India and ASEAN Member Countries Set to Strengthen Economic Ties in 2016
India and ASEAN member countries are leaving no stone unturned to strengthen economic ties in 2016. The beginning of 2016 has witnessed several political, economic, business and military policies from the Indian government and various ASEAN member states’ governments to solidify the relationship between the two.
The Indian government has continued to act in line with its ‘Act East’ policy to deepen ties with ASEAN. Vice President Hamid Ansari will make trips to Brunei and Thailand in early February to develop India’s ties with the two nations. Meanwhile, the Indian government has signed a Memorandum of Understanding (MoU) with Singapore’s government for the Indian civil aviation sector, and has plans to conduct a joint military exercise with several ASEAN nations in March. The recent policies reflect the changing regional dynamic and deepening of the economic relationship between India and ASEAN.
Vice President’s Visit to ASEAN countries
Vice President Ansari will undertake a five-day trip to Thailand and Brunei in early February. Ansari will visit Brunei from February 1 to February 3. This is the highest-level bilateral trip by an Indian government official to the country. The Indian Vice President will meet several officials in Brunei, including the Crown Prince Haji Al-Muhtadee Billah. Issues ranging from civil aviation to energy are set to be discussed, and the two governments may also sign MoUs in the health and defense sector.
Ansari will visit Thailand from February 3-5. He will meet Princess Maha Chakri Sirindhorn and Prime Minister Prayut Chan-o-cha in Bangkok, and is set to deliver a talk at the Chulalongkorn University in Bangkok that will address India’s Partnership with Thailand and ASEAN. The Indian Ministry of External Affairs said that the visit would further strengthen economic ties between India and Thailand in the coming years. The two countries already cooperate in sectors such as security, defense, education and many others.
India signs MoU for Civil Aviation with Singapore
At the beginning of January 2016, the Indian government approved an MoU between India and Singapore for greater cooperation in civil aviation. The MoU will cover the airports of Jaipur (Rajasthan state) and Ahmedabad (Gujarat state) in India. Singapore will assist with operations and maintenance of these airports’ contracts. Areas of cooperation will include traffic developments, cargo and repairs. The Airport Authority of India (AAI) will continue to handle other functions at the airports.
The MoU is a watershed development that is reflective of the greater degree of economic cooperation between India and Singapore. It will ensure that India is able to benefit from the technical expertise that Singapore possesses in the civil aviation sector.
India’s Forthcoming Joint Military Exercise with ASEAN
As a part of its ‘Look East’ policy, India will conduct a joint military exercise from March 2-8 with ASEAN member countries. The exercise will highlight India’s commitment to strengthen its strategic cooperation with ASEAN, and is indicative of the two’s intent to ensure regional security, thereby building a stable economic environment for greater participation.
The latest ASEAN Business Optimism Index by Dun & Bradstreet is a good indicator to analyze the economic relationship between India and ASEAN. For instance, the Indian visit to Thailand in February 2016 is reflective of growing business optimism in Thailand. Almost all business confidence parameters in Thailand increased in the latest index when compared to the last. The booming economic environment in the country has made other Asian countries take notice of the opportunities that Thai markets present. This underlined the possible motive for the upcoming Indian visit, which will seek to capitalize on the business opportunities that Thailand presents.
Meanwhile, India’s MoU with Singapore also bodes well for foreign investors. The latest ASEAN Business Optimism Index marked a decline for a number of business confidence parameters in Singapore. However, the MoU highlights that bilateral agreements will ensure that countries are able to strengthen economic ties despite periods of business pessimism. In addition, the upcoming joint military exercise reflects the commitment that India and ASEAN countries have to build a sustainable and stable future for the region.
The Business Optimism Index, released every quarter by Dun & Bradstreet, is considered a leading economic indicator for turning points in business activity and measuring business sentiment. The Index captures business expectations for the quarter ahead based on six parameters: sales volume, net profit, selling price, new orders, inventory, and employment. Sampling in the Index represents key business sectors including manufacturing, construction, wholesale, transportation, services, finance, mining and agriculture, according to their GDP contribution in each nation.
The ASEAN Business Optimism Index for Q1 2016 is out now and available as a complimentary download in the Asia Briefing Bookstore.
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