EEPC

India-ASEAN Engineering Trade:
An Assessment

Released at the inauguration of a four-day webinar series
INDIA–ASEAN Engineering Partnership Summit
24–27 August, 2021

Associate Sponsor

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Ms Rachna Shah Department of Commerce,
Additional Secretary Ministry of Commerce &
(ASEAN Division)
Industry,Government of India

Message

ASEAN-India relationship is rooted in deep cultural ties, power generating machines and telecommunications
people-to-people contact and shared economic goals. etc has registered impressive growth.
ASEAN engagement forms the cornerstone of India’s Act I am happy to note that EEPC is organising the
East Policy and Indo-Pacific strategy. A strong, unified India-ASEAN Trade in Engineering and Allied Sectors
and prosperous ASEAN contributes to prosperity and Partnership Summit. In the backdrop of the pandemic,
security in the Indo-Pacific region. ASEAN and India, it is essential to improve trade facilitation and promote
with their economic and political complementarities, active business-to-business relations to maintain free
have a critical role to play in sustaining the optimism flow of goods across the borders. The book which is
and prosperity in the region at a time when the global being brought out will provide necessary information
order confronts the challenges posed by the Covid19 to enhance trade between India and ASEAN and I hope
pandemic. India has been closely engaging with ASEAN the readers will find it insightful.
in evolving effective regional and global strategies in I convey my best wishes for the success of the
this regard and in maintaining the resilience of supply India-ASEAN Partnership Summit.
chains in the region.
Sd/-
India’s trade and economic partnership with (Rachna Shah)
ASEAN has strengthened over the years and the region Additional Secretary (ASEAN Division)
has emerged as the fifth-largest trading partner for India.
The growth in engineering exports from India to ASEAN
is especially noteworthy and these constitute approx
40% of India’s exports to the region. The demand for
engineering goods in categories such as iron and steel,
nonferrous metal products, industrial machinery and
office equipment, internal combustion engine, pumps
and valves, repair machinery, electrical equipment,

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From the Chairman’s Desk

India-ASEAN Engineering Partnership Summit is an continued organising trade fairs and exhibitions in the
initiative of EEPC India with support from the Ministry of ‘New Normal’ virtual mode in order to help the Indian
External Affairs, Government of India, and Department exporting community keep the connectivity chain intact
of Commerce, Government of India. Commencing from with the global buyers.
24 August 2021, this virtual summit will continue for
four days where more than 30 eminent speakers from India maintains a very warm and cordial tie
government, industry, and academia will address 12 with Southeast Asia since its very independence and
thematic sessions on different aspects of India-ASEAN this relationship has been reshaped, redefined, and
bilateral relations. It will be the biggest platform for reinvigorated in phases with the formation of ASEAN in
engineering businesses in both India and ASEAN 1967, initiation of India’s Look East policy (LEP) in the
to explore each other in a much efficient manner in early 1990s and then the Act East Policy (AEP) in 2014.
order to reinvigorate bilateral trade and investment in Meanwhile, the India-ASEAN Free Trade Agreement in
engineering. 2009 and initiation of the strategic partnership in 2012
has made the relationship dynamic.
EEPC India has been the face of Indian engineering
exports for the last 65 years and has played a key role ASEAN is a region with growing importance in the
in taking engineering shipments from India to $81 economic order of the world and is set to emerge as
billion from as low as $10 million in 1955. As the the fourth-largest economy by 2050 after US, China,
premier trade and investment promotion organisation and India. As a region, ASEAN is the third-largest
in India catering to the Indian engineering sector destination for India’s engineering exports after EU
under the aegis of Ministry of Commerce and Industry, and North America. Bilateral trade between India and
Government of India, EEPC India has been instrumental ASEAN is expected to double by 2025 and engineering
in promoting Brand India Engineering by organising is to play a lead role in enhancing bilateral trade as
several trade fairs and exhibitions every year across both the regions see contribution of engineering
the globe. Even at the time of the pandemic we have exports at around one-fourth of merchandise exports.
The time, therefore, is very right to explore the potential

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of bilateral trade and investment between these two and will be shared among all the Ministries, Speakers,
promising regions. Participants, participating Bilateral Chambers, Indian
Missions in ASEAN bloc, ASEAN missions in India and
To coincide with the virtual summit, EEPC India also among the member-exporters of EEPC India.
is releasing this book on India-ASEAN trade and
investment ties with a focus on engineering and the I strongly believe this Summit will open a new
MSME sector. The book covers several important horizon for India-ASEAN economic relations with a
aspects of enhancing bilateral trade and investment and focus on engineering and this book will help businesses
also provides exhaustive information on India and ten from both sides to take informed decisions in order to
ASEAN nations. This book will be widely disseminated tap the markets of each other more extensively.

(Mahesh Desai)
Chairman, EEPC India

Engineering important for both partners

India shares a strong commercial relationship with its and has truly acted as a bridge between the industry
ASEAN partners. The trade and investment exchanges and the government. The organisation has repeatedly
have increased significantly in the last decade in various innovated itself to facilitate our engineering exporters
sectors. Among these, engineering has emerged as a even during the recent trying times.
particularly important sector for both the partners. It
is rightly believed that given the right opportunities The Partnership Summit promises to bring
India and ASEAN can participate in a regional value together a host of experts from industry and academia
chain that would accrue benefit to the entire South for discussions on various aspects of the India-ASEAN
and Southeast Asian region. Therefore, continuous partnership in the engineering sector and its future
exchange of information between the various industry prospects. The conclusion of this summit envisages
stakeholders in both India and the ASEAN region is bringing out some key suggestions for the government
important. The India-ASEAN Engineering Partnership as well as the industry to take the partnership forward
Summit, an initiative by EEPC India with support from in a mutually beneficial way. On the occasion of the
the Ministry of External Affairs and Department of Summit, EEPC India is also releasing this book which
Commerce, Government of India, is aimed at continuing looks into the India-ASEAN commercial relationship in
this exchange of dialogues and ideas between the engineering sector with special focus on connectivity,
experts in both India and the ASEAN region. SME interaction, and technological exchange.

EEPC India is one of the largest trade and I congratulate the entire team of EEPC India for
investment promotion organisations under the organising this summit and wish them all the best for
Government of India. With around 13,000-strong its success.
membership across various engineering sectors, EEPC
has been instrumental in promoting India’s engineering (Arun Garodia)
products in the global platform. It has also been Vice-Chairman, EEPC India
actively involved in the government’s policymaking

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From the desk of
Past Chairman and Chairman of the Committee on Trade

with ASEAN Countries,EEPC India

India has always maintained a cordial relation with flows grew from $52.59 billion in 2010 to $ 73.65 in
all the 10 ASEAN member countries. The trade and 2020.
economic partnership with ASEAN has strengthened
over the years and the region has emerged as the India and ASEAN countries have a significant number
fifth largest trading partner for India. This relationship of MSMEs and companies in different sectors creating
progressed from the ‘Look East Policy’ in the early ample opportunities for formation of gainful regional
1990s and this led India to become a Sectoral Partner value chains. Engineering is one such promising sector
of ASEAN in 1992, a Dialogue Partner in 1996 and a with considerable scope of creating such value chains.
Summit-level Partner in 2002. A landmark milestone The chain of network is tied together by EEPC India -a
to this partnership was; when it transformed into a premier trade and investment promotion organisation
Strategic Partnership during the celebration of 20th under the aegis of Ministry of Commerce & Industry,
anniversary Commemorative Summit at New Delhi in Government of India which is instrumental in promoting
2012. Brand India Engineering by organizing several trade
fairs and exhibitions every year across the globe.
India and ASEAN countries are working together in Even at the time of Pandemic EEPC India continued
various areas such as agriculture, regional connectivity, organizing trade fairs and exhibitions in the ‘New
institutional connectivity, infrastructure development, Normal’ virtual mode in order to help Indian exporting
space cooperation, renewable energy, tourism, people community keep the connectivity chain intact with the
to people connectivity and maritime cooperation and global buyers.
signed various regional and bilateral trade agreements.
These regional and bilateral trade agreements have One such initiative by EEPC India is the India-ASEAN
undoubtedly contributed to the growth of bilateral trade Engineering Partnership Summit with the support
between India and ASEAN countries. Bilateral trade from Ministry of External Affairs, Govt. of India and

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Department of Commerce, Govt. of India. Commencing EEPC India is also releasing an E-Book on India-ASEAN
from 24th August 2021, this virtual summit will trade and investment tie with a focus on engineering
continue for four days where more than 30 eminent and MSME sector. The book covers important aspects of
speakers from government, industry and academia will enhancing bilateral trade and investment opportunities
address 12 thematic sessions on different aspects of and also provides complete information on India and
India-ASEAN bilateral relation. ten ASEAN countries.

I wish the event good luck.

(T. S. Bhasin)

Past Chairman and Chairman of the
Committee on Trade with

ASEAN Countries,EEPC India

Message

Lying between India and East Asia, the ASEAN region Department of Commerce, Government of India has
has emerged as a very important partner for India in organised a virtual partnership summit that is expected
commercial terms. India shares considerable length of to continue the bilateral dialogue between our industrial
its border with Myanmar, a part of ASEAN which is of communities. The summit which brings a number of
intrinsic advantage to the relationships between the two experts on the same virtual podium envisages bringing
regions. Additionally both India and the ASEAN region up some key suggestions at the conclusion which would
has the presence of MSMEs and are ideal partners to strengthen the trade and investment relations between
forge a regional value chain. The increasing importance India and the ASEAN partners. On the occasion of this
of the region in India is evident from the Government of virtual seminar, EEPC India has also come up with
India’s erstwhile ‘Look East Policy’ which was further this e-book which delves into the different nuances
modified to the ‘Act East Policy’. of commercial relations between India and its ASEAN
partners.
Engineering is an important sector of collaboration
between India and the ASEAN region. With this in I sincerely feel that the summit and the book would be
mind, EEPC India has continued to organise a number of help to the experts and industry members of both
of exhibitions and stakeholder meets which have India an ASEAN. I hereby congratulate my colleagues
resulted in considerable increase in bilateral trade and in EEPC for organising this and wish them all the best.
investment. Now, in these tough times when physical
exhibitions are becoming difficult to organise, EEPC (Rakesh Shah)
India with support from Ministry of External Affairs and Past Chairman and
Chairman,PED Committee,EEPC India

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Long History of Shared Culture

India and ASEAN countries have a long history of shared significance of connectivity, commerce, and culture as
culture, heritage, and similar value system, learning the key drivers for deepening India-ASEAN integration
from each other from cultural and trade exchanges. by taking into account the blueprints of the three pillars
India’s relationship with ASEAN countries has evolved of the ASEAN community-building efforts, i.e. ASEAN
at all levels: economic, social, and political, and is as an 2025 – Forging Ahead Together, the ASEAN Master
important and integral feature of our foreign policy. This Plan for Connectivity 2025, and the Initiative for ASEAN
relationship progressed from the ‘Look East Policy’ in Integration Work Plan III.
the early 1990s and this led India to become a Sectoral
Partner of ASEAN in 1992, a Dialogue Partner in 1996, An expanding strategic partnership between
and a Summit-level Partner in 2002. A milestone to India and ASEAN countries has played a pivotal role
this partnership was reached when it transformed into in shaping their economic and trade ties. India and
a Strategic Partnership during the celebration of the ASEAN countries are working together in various
20th anniversary Commemorative Summit at New areas such as agriculture, regional connectivity,
Delhi in 2012. All these developments have happened institutional connectivity, infrastructure development,
only in the one decade which clearly underlines the space cooperation, renewable energy, tourism, people-
importance of economic and strategic partnership to-people connectivity and maritime cooperation.
between two natural partners. India and ASEAN signed a framework agreement on
comprehensive economic cooperation in 2003 which
The India-ASEAN strategic partnership got a new eliminated tariff barriers among all the members and
dimension when India transformed its Look East Policy eventually established a Free Trade Area in Goods,
to Act East Policy in 2014. It clearly conveyed the Services and Investment. This was followed by the
message to all that India will emphasise on up-scaling India-ASEAN Free Trade Agreement on trade in goods in
its economic and business engagement with the 2009 and a service agreement in 2015. Besides, India
ASEAN member-states to support the vision of a vibrant has also signed bilateral agreements with various other
ASEAN Community.The Act East Policy underscores the members such as Thailand, Singapore, and Malaysia to

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further deepen trade and investment linkages with the economic prosperity and will pave the way for faster
region. socioeconomic transformation of both India and ASEAN
countries.
These regional and bilateral trade agreements
have undoubtedly contributed to the growth of bilateral As the world economy recovers, greater economic
trade between India and ASEAN countries. Bilateral integration between India and ASEAN would again
trade flows grew from $52.59 billion in 2010 to $73.65 take momentum, which would facilitate integration in
in 2020. However, the onslaught of global pandemic all fields thereby shaping larger economic integration
Covid19 has led to a deceleration in trade flows in the particularly in the post Covid19 world. A strong
recent times. I believe, rather I have conviction, that India-ASEAN partnership would also strengthen
it would remain a temporary phenomenon and trade multilateralism which the world desperately needs at
in goods, services and flow of investment both ways, this juncture to foster a rule-based global economic and
will rebound given the trade complementarities that political order. This will certainly contribute to broaden
exists in our steady and stable economic partnership. A and deepen trade and investment linkages between
mutually-benefitting convergence in our economic and India and ASEAN countries in the days to come.
strategic interests gives credence to huge potential for

(Suranjan Gupta)
Executive Director, EEPC India

CONTENT

PROLOGUE 20

Chapter 1

India-ASEAN Strategic Relations 29
34
Chapter 2 41
137
Integrating Engineering RVCs: Role of ASEAN-India FTA 146
153
Chapter 3 163

Country Factsheets with Export Opportunities

Chapter 4

Connecting India with ASEAN

Chapter 5

Role of engineering MSMEs in strengthening India-ASEAN regional production network

Chapter 6

India-ASEAN Partnership in Technology and Opportunities for Engineering Sector

Chapter 7

Conclusion and the Way Forward

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PROLOGUE

India – A Global Player Calling Global Businesses

India’s integration into the global economy through sustained economic growth over the past
decade has made India a global player in the true sense. India is now fast approaching the
centre of the global economic order. The third-largest economy of Asia is now the bull’s eye for
leading businesses across the globe for the following reasons:

Remarkable economic progress

• As much as $1 trillion was added to GDP in just five years between 2013-14 and 2018-19
and the government has set the roadmap for a $5 trillion economy by 2024

• One of the fastest growing economies with an average annual growth of 6.7% in the
last decade before the emergence of Covid

• India’s real GDP to record a growth of 11% in 2021-22, the highest since independence
and India to become the fastest-growing economies in the world by 2023-24

• Significant achievement in poverty alleviation with over 271 million lifted out of
poverty in ten years to 2016 as per UNDP.

Demographic dividend

• India will continue to have one of the youngest populations in the world till 2030

• India has the third-largest group of scientists and technicians in the world.

World class infrastructure: Plethora of opportunities for global investors

• The government announced the National Infrastructure Pipeline (NIP), first-of-its-kind
initiative to provide world-class infrastructure across the country

• Nearly 7000 projects across different sectors costing above Rs100 crore per project and
totalling Rs111 lakh crore have been identified

• Strategically important sectors like energy (24%), roads (18%), urban (17%) and railways
(12%) amount to around 71% of the projected infrastructure investments in India.

Noticeable improvement in business sentiment led by a number of reforms

• The incumbent government since its very inception adopted a series of long-pending reform
measures to make India a more competitive economy on the global platform.

• First-of-its-kindinitiativeslikeMakeinIndia,DigitalIndia,SmartCitiesMission,etchavecre
ated substantial scope for overseas businesses to participate in India’s process of economic
development and turn India into a Global Investment Hub.

• GST, the biggest tax reforms since independence, paved the way for a common national
market

• As a consequence of business-friendly policies of the government, inbound FDI has been
rising continuously since 2012-13 and estimated to have reached an all-time high of $81.72
billion in 2020-21

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• Interest rate has also remained very much business conducive for the last few years
• India secures uplift of 67 ranks in the Doing Business Ranking of the World Bank Group
from 130 in 2017 to 63 in 2020, a noteworthy achievement rarely seen by any country.
Exemplary response to escape the pandemic shock
• Prime Minister Narendra Modi announced a special economic and comprehensive
package of nearly Rs30 lakh crore, which is equivalent to 15% of India’s GDP, under the
Atmanirbhar Bharat Abhiyaan (self-reliant India) announced in three phases.
Rising economic influence
• Centre of global maritime trade to move from the Pacific to the Indian Ocean region.
India and China will be the largest manufacturing hubs of the world by 2030
• Connectivity will be established with Central Asia and Europe via the International
North-South Transport Corridor (INSTC), leading to greater influence of India in Asia
Pacific, Central Asia, and Europe.

Source: World Bank; Economic Times; Invest India

GENERAL INFORMATION

Languages spoken:
English and Hindi
Country code:
+91

Economic information

Particulars Unit 2018 2019 2020
GDP at current prices $ billion 2701.11 2870.50 2708.77
Per capita GDP 1996.95 2098.93 1964.88
Real GDP growth $
Population Percentage (%) 6.53 4.04 -7.97
Inflation (average CPI) 1352.62 1367.60 1378.60
Total merchandise export million
Total merchandise import Percentage (%) 3.43 4.76 6.20
Total engineering export 324.00 323.25 275.49
Total engineering import $ billion 509.27 478.88 367.98
Ease of Doing Business $ billion 77.99 78.90 68.67
$ billion 94.93 94.04 71.61
$ billion
Rank 100 77 63

Source: For National Accounts Data – World Economic Outlook Database, IMF, link: https://www.imf.org/en/Publications/WEO/weo-
database/2021/April; For Trade data: ITC Trade Map; For Doing Business Rank: World Bank Doing Business Reports

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INDIA’S PARTICIPATION IN FREE TRADE AGREEMENTS AND PREFERENTIAL TRADE AGREEMENTS
Following is the list of FTAs/PTAs either in force or proposed or under negotiation where India is a participating
nation.
FTAs/PTAs in force
• ASEAN-India Comprehensive Economic Cooperation Agreement
• India-Japan Comprehensive Economic Partnership Agreement
• India-Singapore Comprehensive Economic Cooperation Agreement
• India-Sri Lanka Free Trade Agreement
• India-Malaysia Comprehensive Economic Cooperation Agreement
• India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement
• India-Republic of Korea Comprehensive Economic Partnership Agreement
• South Asian Free Trade Area
• Asia Pacific Trade Agreement
• India-Chile Preferential Trading Agreement
• Global System of Trade Preferences – PTA
• Agreement of Cooperation with Nepal to Control Unauthorised Trade
• Agreement on Economic Cooperation between India and Finland
• Trade Agreement between India and Argentina
• India Afghanistan PTA
• India MERCOSUR PTA
• Agreement of Trade, Commerce and Transit between the Government of the Republic of India and the Royal
Government of Bhutan
FTAs/PTAs under negotiation
• Bangladesh, India, Myanmar, Sri Lanka, Thailand Economic Cooperation
• India-Thailand Free Trade Area
• India-EU Bilateral Trade and Investment Agreement
• Australia-India Free Trade Agreement
• India-New Zealand Free Trade Agreement

• India-Indonesia Comprehensive Economic Cooperation Arrangement

• India-Egypt Preferential Trade Agreement

• India-Israel Free Trade Agreement

• India-Southern African Customs Union Preferential Trade Agreement

• India-Canada Economic Partnership Agreement

• India-Eurasian Economic Union

• India-Peru Free Trade Agreement

• India-Iran Preferential Trade Agreement

• India-Gulf Cooperation Council Free Trade Area

• Regional Comprehensive Economic Partnership (involving ten ASEAN member nations, and China, Japan,
South Korea, Australia, New Zealand, and India): Negotiations launched in 2013, other 15 countries have
signed but negotiation with India is ongoing.

FTAs and PTAs proposed/under study

• India-Uruguay Preferential Trading Arrangement
• India-Venezuela Preferential Trading Arrangement
• India-Russian Federation Comprehensive Economic Cooperation Agreement
• India-Colombia Preferential Trading Arrangement
• India-Turkey Free Trade Agreement
• Comprehensive Economic Partnership for East Asia (CEPEA/ASEAN+6)
• India-People’s Republic of China Regional Trading Agreement
• India-Taipei,China FTA
• India-Ecuador FTA
• Georgia-India FTA
• India-United Kingdom FTA
• Bangladesh-India Free Trade Agreement
• India-Philippines PTA

Link:https://commerce.gov.in/international-trade/trade-agreements/ https://aric.adb.org/fta

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EXISTING FTA WITH ASEAN

The ASEAN-India FTA in Goods came into existence in the year 2010. The agreement became further comprehensive
with the signing of the Agreement on Trade in Services and Investment. Further information can be obtained in the link:
https://commerce.gov.in/international-trade/trade-agreements/india-asean-agreements/

INDIA’S TRADE RELATIONS WITH ASEAN

Bilateral merchandise trade between India and ASEAN recorded an impressive increase between 2016 and 2019 with a
CAGR of 12.2% to $91.29 billion before declining in 2020 to $73.65 billion due to the adverse impact of the pandemic.
Bilateral engineering trade witnessed an ever better performance with a higher CAGR of 20.65% between 2016 and
2019 to reach $25.18 billion but then dropped to $19.23 billion in 2020 due to the pandemic. The following table
shows bilateral trade figures for the last five completed years.

Particulars Unit 2016 2017 2018 2019 2020
India’s total merchandise export to ASEAN $ billion 26.41 35.46 36.25 34.25 29.62
India’s total merchandise import from ASEAN $ billion 38.22 45.29 57.51 57.04 44.04
India’s total engineering export to ASEAN $ billion 7.39 10.08 9.00 12.51 10.62
India’s total engineering import from ASEAN $ billion 6.94 7.81 11.74 12.67 8.61
India’s share in ASEAN’s global merchandise Percentage (%) 2.45 2.82 2.54 2.46 2.30
import basket
India’s share in ASEA’s global engineering Percentage (%) 2.29 2.87 2.27 3.16 3.13
import basket

Source: ITC Trade Map

INDIA AND ASEAN: POTENTIAL ITEMS OF ENGINEERING TRADE

ASEAN as a region is the third-largest export destination of Indian engineering products after EU and North America.
Among the ASEAN member nations, Singapore and Malaysia are the fourth- and sixth-largest destinations for Indian
engineering products. Comprehensive scope for further expansion of bilateral trade is still left as engineering trade is far
from reaching its full potential. India’s trade complementarity index has been found at over 50 with most of the ASEAN
nations, which is reflective of a high match in India’s export pattern of engineering goods to ASEAN’s import pattern of
those goods.

The table shows potential engineering products for enhancing bilateral trade in engineering.

India’s exports to ASEAN: Potential engineering product groups ASEAN’s export to India: Potential engineering product groups
Electric machinery and equipment Industrial machinery for dairy, agriculture, food processing,
textiles, paper, chemicals, etc
Iron and steel Iron and steel
Industrial machinery for dairy, agriculture, food processing, Electric machinery and equipment
textiles, paper, chemicals, etc
Products of iron and steel Medical and scientific instruments
Aircrafts, spacecrafts and parts Ships, boats and floating structures
Medical and scientific instruments Copper and products made of copper
Motor vehicle/cars Aluminium and products made of aluminium
Auto components/parts Products of iron and steel
Aluminium and products made of aluminium Auto components/parts
Copper and products made of copper Air condition and refrigeration machinery and parts, industrial
furnaces, water heaters and centrifuges and compressor
Source: ITC Trade Map

INVESTMENT RELATIONS BETWEEN INDIA AND ASEAN

Singapore, the country with highest per capital income among all ASEAN member nations, is the largest investment
partner of India across the world after Mauritius. Singapore is the largest recipient of India’s outward FDI, receiving
around 20% of India’s global FDI outflows while it is the second-largest investor in India in terms of FDI with a share
of 22% in India’s global inbound FDI following the Double taxation Avoidance Agreement (DTAA) between India and
Singapore.

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The following table shows India’s bilateral investments with all ASEAN member nations.
India’s bilateral investments with ASEAN nations ($ million)

Country India’s outward FDI Apr-Mar 2020-21 India’s inbound FDI Apr-Mar 2020-21
Brunei 2.25 ---
Cambodia 36.46
Indonesia 952.09 50.17
Laos 23.38 638.61
Malaysia 642.83
Myanmar 677.65 ---
Philippines 902.13 1122.55
Singapore
Thailand 48328.18 8.99
Vietnam 427.00 335.73
ASEAN total 589.98 115089.11
Global 52581.95 637.67
Share of ASEAN in global (%) 244944.20 5.29
21.47 117888.12
Source: DIPP and DEA, Govt. of India 763576.00
15.44

India and ASEAN: Potential segments of engineering for bilateral investments
• Manufacturing: electronics, ship building, tools and dyes, furniture, garments, power and transport
• Automobiles and auto components
• Renewable energy (RE) sector
• Industrial machinery and appliances including parts and components
• Electrical machinery and equipment
• Iron and steel products
• Construction machinery

Source: MEA, DIPP, Govt of India

CHAPTER 1

India-ASEAN Strategic Relations

1.1 INTRODUCTION
The Association of Southeast Asian Nations, popularly known by its acronym, ASEAN, is an economic union in Southeast
Asia comprising 10 member-states, namely, Brunei, Cambodia, Lao PDR, Indonesia, Malaysia, Philippines, Singapore,
Thailand, and Vietnam. Over the years, this regional entity has become increasingly prominent due to its geopolitical
importance and economic structure. India, as a part of its strategy to exploit opportunities in emerging Asia and Africa,
has been emphasising on building multidimensional relationships with ASEAN since its very independence.

1.2 DIFFERENT PHASES OF INDIA-ASEAN RELATIONSHIP
The evolution of the India-ASEAN relationship can be categorised into five distinct phases:
1. Pre-colonial era: Predominance of socio-cultural and mercantile ties
2. Colonial era: Disruption of cultural and trade links
3. Post-independence: Re-establishment of links with increasing importance
4. Look East Policy (LEP): Reinvigorating the partnership with deeper commercial and strategic ties
5. Launching of Act East Policy (AEP): More inclusive relationship towards building a strong regional network

30

This chapter will discuss the transformation of the India-ASEAN relationship from the informal socio-cultural ties in
the pre-colonial era to the more inclusive bilateral relations of today, encompassing all aspects of social, political, and
economic affairs.

1.2.1 Pre-colonial era: Predominance of socio-cultural and mercantile ties

The initial links between India and the Southeast Asian region were basically socio-cultural with the spread of Hinduism
and Buddhism in these regions in the pre-colonial era. Mercantile links were very much an active component of the
relationship that formed the basis of carrying the relationship further.

1.2.2 Colonial era: Disruption of cultural and trade links

India’s ties with the Southeast Asian region that developed and grew in the pre-colonial era, lost pace with the
establishment of British colonial rule in the subcontinent. The social, cultural, trade, and maritime links that India had
developed with the Southeast Asian region over long years were totally disrupted during the British rule.

1.2.3 Post-independence: Re-establishment of links with increasing importance

After India gained independence in 1947, the country took various initiatives with a view to restore relationships with
different regions of the world and move towards regional integration among newly-independent countries in the Asian
and African regions. However, due to geopolitical disorders such as the Indo-China war and the Cold War, bilateral
relations could not firm up to the expected levels despite the formation of ASEAN in 1967.

1.2.4 Look East Policy: Towards a dynamic relationship

India started opening up its economy through a series of economic reforms in the early 1990s with the formulation
of the New Economic Policy (NEP). Then India officially launched its Look East Policy (LEP) in line with the objectives
of NEP and, with the implementation of the policy, the importance of the ASEAN region for India as a corridor to reach
Southeast Asia increased significantly. The LEP made the relationship dynamic in the true sense by leading India to
become a Sectoral Partner of ASEAN in 1992, a Dialogue Partner in 1996, and a Summit-level Partner in 2002.
The relationship was further reinvigorated with the signing of a Free Trade Agreement in Goods between India and
ASEAN in 2009 and then again in 2012 when India and ASEAN became Strategic Partners.
The purpose of LEP was essentially to strengthen India’s economic relations with Southeast Asia with the aim of
diversifying trade and moving away from its major trading partners, North America and Europe. On the other hand,
ASEAN member-nations also saw India as an option to reduce their economic dependence on China, Japan, and the
Western nations. LEP was considered a turning point in reinvigorating India’s partnership with the Southeast Asian
region.

Chapter 1

1.2.5 Act East Policy: A more inclusive approach

After the present government came to power in India under the leadership of Prime Minister Narendra Modi, policy
formulation went in for a major overhaul and LEP was replaced by a more inclusive Act East Policy (AEP). The India-
ASEAN Strategic Partnership acquired a new dimension with the announcement of the Act East Policy in the 12th
India-ASEAN Summit in 2014 with a clear intent on the part of India to up-scaling its engagement with the ASEAN. In
fact, AEP could well be considered as a facelift of LEP. While LEP concentrated primarily on trade and economy, AEP
was more multidimensional in nature, encompassing political security, connectivity, and social and cultural issues along
with trade and economic affairs as the focus areas of action for a greater ASEAN-India integration. The India-ASEAN
Trade-in-Services and Investment Agreement signed in 2014 came into effect in 2015.
Implementation of the FTAs in 2010 and 2015, building a strategic partnership, and multidirectional approach of the
AEP has made the India-ASEAN relationship dynamic as well as vibrant of late. The AEP emphasised strengthening the
cooperation with extended neighbours and stronger relations with the big powers by keeping ASEAN as the region of
core interest.

1.3 25 YEARS OF ASEAN-INDIA DIALOGUE PARTNERSHIP

In 2017, India and ASEAN celebrated 25 years of their Dialogue Partnership, 15 years of Summit-level interaction, and
five years of Strategic Partnership both in India and in ASEAN member-states. The celebrations involved conducting
key activities in various sectors of bilateral engagement to highlight the strengths of the relationship. The activities
included ASEAN-India Ministerial/Business Meet in the Telecom sector on the sidelines of the Telecom Expo; 6th Global
Economic Summit with special session on Women Entrepreneurs in ASEAN; Act East Dialogue; Kolkata Dialogue;
Northeast Business Summit with focus on Connectivity with ASEAN; ASEAN-India Biztech Conference in Kuala Lumpur;
and ASEAN-India Roundtable – 25 years of Partnership. By 2017, there were 30 annual institutional mechanisms for
dialogue between India and ASEAN.

32

1.4 CURRENT STATUS: TOWARDS A MORE VIBRANT RELATIONSHIP

1.4.1 Connectivity
Strengthening regional connectivity network, including land and sea connectivity, with ASEAN is one of the key
strategic objectives of the India-ASEAN relationship. The signal effort under the ASEAN-India Connectivity initiative is
the India-Myanmar-Thailand Trilateral Highway. The India-Myanmar-Thailand Trilateral Task Force on Connectivity and
Infrastructure has been set-up to take up time-bound work on completion of the Trilateral Highway and also undertake
negotiations on the Motor Vehicles Agreement. India and ASEAN are holding consultations on extension of the Trilateral
Highway to Laos, Cambodia, and Vietnam. India and ASEAN are also working to strengthen Maritime Connectivity.

1.4.2 Economic cooperation
Discussions on economic or commercial relations between India and the ASEAN are limited by the scope of this chapter.
However, the very next chapter will present a detailed analytical discussion on development of trade and investment
relations between India and ASEAN over the years.

1.4.3 17th ASEAN-India Summit, 2020

The centrality of ASEAN in India’s Act East Policy was underlined by the Indian Prime Minister who also underscored
the importance of strengthening convergence between India’s Indo-Pacific Oceans Initiative and the ASEAN Outlook
on Indo-Pacific, to ensure a free, open, inclusive and rules-based Indo-Pacific region at the 17th ASEAN India Summit
in 2020. Major announcements by the Indian Prime Minister was contribution of $1 million to the Covid-19 ASEAN
Response Fund and extending $1 billion Line of Credit to support ASEAN connectivity.

1.4.4 China as an economic superpower in ASEAN region

China’s presence in the ASEAN nations is much wider and more deeply entrenched in comparison to any other nations.
In fact, it was one of the major driving forces behind all India’s endeavours, though implicit, to enlarge its footsteps in
this promising region. The trade and investment volumes of China with ASEAN nations are far ahead of other partners
and China has also built a solid connectivity network to deepen its economic engagement with this region. On the other
hand, India’s rise as a prominent global power and the rising Chinese engagement in ASEAN tempted ASEAN countries
to welcome India’s increased presence in the region. Being fully aware of the opportunities offered by ASEAN for Indian
trade and investments, the LEP and, specifically, the AEP, were well-thought-out, logical, and multifaceted organising
principles advocated by India to enhance its participation in ASEAN and also to reciprocate to China’s ascendancy in
the region but without any conflict.

Chapter 1

1.5 WAY FORWARD: PLAN OF ACTION FOR 2021-25

Over the years, India and ASEAN have become increasingly important to each other and have together been trying
to set up rules-based order for the region in the Indo-Pacific framework. During the last India-ASEAN Summit in
November 2020, a new ASEAN-India Plan of Action (PoA) for 2021-2025 was adopted by both the participants. Through
the implementation of this PoA, ASEAN and India have decided to work towards supporting the ASEAN community-
building and integration process, building a politically cohesive, economically integrated, socially responsible, and a
truly people-oriented, people-centred and rules-based ASEAN, narrowing the development gap and enhancing ASEAN
connectivity. Both sides will also further promote cooperation in addressing common and emerging challenges and
enhance coordination in other international fora on issues of common concern to contribute to overall peace, stability
and prosperity.

References
1. https://asean.org
2. https://www.jagranjosh.com
3. Reports by Ministry of External Affairs, Govt of India
4. Research Article published by Jawaharlal Nehru University, International Studies

34

CHAPTER 2

Integrating Engineering RVCs: Role of ASEAN-India FTA

2.1 INTRODUCTION

Favourable demographics, rising middle class, growing disposable income, and recent business-friendly policy reforms
in both South Asia and the ASEAN countries are some of the common factors driving growth in both the regions. This,
in turn, has created increased trade opportunities for the countries in this region. As the largest economy in South Asia,
India has witnessed its trade relations with the ASEAN region growing significantly in the last decade. Both India and
ASEAN are strong emerging economies offering large and diversified markets, and cheap labour and cost of production
which are creating mutual trade opportunities for the two partners.
The total trade between India and ASEAN trebled since 2009. India is the 11th-largest export partner for the ASEAN
region, while the ASEAN region is the fourth-largest trade partner for India. In 2019-20, India’s total trade with the
ASEAN region was to the tune of $86.9 billion compared to $56.2 billion in 2010-11. Based on their mutual trade
opportunities, the two partners have pledged to increase their bilateral trade to $300 billion by 2025.

2.2 ASEAN-INDIA FREE TRADE AGREEMENT

2.2.1 Trade in Goods Agreement
The ASEAN-India Trade in Goods Agreement was signed in 2009 and brought into force in 2010. Under the agreement,
India and ASEAN decided to progressively eliminate tariffs of 80 percent of the tariff lines accounting for 75 percent
of the trade. India and all the ASEAN countries have maintained country-wise lists of exclusion from proposed tariff
concessions or elimination.
The time period for elimination or reduction of tariffs under the various tariff categories such as normal tracks 1 and 2,
sensitive track, special products, and highly sensitive track for non-CLMV nations barring Philippines was decided to be
2019; 2022 for Philippines; and 2024 for Cambodia, Lao PDR, Myanmar and Vietnam (CLMV). Tariff concessions in the
agreement are offered either through tariff elimination or tariff reduction. Table2.1 itemises the agreed tariff reduction
or elimination framework for different categories of tariff lines among the ASEAN member-states and India.

Chapter 2

Table 2.1: Tariff reduction and elimination framework on Trade in Goods Agreement

Category Brunei, Malaysia, Indonesia, India and Philippines India and Myanmar,
Normal Track 1 Singapore, Thailand and Cambodia, Lao PDR,
Normal Track 2 India
Vietnam
Sensitive Track MFN tariff rates reduced to MFN rates to be reduced to
0% by 2013 0% by 2018 MFN rates to be reduced to
0% for India by 2013 and for
CLMV by 2018

MFN tariff rates to be reduced MFN tariff rates to be reduced MFN rates to be reduced to

to 0% by 2016 to 0% by 2019 0% for India by 2016 and for

CLMV by 2021

1. MFN rates to be reduced to 1. MFN rates to be reduced to 1. MFN rates to be reduced to

5% by 2016 5% by 2019 5% by 2021

2. Other than 50 tariff lines, 2. Other than 50 tariff lines, 2. Other than 50 tariff lines,
MFN rates to be reduced to MFN rates to be reduced to MFN rates to be reduced to
4.5% upon entry into force of 4.5% upon entry into force of 4.5% by 5 years for CLMV
the Agreement. the Agreement.

3. Preferential tariff rates to be 3. Preferential tariff rates to be 3. Preferential tariff rates to be

reduced to 4% by 2016 reduced to 4% by 2019 reduced to 4% by 2021

4. Applied MFN tariff rates on 4. Applied MFN tariff rates on 4. Applied MFN tariff rates on
4% of the tariff lines placed in 4% of the tariff lines placed in 4% of the tariff lines placed in
the sensitive track (as will be the sensitive track (as will be the sensitive track (as will be
identified by each partner) will identified by each partner) will identified by each partner) will
be eliminated by 2019 be eliminated by 2022 be eliminated by 2024

Special Products MFN tariff rate to be reduced MFN tariff rate to be reduced MFN tariff rate to be reduced
(Applicable for India) to 37.5% for crude oil, 50% to 37.5% for crude oil, 50% to 37.5% for crude oil, 50%
for pepper, 45% for palm oil, for pepper, 45% for palm oil, for pepper, 45% for palm oil,
Highly Sensitive Track coffee and black tea by 2019 coffee and black tea by 2019 coffee and black tea by 2019
(not applicable to Brunei, Lao,
Myanmar, Singapore) MFN tariff rates to be reduced MFN tariff rates to be reduced MFN tariff rates to be reduced
to 50% (Category 1), 50% to 50% (Category 1), 50% to 50% (Category 1), 50%
Exclusion List (Category 2) and 25% (Category 2) and 25% (Category 2) and 25%
(Category 3) by 2019 (Category 3) by 2022 (Category 3) by 2024

Exclusion Lists shall be subject Exclusion Lists shall be subject Exclusion Lists shall be subject

to an annual tariff review with to an annual tariff review with to an annual tariff review with

a view to improving market a view to improving market a view to improving market

access access access

Source: Ministry of Commerce and Industry and EXIM Bank

36

2.2.2 Trade in Services and Investment Agreement
The ASEAN-India Trade in Services and Investment Agreement was signed in 2014 and came into effect in 2015.
While the Services Agreement mainly deals with factors such as transparency, domestic regulations, market access,
national treatment, dispute settlement, and denial of benefits, the Services Agreement primarily focuses on protection
of investment and non-discriminatory treatment to ensure fair and equitable service to investors of both countries.

2.3 IMPACT OF FTA ON MERCHANDISE AND ENGINEERING TRADE

Since the signing of the FTA, India’s total merchandise exports to the ASEAN increased from $18.1 billion in 2009-10
to $31.5 billion in 2019-20. On the other hand India’s imports from the ASEAN during the same period increased from
$25.8 billion to $41.8 billion. From Figure1 it is evident the rate of increase in exports have been higher than that of
imports. It should be mentioned that India always had a negative trade balance with ASEAN due to its dependency on
the ASEAN partners for key resources including petroleum oil, palm oil and minerals.

Figure2.1: India’s Merchandise Trade with ASEAN (2009-10 to 2020-21 (Apr-Feb))

70

Export CAGR: 2.3% 59.3
60 Import CAGR: 6.8% 55.4

(2009-10 to 2019-20)

50 47.1
42.2 42.9 41.3 44.7 39.9 40.6
41.8

$ billion 40 36.7 37.5

33 33.1 33.1 34.2 31.5
30.6 31

30 25.8 25.6 25.1 27.3

20 18.1

10

0
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21
(Apr to
Feb)

India's exports to ASEAN India's Imports from ASEAN

Source: DGCI&S

Chapter 2

In comparison to merchandise trade, India’s total engineering trade with the ASEAN region increased at a higher rate
as is evident from Figure2.2.

Figure2.2: India’s engineering trade with ASEAN, 2009-10 to 2020-21 (April-February)

14 Engg. Export CAGR: 4.6% 12.8 12.7
Engg. Import CAGR: 11.1% 11.3 10.5
12 (2009-10 to 2019-20)
10.2 9.6 9.7
10 7.4 8
7.8 8.1 9.2
8 6.3 7.1 8.5
5.9
$ billion 7 7.4 7.3 7.4
6 4.9 6.1
3.9 6

4

2

0

2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

(Apr to

Feb)

India's Engg. Exports to ASEAN India's Engg. Imports from ASEAN

Source: DGCI&S

38

Therefore, within merchandise sectors, engineering holds a significant prospect of expansion in bilateral trade.
Table2.2 lists some of the potential sectors for bilateral trade.

Table2.2: Potential sectors for bilateral trade

No. Sectors India’s share in ASEAN’s
import basket (%)

1 Electrical machinery and equipment 1

2 Industrial machinery for dairy, agriculture, food processing textiles and chemicals 2

3 Motor vehicles/ cars 3

4 Auto components and parts 2

5 Medical and scientific instruments 1

6 Air condition and refrigeration machinery and parts, industrial furnaces, water 2
heaters and centrifuges and compressor

7 Cranes, lifts and winches 1

8 Other construction machinery 2

9 Machine tools 0.5

10 Products of iron and steel 1

11 Ships, boats and floating structures 0

12 Bicycle and parts 0

13 Hand tools, cutting tools and implements 1

14 Pumps of all types 2

15 Aircraft, spacecraft and parts 1

Source: ITC Trade Map

Investment flow has also substantially grown between the two partners. ASEAN countries accounted for 18.28
percent of India’s total FDI inflow between 2000 and 2018. During the same period, FDI inflows from ASEAN to India
were to the tune $68.91 billion. On the other hand, as per DEA, between 2007 and 2015, outflow of investment from
India to the ASEAN countries was to the tune of $38.67 billion.

Chapter 2

2.4 BUILDING REGIONAL VALUE CHAINS: ROLE OF AIFTA

In today’s world, global value chains are an important feature of global trade, accounting for 70 percent of its total share.
GVCs lead to integration of supply chains among nations, resulting in outsourcing and fragmentation of production in
various locations. Participation in GVCs has a number of benefits including reduced cost of manufacturing and trading
of participating countries. This is especially true for the developing economies as UNCTAD estimates that value added
trade in developing countries contribute nearly 30 percent of the country’s GDP while for developed countries it is only
18 percent. Therefore, GVCs have been the crucial link between trade expansion and development.

The advent of the Covid19 pandemic, however, has shown us the weakness of a large global value chain. Compared
to large GVCs, smaller regional value chains (RVCs) have shown better resilience in these difficult times. With UNCTAD
stating that RVCs are increasingly gaining importance in North America, Europe, and Southeast Asia, it is a clear
indication that these will continue to persist despite any chances of closing borders due to the pandemic.

A study by the Exim Bank in 2018 mentioned that while the ASEAN region is one of the highest contributors in the global
value chains, the participation has not be equal among all ASEAN countries. Compared to Malaysia, Indonesia, Thailand,
and Singapore, its CLMV counterparts have much lower participation in global value chains. India’s participation in
GVCs is also not very significant. Therefore, there is scope to integrate India’s economy with the CLMV region through
creation of RVCs. A study conducted by the Ministry of Commerce and Industry in 2015 suggested a three-pronged
strategy for integrating SMEs in India and their CLMV counterparts. These include:

a. Linking SMEs to large companies in CLMV
b. Linking SMEs to MNCs in CLMV
c. Linking SMEs to their counterparts in the CLMV countries

The study also suggested some potential sectors for creation of RVCs with the CLMV. The potential engineering
sectors are tabulated in Table2.3.

Table2.3: Country-wise potential engineering sector for RVCs in CLMV region

Country Potential sector
Cambodia Electrical and electronic equipment, auto-components, iron and steel and its products
Lao PDR Electrical and electronic equipment, iron and steel
Myanmar Auto-components, products of iron and steel, electrical and electronic equipment
Vietnam Auto-components, electrical and electronic equipment

Source: ‘India’s Strategy for Economic Integration with CLMV, 2015’: Study by Department of Commerce, Ministry of Commerce and
Industry

40

The AIFTA has been somewhat successful in creating value chains among India and its ASEAN counterparts, especially
the CLMV countries, but there is still significant untapped potential.

2.5 ISSUES AND WAY FORWARD

The full potential of AIFTA is restricted by several challenges which need to be addressed at the earliest. While relooking
at the FTA terms is a continuous process between the two partners, this chapter lists some of the challenges and tries
to suggest the way forward.
a. Non-tariff barriers: While the Agreement has been largely effective in reducing tariff barriers in almost 90
percent products, several non-tariff barriers in the form of import regulations and other technicalities have
limited the scope of trade expansion. The two partners need to set up joint monitoring committees to ensure
proper implementation of the FTA and identification of non-tariff barriers. Regarding technical standards and
regulations, there should be mutual recognition of institutions and standards.
b. High cost of compliance: The cumbersome process and administrative complexities of accessing
preferential routes adds to delay and higher compliance cost.This needs to be addressed and compliance cost
must be reduced.
c. Lack of awareness on preferential routes: In many instances the exporters are not aware of
the preferential agreements. The additional high compliance cost deters many to opt for preferential routes.
A study by Niti Aayog found that utilisation rate of FTAs in India is very low – ranging over 5-25 percent.
Therefore, along with reduction in compliance cost, exporters need to be made aware of the benefits of
FTAs.
The two partners must resolve these issues to take full advantage of the FTA and create the potential RVCs which will
ultimately benefit the MSMEs in both regions.

References
‘25 Years of India ASEAN Relations’ at mea.gov.in
‘A Note on Free Trade Agreements and Their Costs,’ Niti Aayog, 2018
‘India’s Strategy for Economic Integration with CLMV, 2015,’ Department of Commerce, Ministry of Commerce and Industry
‘India-ASEAN Economic Relation: Examining Future Possibilities,’ ORF Issue Brief, Issue No.221, January 2018
‘India-ASEAN: Co-creating the Future,’ KPMG for 4th ASEAN EXPO and Summit, 2019
‘Strengthening ASEAN-India Partnership: Trends and Future Prospects,’ Exim Bank, January 2018

CHAPTER 3

Country Factsheets with Export Opportunities

Brunei

I. KEY COUNTRY FACTS

Population :
0.44 million
Languages spoken:
Malay, Thai, Burmese, English
Currency:
Brunei Dollar (BND)
Country code:

+673

II. ECONOMIC PERFORMANCE

A. GDP at Current Prices (USD Billion)

14 13.568 15.00%
13.5 11.9%
13.47

10.00%

13 6.4% 12.016 5.00%
12.128 0.00%
12.5
-0.7%
12
11.5 11.399 -5.00%

11

10.5 -10.8% -10.00%
2020 -15.00%
10
2016 2017 2018 2019

GDP at Current Price Growth

Source: https://www.imf.org/en/Publications/WEO/weo-database/2021/April/select subjects?c=582

42

B. Per capita GDP at current prices ($)

32,000.00 30,668.8%3.76 10.00%
31,000.00
30,000.00 3.4% 29,314.11 5.00%
29,000.00 28,236.77 -4.4%
28,000.00 0.00%
27,000.00 27,318.05
26,000.00 2016 26,089.28 -5.00%
25,000.00
24,000.00 -11.0% -10.00%
23,000.00
-15.00%

2017 2018 2019 2020
GDP per capita Growth

C. Inflation (average CPI), percentage change

2.5 1.937

2

1.5

1

0.5

0

-0.5
-0.383

-1

-1.5

Source: https://www.imf.org/en/Publications/WEO/weo-database/2021/April/select-subjects?c=582

Chapter 3
BRUNEI

III. GLOBAL TRADE

A. Total merchandise exports vis-à-vis total merchandise imports ($ billion)

Total Merchandise Export Total Merchandise Import

6.51
4.12

7.25
5.1

6.61
5.32

2019 2020 2020

Source: ITC Trade Map

B. Total engineering exports vis-à-vis total engineering imports ($ billion)

Total Engineering Export Total Engineering Import

0.29
2.69

0.34
2.18

0.08
1.99

2018 2019 2020

Source: ITC Trade Map

44

C. Key rankings

Parameter Rank
Ease of Doing Business, 2020 66
Global Competitiveness Index, 2019 56
Global Innovation Index, 2020 71

Source: Ease of Doing Business Rankings taken from https://www.doingbusiness.org/en/ rankings?region=east-asia-and-pacific

Global Competitiveness Index Rankings taken from http://www3.weforum.org/docs/ WEF_TheGlobalCompetitivenessReport2019.pdf

Global Innovation Index taken from https://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_ 2020-intro4.pdf , jointly published by
Cornell University, WIPO and INSEAD

IV. EXISTING FREE TRADE AGREEMENTS (FTA)

Brunei has in total 10 FTAs which are signed and in-effect. Some of these are bilateral while others have been signed
as a member of ASEAN. These FTAs are:

u ASEAN Free Trade Area
Link: https://aric.adb.org/fta/asean-free-trade-area

u ASEAN-Korea Comprehensive Economic Cooperation Agreement
Link: https://aric.adb.org/fta/asean-korea-comprehensive-economic-cooperation-agreement

u ASEAN-Japan Comprehensive Economic Partnership
Link: https://aric.adb.org/fta/asean-japan-comprehensive-economic-partnership

Chapter 3
BRUNEI

u ASEAN-Hong Kong, China Free Trade Agreement
Link: https://aric.adb.org/fta/asean-hongkong-china-free-trade-agreement
u ASEAN-China Comprehensive Economic Cooperation Agreement
Link: https://aric.adb.org/fta/asean-peoples-republic-of-china-comprehensive-economic-cooperation-
agreement
u ASEAN-Australia and New Zealand Free Trade Agreement
Link: https://aric.adb.org/fta/asean-australia-and-new-zealand-free-trade-agreement
u Comprehensive and Progressive Agreement for Trans-Pacific Partnership
Link: https://aric.adb.org/fta/comprehensive-and-progressive-agreement-for-trans-pacific-partnership
u Brunei Darussalam-Japan Free Trade Agreement
Link: https://aric.adb.org/fta/japan-brunei-free-trade-agreement
Other than these FTAs as a member of ASEAN, Brunei is also part of negotiation in the Regional Comprehensive
Economic Partnership (RCEP), Comprehensive Economic Partnership for East Asia, and East Asia Free Trade Area.
https://aric.adb.org/fta/regional-comprehensive-economic-partnership

V. EXISTING FTA WITH INDIA

The ASEAN-India FTA in goods came into existence in the year 2010. The agreement became further comprehensive
with the signing of the agreement on trade in services and investment. Further information can be obtained in the link:
https://commerce.gov.in/international-trade/trade-agreements/india-asean-agreements/

VI. INDIA’S TRADE RELATIONS WITH BRUNEI

Between 2016 and 2020, India’s total trade with Brunei decreased by 0.8%. During the same time India’s total
engineering trade with Brunei increased by almost 33%. In 2020, Brunei became the 138th-largest merchandise
export destination for India and 103rd-largest engineering export destination.

46

A. India’s merchandise trade with Brunei ($ million)
CAGR of exports: 12.53% CAGR of imports: -2.18%

595.06 581.37

461.94 434.7 422.89

37.44 48.04 66.48 56.81 60.05

2016 2017 2018 2019 2020

India’s total merchandise export to Brunei India’s total merchandise import from Brunei

Source: ITC Trade Map

B. India’s engineering trade with Brunei ($ million)
CAGR of Exports: 32.95% CAGR of Imports: 34.62%

35.34 29.69 43.1
1.03
13.79 14.11

0.31 0.73 0.63 0.86

2016 2017 2018 2019 2020

India’s total engineering export to Brunei India’s total engineering import from Brunei

Source: ITC Trade Map

Chapter 3
BRUNEI

C. India’s share in Brunei’s total import basket: Merchandise vis-à-vis engineering (%)

2.50% 1.40% 1.56% 1.61% 1.36% 2.17%
2.00% 1.04% 0.84% 1.31% 1.11% 1.13%
1.50%
1.00%
0.50%
0.00%

2016 2017 2018 2019 2020
India’s share in Brunei’s merchandise import basket India’s share in Brunei’s engineering import basket

Source: ITC Trade Map

D. Potential items of export to Brunei in engineering and India’s position

In engineering, India is the 10th-largest supplier to Brunei. The major export items include automobiles, machinery and
parts, metals. The two countries have a significantly high trade complementarity index of around 71 in engineering
which implies there is significant scope for intraregional trade. India’s share in Brunei’s engineering imports, sector-
wise, is listed here.

Potential sectors for bilateral trade and investment ($ million)

Unit Brunei’s imports from world avg India’s share in Brunei’s import
(2017-19) basket (%)
Products of iron and steel 479.13 0.20
Motor vehicle/cars 228.89 5.29
Nuclear reactors, industrial boilers and parts 189.76 0.54
Electric machinery and equipment 165.79 0.34
Industrial machinery for dairy, agriculture,
food processing, textiles, paper, chemicals, 150.55 4.13
etc

Source: ITC Trade Map

48

VII. CONNECTIVITY BETWEEN INDIA AND BRUNEI

A. Port connectivity

There are five major ports in Brunei along with numerous smaller ports. The nearest biggest port to India is Port of
Muara, Brunei.

Location of port in India Distance with Muara Port Time taken to reach
(nautical miles) (days)
Chennai 2720 11.3
Kolkata
Mumbai 2847 11.9
Source: ports.com
3466 14.2

VIII. INDIA, BRUNEI DIPLOMATIC MISSIONS

High Commission of India
High Commissioner: H.E. Mr Ajaneesh Kumar
Address: Baitussyifaa, Simpang 40-22, Jalan Sungai Akar
Bandar Seri Begawan, BC 3915
Brunei Darussalam
Telephone: +673-2339947, 2339685, 2339751

High Commission of Brunei Darussalam
High Commissioner: H.E. Ms Nadiah Ahmed Rafie
Address: B-21 August Kranti Marg
Mayfair Gardens, Hauz Khas
New Delhi 110 016
Telephone: +91-011-26522431/32/33

Notes 1. Trade complementarity index: Provides information on prospects of intra-regional trade. It is defined by: TCij =
100{(1-sum[abs(Mik-Xij)/2]} where Mik implies the share of good i in country k’s total imports and Xij implies share of good i in Country
j’s total exports