India Declines ASEAN Joint Stand on US Tariffs

Context

India has expressed disinterest in collaborating with ASEAN nations to develop a unified approach regarding the reciprocal tariffs imposed by US President Donald Trump. This decision reflects India’s strategic priorities in the global trade landscape, particularly its focus on bilateral agreements and regional diversification.

Background of Trump’s Tariffs

In April 2025, sweeping tariffs were announced by the Trump administration targeting world exporters – baseline 10% of all countries and higher “reciprocal tariffs” for more than 60 nations that have been accused of unfair trade practices. Southeast Asian countries, particularly those in ASEAN, were heavily affected, with taxes spanning between 17% in the Philippines and 49% in Cambodia.

India’s Strategic Approach

• India focuses on Bilateral Trade Agreements: India is working on BTAs with big economies, particularly the US. The government regards future ASEAN nations as competitors in trade rather than partners. External Affairs Minister S. Jaishankar has been talking with US Secretary of States, Marco Rubio, about moving rapidly towards a BTA because of the need to conclude it quickly.
• Diversification of trade Partnerships: In addition to the USA, India is also pursuing FTAs with its already developed partners, such as the EU, UK, Australia, and New Zealand. Apart from this, India endeavors to open new markets for agreements with Latin American and West Asian countries. In this way, India intends to lessen the importance of a single market and make its exports more competitive.
• Competitive Advantage: In contrast to most ASEAN countries, the reciprocal tariffs India imposes are also quite less at 26%. This gives India a competitive advantage in textiles, electronics, and more, enabling it to make gains from trade disruptions affecting rivals.

ASEAN’s Response to Trump Tariffs

• Collective Action: The ASEAN nations have decided to take a non-retaliatory stance while negotiating with the US to lower tariffs. Vietnam and Thailand have been quite active in their overtures to Washington, while Malaysia, the current Chair of ASEAN, is coordinating the regional response to ensure solidarity. 
• Diversification and Regional Integration: It is argued that ASEAN should seek some diversification in their trade and regional integration strategies to mitigate the costs of the US tariffs. This entails making full use of its existing FTAs and promoting trade intra-regionally in order to lessen dependence on the US market. 

Implications for India and ASEAN

• Making a case for India: The fact that India has chosen to pursue bilateralism over the collective regional response of ASEAN opens up strategic opportunities: India could, in the formal negotiations with the US and other economies, put favorable economic terms on the table. Besides, the ongoing strains between the US and China provide for a unique leverage for India in deepening economic ties with the US. 
• Favorable Conditions for ASEAN: ASEAN’s dependence on the US market and export-based economies are especially vulnerable to American tariffs. In the absence of a collective retaliatory response, the ASEAN countries may be pitted against each other, in essence offering promo competition for favorable US terms. Such friction can only disintegrate regional integrity.

Conclusion

India’s decision not to join ASEAN’s efforts to address Trump’s tariffs reflects its strategic focus on bilateral trade agreements and regional diversification. While ASEAN seeks to present a united front through negotiations and trade diversification, India’s approach highlights the complexities of regional trade dynamics in the face of global economic uncertainties.

Source: thediplomat

UPSC Mains Practice Question

Q. Act East Policy’ is playing a crucial role in India’s trade and economic relations with the ASEAN region.” Discuss with examples.

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