Indian travellers are among top spenders on luxury goods in Singapore. Yet, far fewer Southeast Asians travelled the other way to India

India’s ASEAN hedge is no longer just the preserve of diplomats and corporations; it is also lived by ordinary Indians. More Indian parents are packing their children off to Singapore, where campuses feel closer, safer, and less hostage to the uncertainties of US visas; Indian investors, professionals, and digital nomads are moving to ASEAN cities for jobs in tech, healthcare, and finance. Remittances from Singapore have risen steadily.

Southeast Asia has become both a strategic and a people’s hedge, a way to secure futures when traditional routes look uncertain.

Diplomats are hedging geopolitically—engaging Southeast Asia to balance China’s dominance and offset shocks from the West. Companies are hedging commercially—shifting supply chains, scouting new markets, and investing in ASEAN’s manufacturing and digital ecosystems. For Indian firms squeezed by Chinese competition and wary of Western protectionism, Southeast Asia offers both proximity and opportunity.

ASEAN reciprocates, though still largely in geopolitical rather than everyday terms.

Arguably, 2025 was the year US tariffs, severely hitting India, rewired Asia’s diplomacy and opened opportunities for India and Southeast Asia to bond better.

US President Donald Trump’s 50 per cent tariffs on most Indian exports jolted supply chains across the region. What began as a shock in smartphones quickly spilt onto semiconductors, pharmaceuticals, and finance, forcing India to look south and east for resilience.

India’s impressive November exports underscore both resilience and the ASEAN hedge. Merchandise exports hit a decade high, driven by stronger shipments to the United States and China. Yet, ASEAN remained crucial: Vietnam saw increased imports of Indian frozen shrimp and other marine products, helping India diversify beyond its traditional dependence on Western markets. “Malaysia wants to be part of India’s semiconductor story,” says Malaysian Deputy Minister Liew Chin Tong. “I believe there is great potential for India and Malaysia to collaborate, particularly in the semiconductor sector, where there are many areas for cooperation.”

Meanwhile, December has seen a cautious two-way thaw between India and China, easing visas and trade ties.

If ASEAN is the hedge, Singapore is the anchor. Over 25 years, it has invested US $175 billion in India, nearly a quarter of all FDI. In 2024–25, it became India’s largest trade and investment partner in ASEAN and the top source of FDI. What began as trade has evolved into a full-spectrum alliance, spanning politics, technology, defence, and culture. Defence ties have matured. India is actively exporting its Digital Public Infrastructure (DPI) to ASEAN members to foster financial connectivity independent of other major powers.

The State of Southeast Asia 2025 Survey suggests India’s standing in Southeast Asia as a strategic partner is beginning to improve. “India is still not in ASEAN’s top tier of partners, but its trajectory is upward. In terms of economic influence, India moved up from eighth place in 2024 to sixth, overtaking Australia, South Korea, and the UK. Politically and strategically, it rose from last place to seventh place, again ahead of Australia and the UK. The confidence in India to champion the global free trade agenda and to provide leadership to maintain the rules-based order and uphold international law has also increased in rankings. Most striking was India’s leap in strategic relevance as a dialogue partner, climbing from ninth to sixth place. The survey also shows that India is ASEAN’s third choice as a hedging partner in managing the uncertainties of the US–China rivalry, with its share of support growing from 10.5 per cent to 13.5 per cent this year. Trust in India to ‘do the right thing’ also grew modestly, although doubts linger over its capacity and political will to lead beyond its immediate neighbourhood,” noted Joanne Lin of Singapore’s ISEAS–Yusof Ishak Institute in an October 2025 essay. 

But Lin also pointed out that improved perception is not enough. “The economic relationship remains the paradox of ASEAN–India ties, an area with the greatest promise but also the greatest frustration. ASEAN is already India’s fourth-largest trading partner, with trade exceeding US $106 billion in 2024, but the relationship is constrained by structural barriers that continue to erode trust on India’s part and momentum.”

One glaring feature is the stark people-to-people asymmetry amid the geopolitical talk. Nearly six million Indians flew into ASEAN in 2024—beaches in Bali, malls in Singapore, Hanoi’s Old Quarter and street food stalls, and night markets in Bangkok. Ho Chi Minh City’s Bùi Viện Walking Street pulses with backpackers and numerous restaurants catering to Indian tourists and expats. Social media brims with euphoric posts from Indians about Southeast Asia’s affordability and appeal.

Indian travellers are among the top spenders on luxury goods in Singapore. Yet far fewer Southeast Asians travelled the other way to India.

On paper, India’s standing in Southeast Asia looks stronger than ever: survey rankings are climbing, diplomacy is more visible, Singapore’s investments are deepening, and ASEAN leaders are engaging. Yet the stubborn realities remain—trade deficits that refuse to shrink, a sluggish AITIGA (ASEAN–India Trade in Goods Agreement) review, India’s absence from RCEP (Regional Comprehensive Economic Partnership) and a private sector footprint that is still too thin. 

The deeper issue, rarely acknowledged, is India’s own domestic delivery deficit—the gap between ambition and execution at home—which undermines its ability to convert ASEAN goodwill into something more substantial.

ASEAN’s internal contradictions demand it set its house in order, while India must become more attractive. Each is the other’s strategic hedge in a turbulent world.

Patralekha Chatterjee is a writer and columnist who spends her time in South and Southeast Asia, and looks at modern-day connects between the two adjacent regions. X: @Patralekha2011