The relationship between ASEAN and South Asia is entering a new phase as both regions respond to geopolitical shifts, economic restructuring, climate challenges, and evolving global supply chains. Situated at the heart of the Indo-Pacific, ASEAN and South Asia are increasingly important in shaping Asia’s economic and strategic future. Together, they represent more than 2.5 billion people, approximately one-third of the world’s population, and a combined economy of around US$8.5 trillion. Transforming this enormous potential into meaningful cooperation requires stronger trade linkages, improved connectivity, deeper people-to-people exchanges, and joint action on climate resilience, energy transition, and sustainable development.
Complementary Economic Strengths
ASEAN, comprising 11 member states — Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Timor-Leste, and Viet Nam — has developed into one of the world’s leading manufacturing and investment hubs. With a combined nominal GDP of approximately US$3.9 trillion, ASEAN represents one of the largest economic regions globally, supported by competitive production networks in electronics, automotive industries, machinery, food processing, logistics, digital services, and emerging clean technology sectors.
South Asia, comprising eight countries — Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka — represents a region of nearly two billion people and a combined economy of approximately US$4.6 trillion in nominal GDP terms. India has emerged as a global leader in information technology, pharmaceuticals, digital innovation, renewable energy, and advanced manufacturing, while neighbouring economies contribute important strengths in textiles, agriculture, tourism, logistics, and services.
These strengths are highly complementary. ASEAN provides mature manufacturing ecosystems, regional supply chains, and investment networks, while South Asia offers market scale, skilled human resources, technological capabilities, and growing demand for infrastructure and sustainable development solutions.
Although ASEAN–India trade reached approximately US$120 billion in 2023–2024, economic relations between ASEAN and the wider South Asian region remain below their potential. Connectivity gaps, regulatory differences, customs procedures, and non-tariff barriers continue to constrain trade. As businesses diversify supply chains and governments seek greater economic resilience, stronger regional integration could unlock new opportunities for investment, manufacturing, and sustainable growth.
Tourism and Cultural Connectivity
Economic cooperation is reinforced by centuries of cultural exchange across the Bay of Bengal. Historical trade routes, shared religious traditions, and migration have created enduring links between South Asia and Southeast Asia.
Buddhist heritage sites, including Angkor Wat in Cambodia, Bodh Gaya in India, Lumbini in Nepal, and important destinations across Thailand, Myanmar, and Sri Lanka, illustrate the region’s long-standing cultural connections. Tourism has therefore become a powerful instrument for strengthening people-to-people relations.
Before the Covid-19 pandemic, around 4–5 million Indian tourists visited ASEAN annually, with Thailand, Singapore, Malaysia, Indonesia, and Viet Nam among the most popular destinations. At the same time, increasing numbers of ASEAN travellers have visited India, Sri Lanka, Nepal, and Bhutan for pilgrimage, heritage, wellness, and nature-based tourism.
Future cooperation should focus on improved aviation connectivity, easier visa procedures, integrated Buddhist heritage circuits, joint tourism promotion, and sustainable tourism practices. Such initiatives would generate economic benefits while reinforcing cultural understanding and regional integration.
Strong Institutional Foundations
ASEAN–South Asia cooperation already rests on several well-established regional frameworks.
The ASEAN Regional Forum has promoted political dialogue and confidence-building since 1994, while the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) has served since 1997 as an important bridge linking Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand. BIMSTEC’s cooperation now extends across trade, transport, energy, disaster management, security, and sustainable development.
Economic integration advanced significantly with the ASEAN–India Framework Agreement on Comprehensive Economic Cooperation in 2003 and the subsequent ASEAN–India Free Trade Area. These agreements contributed to substantial trade growth over the past two decades. In 2022, ASEAN and India further elevated their relationship to a Comprehensive Strategic Partnership covering connectivity, maritime cooperation, digital transformation, education, science and technology, and sustainable development.
Other important frameworks include the East Asia Summit (EAS), an ASEAN-led platform for strategic dialogue and regional cooperation, and the ASEAN Outlook on the Indo-Pacific (AOIP), which promotes an open, inclusive, and cooperative regional order. Together, these frameworks support connectivity, economic cooperation, sustainable development, and ASEAN’s central role in shaping the future of the Indo-Pacific. These institutional arrangements provide a solid platform for future cooperation. The priority now is translating political commitments into practical projects with measurable outcomes.
Overcoming Remaining Challenges
Despite considerable progress, several obstacles continue to limit deeper ASEAN–South Asia integration.
Connectivity remains the most significant challenge. Limited road, rail, maritime, and aviation infrastructure increases transport costs and constrains trade. Regulatory differences, customs procedures, and non-tariff barriers continue to affect business competitiveness despite existing free trade agreements.
Supply chain integration also remains relatively weak. ASEAN possesses well-developed manufacturing networks, while South Asia offers expanding markets, technological capability, and a large labour force. Closer cooperation in manufacturing, renewable energy, digital industries, and sustainable infrastructure could create stronger regional value chains.
Financing is another constraint. Expanding infrastructure, climate resilience, and regional connectivity requires substantial investment from governments, development banks, private investors, and international partners. At the same time, growing geopolitical competition across the Indo-Pacific requires both regions to pursue inclusive cooperation while maintaining regional stability.
Addressing these challenges will determine whether ASEAN and South Asia can fully realise their shared economic and strategic potential.
Building the Next Generation of Connectivity
Connectivity will be central to the future of ASEAN–South Asia relations. Despite their geographical proximity, transport links remain underdeveloped relative to their economic potential. Expanding physical and digital connectivity will strengthen trade, investment, tourism, and regional supply chains.
One of the most significant initiatives is the India–Myanmar–Thailand Trilateral Highway, which will establish a direct land corridor between South Asia and mainland Southeast Asia. The Kaladan Multi-Modal Transit Transport Project provides another strategic route linking India’s northeastern states with Myanmar through maritime, inland waterway, and road transport. Together, these projects can significantly improve regional logistics and economic integration.
Within ASEAN and South Asia, the ASEAN Highway Network, extending over 38,000 kilometres, and the BIMSTEC Transport Connectivity Master Plan provide important frameworks for expanding multimodal transport, logistics networks, and cross-border infrastructure. Future cooperation should also prioritise digital connectivity, smart logistics, integrated border management, and digital trade platforms to enhance the efficiency and resilience of regional commerce.
Climate, Energy and Sustainable Development Partnership
Climate change presents one of the strongest incentives for deeper cooperation between ASEAN and South Asia. Both regions are highly exposed to floods, cyclones, droughts, rising sea levels, extreme heat, and ecosystem degradation. Strengthening resilience through knowledge sharing, disaster risk reduction, climate adaptation, resilient infrastructure, and early warning systems should become a major pillar of regional collaboration.
The clean energy transition offers another strategic opportunity. Governments across both regions are expanding renewable energy while improving energy security and reducing dependence on carbon-intensive development. Cooperation in solar and wind power, energy storage, green hydrogen, sustainable finance, and low-carbon technologies can accelerate regional decarbonisation while creating new investment opportunities.
ASEAN’s experience in regional energy cooperation, including the ASEAN Power Grid initiative, demonstrates the value of cross-border collaboration. Similar approaches could support broader energy integration with South Asia. At the same time, mobilising green finance from governments, development banks, private investors, and international partners will be essential to finance climate-resilient infrastructure and sustainable development.
Moving beyond traditional trade towards a partnership centred on sustainability, resilience, and clean growth will strengthen long-term regional prosperity.
Innovation, Digital Economy and Human Connectivity
The next phase of ASEAN–South Asia cooperation will increasingly depend on innovation, digital transformation, and human capital. India’s strengths in information technology, digital platforms, and innovation complement ASEAN’s rapidly expanding digital economy and technology-based industries.
Future collaboration could focus on artificial intelligence, cybersecurity, digital payments, smart cities, data governance, digital entrepreneurship, and support for small and medium-sized enterprises. Developing compatible digital standards and strengthening cross-border digital cooperation would improve business competitiveness and facilitate regional investment.
Equally important are research, education, and people-to-people exchanges. Universities, think tanks, and research institutions can expand collaboration through joint research programmes, academic partnerships, and student exchanges addressing climate change, sustainable development, public policy, and emerging technologies.
With young populations across both regions, greater investment in youth leadership, entrepreneurship, cultural exchange, and professional mobility will help build lasting regional relationships. Human connectivity remains as important as physical infrastructure in creating an integrated and resilient Indo-Pacific community.
Future Directions for ASEAN–South Asia Cooperation
ASEAN and South Asia are well positioned to build a stronger strategic partnership. Their combined economic scale, complementary strengths, and strategic location create significant opportunities for expanding trade, investment, tourism, clean energy, digital cooperation, and resilient supply chains.
Existing mechanisms, including ASEAN–India cooperation, BIMSTEC, the East Asia Summit, and the ASEAN Outlook on the Indo-Pacific, already provide a strong institutional foundation. The next phase should focus on effective implementation, practical projects, and measurable outcomes that deliver tangible benefits for governments, businesses, and communities.
A more connected ASEAN–South Asia partnership would contribute significantly to an open, stable, and sustainable Indo-Pacific. By combining ASEAN’s manufacturing capabilities and regional integration experience with South Asia’s market scale, technological innovation, and human capital, both regions can create new engines of inclusive economic growth and sustainable development.
Ultimately, the future of ASEAN–South Asia relations will not be determined solely by geography. It will also depend on the shared commitment to transform proximity into partnership, strengthen regional cooperation, and build a resilient, prosperous, and sustainable future for more than one-third of the world’s population.
