.
c Calculated as simple average of the six countries.
Source: World Bank, World Development Report, 2000/2001
40
Table 2
Trends in India's Merchandise Exports to ASEAN, 1991-92 to 1999-2000
(million US $)
India's Exports to 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000 (Apr-Sep.)
World Amount (US $ mn.) 17998.29 18538.76 22213.01 26337.5 31842.32 33497.98 34020.95 33651.03 37644.39 21373.4
Growth rate (%) n.a. (3.0) (19.8) (18.6) (20.9) (5.2) (1.6) -(1.1) (11.9) (21.1)
ASEAN-6 Amount (US $ mn.) 1022.27 1242.94 1675.12 1899.58 2672.83 2851.64 2353.07 1585.38 2199.37 1251.7
Growth rate (%) n.a. (21.6) (34.8) (13.4) (40.7) (6.7) -(17.5) -(32.6) (38.7) (23.7)
Share in ASEAN (%) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00)
Share in India's Total Exports (%) (5.7) (6.7) (7.5) (7.2) (8.4) (8.5) (6.9) (4.7) (5.8) (5.9)
Indonesia Amount (US $ mn.) 149.54 138.51 234.68 277.77 663.4 592.34 435.9 186.68 326.83 189.1
Growth rate (%) n.a. -(7.4) (69.4) (18.4) (138.8) -(10.7) -(26.4) -(57.2) (75.1) (45.9)
Share in ASEAN (%) (14.6) (11.1) (14.0) (14.6) (24.8) (20.8) (18.5) (11.8) (14.9) (15.1)
Share in India's Total Exports (%) (0.8) (0.8) (1.1) (1.1) (2.1) (1.8) (1.3) (0.6) (0.9) (0.9)
Malaysia Amount (US $ mn.) 203.9 189.85 247.03 286.57 393.75 531.58 481.82 317.69 435.52 254.5
Growth rate (%) n.a. -(6.9) (30.1) (16.0) (37.4) (35.0) -(9.4) -(34.1) (37.1) (15.4)
Share in ASEAN (%) (19.9) (15.3) (14.7) (15.1) (14.7) (18.6) (20.5) (20.0) (19.8) (20.3)
Share in India's Total Exports (%) (1.1) (1.0) (1.1) (1.1) (1.2) (1.6) (1.4) (0.9) (1.2) (1.2)
Philippines Amount (US $ mn.) 64.73 54.65 58.18 99.45 144.45 183.80 236.07 116.38 143.76 83.40
Growth rate (%) n.a. -(15.6) (6.5) (70.9) (45.2) (27.2) (28.4) -(50.7) (23.5) (17.1)
Share in ASEAN (%) (6.3) (4.4) (3.5) (5.2) (5.4) (6.4) (10.0) (7.3) (6.5) (6.7)
Share in India's Total Exports (%) (0.4) (0.3) (0.3) (0.4) (0.5) (0.5) (0.7) (0.3) (0.4) (0.4)
Singapore Amount (US $ mn.) 391.00 588.90 751.16 770.50 902.99 978.29 739.80 519.92 692.01 400.00
Growth rate (%) n.a. (50.6) (27.6) (2.6) (17.2) (8.3) -(24.4) -(29.7) (33.1) (21.2)
Share in ASEAN (%) (38.2) (47.4) (44.8) (40.6) (33.8) (34.3) (31.4) (32.8) (31.5) (32.0)
Share in India's Total Exports (%) (2.2) (3.2) (3.4) (2.9) (2.8) (2.9) (2.2) (1.5) (1.8) (1.9)
Thailand Amount (US $ mn.) 200.09 253.66 356.09 406.71 473.63 447.45 338.00 319.68 457.26 234.70
Growth rate (%) n.a. (26.8) (40.4) (14.2) (16.5) -(5.5) -(24.5) -(5.4) (43.0) (23.1)
Share in ASEAN (%) (19.6) (20.4) (21.3) (21.4) (17.7) (15.7) (14.4) (20.2) (20.8) (18.8)
Share in India's Total Exports (%) (1.1) (1.4) (1.6) (1.5) (1.5) (1.3) (1.0) (0.9) (1.2) (1.1)
Vietnam Amount (US $ mn.) 13.01 17.36 27.98 58.59 94.61 118.17 121.48 125.03 143.99 90.00
Growth rate (%) n.a. (33.4) (61.2) (109.4) (61.5) (24.9) (2.8) (2.9) (15.2) (28.6)
Share in ASEAN (%) (1.3) (1.4) (1.7) (3.1) (3.5) (4.1) (5.2) (7.9) (6.5) (7.2)
Share in India's Total Exports (%) (0.1) (0.1) (0.1) (0.2) (0.3) (0.4) (0.4) (0.4) (0.4) (0.4)
Source: Calculated from CMIE, Foreign Trade, various issues; CMIE, Monthly Review of the Indian Economy, January 2001.
41
Table 3
Trends in India's Merchandise Imports from ASEAN, 1991-92 to 1999-2000
Year 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000 (April-Sep.)
World Amount (US $ mn.) 19554.9 21883.47 23304.89 28662.22 36729.98 39165.46 41534.56 42379.20 47269.56 25647.7
Gr. (%) n.a. (11.9) (6.5) (22.9) (28.1) (6.6) (6.1) (2.0) (11.5) (11.7)
ASEAN-6 Amount (US $ mn.) 1274.59 1226.65 1101.67 1939.98 2688.02 2921.13 3382.27 4142.59 4949.29 2040.70
Gr. (%) n.a. -3.8 -10.2 76.1 38.6 8.7 15.8 22.5 19.5 -(16.0)
Share in ASEAN (%) (100.0) (100.0) (100.0) (100.0) (100.0) (100.0) (100.0) (100.0) (100.0) (100.0)
Share in India's total imports (%) (6.5) (5.6) (4.7) (6.8) (7.3) (7.5) (8.1) (9.8) (10.5) (8.0)
Indonesia Amount (US $ mn.) 67.40 59.97 119.52 322.31 461.83 599.16 732.51 828.92 991.97 511.10
Gr. (%) n.a. -11.0 99.3 169.7 43.3 29.7 22.3 13.2 19.7 (18.3)
Share in ASEAN (%) (5.3) (4.9) (10.9) (16.6) (17.2) (20.5) (21.7) (20.0) (20.0) (25.0)
Share in India's total imports (%) (0.3) (0.3) (0.5) (1.1) (1.3) (1.5) (1.8) (2.0) (2.1) (2.0)
Malaysia Amount (US $ mn.) 391.97 405.83 249.16 490.21 904.08 1042.24 1180.32 1610.38 2059.34 592.70
Gr. (%) n.a. (3.5) -(38.6) (96.7) (84.4) (15.3) (13.2) (36.4) (27.9) -(43.5)
Share in ASEAN (%) (30.8) (33.1) (22.6) (25.3) (33.6) (35.7) (34.9) (38.9) (41.6) (29.0)
Share in India's total imports (%) (2.0) (1.9) (1.1) (1.7) (2.5) (2.7) (2.8) (3.8) (4.4) (2.3)
Philippines Amount (US $ mn.) 31.54 9.78 5.94 11.78 21.50 16.46 27.77 37.25 56.67 22.00
Gr. (%) n.a. -(69.0) -(39.3) (98.3) (82.5) -(23.4) (68.7) (34.1) (52.1) (5.3)
Share in ASEAN (%) (2.5) (0.8) (0.5) (0.6) (0.8) (0.6) (0.8) (0.9) (1.2) (1.08)
Share in India's total imports (%) (0.2) (0.0) (0.0) (0.0) (0.1) (0.0) (0.1) (0.1) (0.1) (0.09)
Singapore Amount (US $ mn.) 696.28 632.14 626.11 899.95 1115.15 1064.21 1199.33 1383.85 1508.28 745.50
Gr. (%) n.a. -(9.2) -(1.0) (43.7) (23.9) -(4.6) (12.7) (15.4) (9.0) -(1.5)
Share in ASEAN (%) (54.6) (51.5) (56.8) (46.4) (41.5) (36.4) (35.5) (33.4) (30.5) (36.5)
Share in India's total imports (%) (3.6) (2.9) (2.7) (3.1) (3.0) (2.7) (2.9) (3.3) (3.2) (2.91)
Thailand Amount (US $ mn.) 48.86 58.32 57.15 171.65 169.95 197.36 233.60 273.05 321.34 162.90
Gr. (%) n.a. (19.4) -(2.0) (200.3) -(1.0) (16.1) (18.4) (16.9) (17.7) -(1.97)
Share in ASEAN (%) (3.8) (4.8) (5.2) (8.9) (6.3) (6.8) (6.9) (6.6) (6.5) (7.98)
Share in India's total imports (%) (0.2) (0.3) (0.2) (0.6) (0.5) (0.5) (0.6) (0.6) (0.7) (0.64)
Vietnam Amount (US $ mn.) 38.54 60.62 43.79 44.08 15.51 1.70 8.74 9.14 11.69 6.50
Gr. (%) n.a. (57.3) -(27.8) (0.7) -(64.8) -(89.0) (414.1) (4.6) (27.9) (61.1)
Share in ASEAN (%) (3.0) (4.9) (4.0) (2.3) (0.6) (0.1) (0.3) (0.2) (0.2) (0.3)
Share in India's total imports (%) (0.2) (0.3) (0.2) (0.2) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0)
Source: Calculated from Centre for Mointoring Indian Economy, Foreign Trade, various issues.
42
Table 4
India's Bilateral Balance of Merchandise Trade with ASEAN 6, 1991-92 TO 1999-2000.
(million US $)
Year Indonesia Malaysia Philippines Singapore Thailand Vietnam ASEAN 6 India/World *
1991-92 82.1 -188.1 33.2 -305.3 151.2 -25.5 -252.3 -1556.6
1992-93 78.5 -216.0 44.9 -43.2 195.3 -43.3 16.3 -3344.7
1993-94 115.2 -2.1 52.2 125.1 298.9 -15.8 573.5 -1091.9
1994-95 -44.5 -203.6 87.7 -129.5 235.1 14.5 -40.4 -2324.7
1995-96 201.6 -510.3 123.0 -212.2 303.7 79.1 -15.2 -4887.7
1996-97 -6.8 -510.7 167.3 -85.9 250.1 116.5 -69.5 -5667.5
1997-98 -296.6 -698.5 208.3 -459.5 104.4 112.7 -1029.2 -7513.6
1998-99 -642.2 -1292.7 79.1 -863.9 46.6 115.9 -2557.2 -8728.2
1999-2000 -665.1 -1623.8 87.1 -816.3 135.9 132.3 -2749.9 -9625.2
2000 (Apr-Sep.) -322.00 -338.20 61.40 -345.50 71.80 63.50 -809 -4274.3
Source: Calculated from Centre for Mointoring Indian Economy, Foreign Trade, various issues.
Note: * India's overall Balance of Trade
43
Table 5
Tourism Receipts of ASEAN-5 and India : 1988-97
(US $ million)
Thailand Philippines Singapore Malaysia Indonesia ASEAN-5 India
Share in Share in Share in Share in Share in
Amount Gr. ASEAN-5 Amount Gr. ASEAN-5 Amount Gr. ASEAN-5 Amount Gr. ASEAN-5 Amount Gr. ASEAN-5 Gr. Gr.
1988 3121 28.2 1301 11.8 2622 23.7 745 6.7 1283 11.60 11060 1500
1989 3753 20.2 29.2 1465 12.6 11.4 3307 26.1 25.8 1038 39.3 8.1 1285 0.2 10.01 12837 16.1 1535 2.3
1990 4326 15.3 27.1 1306 -10.9 8.2 4596 39.0 28.7 1667 60.6 10.4 2105 63.8 13.16 15990 24.6 1513 -1.4
1991 3923 -9.3 24.8 1281 -1.9 8.1 4560 -0.8 28.8 1530 -8.2 9.7 2522 19.8 15.95 15807 -1.1 1757 16.1
1992 4829 23.1 25.4 1674 30.7 8.8 5499 20.6 28.9 1768 15.6 9.3 3278 30.0 17.22 19040 20.5 2120 20.7
1993 5013 3.8 22.6 2122 26.8 9.6 6998 27.3 31.6 2050 16.0 9.2 3988 21.7 17.99 22164 16.4 2001 -5.6
1994 5762 14.9 22.5 2283 7.6 8.9 7396 5.7 28.8 3440 67.8 13.4 4785 20.0 18.65 25660 15.8 2265 13.2
1995 7664 33.0 26.2 2454 7.5 8.4 8337 12.7 28.5 3607 4.9 12.3 5228 9.3 17.85 29285 14.1 2609 15.2
1996 8664 13.0 27.5 2701 10.1 8.6 7958 -4.5 25.3 4093 13.5 13.0 6087 16.4 19.32 31499 7.6 2963 13.6
1997 7048 -18.7 33.2 2831 4.8 13.3 6843 -14.0 32.3 2497 -39.0 11.8 n.a n.a n.a 21216 -32.6 3152 6.4
Source : UN-ESCAP, Statistical Yearbook for Asia and the Pacific, 1999
44
Table 6
Trends in Visitor Arrivals from India in ASEAN-5
(Number in Thousands)
1992 1993 1994
Total
Visitors
Share of
Indian
Visitors from
India
Share in Total
Visitors
Share of
Indian
Visitors from
India
Share in Total
Visitors
Share of
Indian
Visitors from
India
Share in
Countries Number visitors to
ASEAN-5
Number total
visitors
Number visitors to
ASEAN-5
Number total
visitors
Number visitors to
ASEAN-5
Number total
visitors
Singapore 5989.9 58.2 245.3 4.1 6425.8 61.8 233.7 3.6 6899.0 58.2 225.0 3.3
Indonesia 3064.2 3.7 15.6 0.5 3403.1 3.9 14.8 0.4 4006.3 5.4 21.0 0.5
Malaysia 6016.2 11.3 47.5 0.8 6503.9 4.1 15.4 0.2 7197.2 5.7 21.9 0.3
Thailand 5136.4 25.0 105.2 2.0 5760.5 27.9 105.4 1.8 6166.5 27.9 107.8 1.7
Philippines 1153.0 1.9 7.9 0.7 1372.1 2.4 9.0 0.7 1573.8 2.8 10.8 0.7
ASEAN-5 21359.7 100.0 421.4 2.0 23465.4 100.0 378.1 1.6 25842.8 100.0 386.6 1.5
1995 1996 1997
Total
Visitors
Share of
Indian
Visitors from
India
Share in Total
Visitors
Share of
Indian
Visitors from
India
Share in Total
Visitors
Share of
Indian
Visitors from
India
Share in
Countries Number visitors to
ASEAN-5
Number total
visitors
Number visitors to
ASEAN-5
Number total
visitors
Number visitors to
ASEAN-5
Number total
visitors
Singapore 7137.3 54.9 238.2 3.3 7292.5 55.3 253.2 3.5 7198.0 48.7 226.6 3.1
Indonesia 4324.2 7.4 32.0 0.7 5034.5 5.9 26.9 0.5 5185.2 9.7 44.9 0.9
Malaysia 7468.7 6.4 27.7 0.4 7138.5 7.0 32.0 0.4 6210.9 6.2 28.9 0.5
Thailand 6451.6 28.5 123.7 1.9 7192.1 28.3 129.8 1.8 7294.0 31.6 147.3 2.0
Philippines 1760.1 2.9 12.4 0.7 2049.4 3.5 16.1 0.8 1171.6 3.8 17.7 1.5
ASEAN-5 27141.9 100.0 434.0 1.6 28707.0 100.0 458.0 1.6 27059.7 100.0 465.5 1.7
1998 1999
Total
Visitors
Share of
Indian
Visitors from
India
Share in Total
Visitors
Share of
Indian
Visitors from
India
Countries Number visitors to
ASEAN-5
Number total
visitors
Number visitors to
ASEAN-5
Number
Singapore 6242.0 48.4 243.6 3.9 6958.0 49.8 288.4 4.1
Indonesia 4606.4 8.5 42.9 0.9 4727.5 7.6 44.1 0.9
Malaysia 5550.7 6.7 33.7 0.6 7317.6 8.0 46.5 0.6
Thailand 7842.7 32.2 162.1 2.1 8651.3 31.3 181.0 2.1
Philippines 2149.4 4.2 20.9 1.0 n.a 3.2 18.6 n.a
ASEAN-5 26391.2 100.0 503.2 1.9 27654.4 100.0 578.6 2.1
Source: Yearbook of Tourism Statistics, World Tourism Organization (WTO), various issues,
WTO Tourism Market Trends 1999, Statistik Indonesia, 1999, Philippines Statistical Yearbook, 1999, Statistical Yearbook of Thailand, 1999
and Pacific Asia Travel Association (PATA) Annual Statistical Report, 1999