Gurjit Singh | How S. India Can Lead Delhi’s Act East Policy

From New Delhi, the Act East Policy is seen primarily as a strategic, economic, and socio-cultural initiative towards Southeast Asia and beyond. However, from the economic centres of South India, it can also be viewed as a major opportunity for deeper economic and socio-cultural engagement. South India's geographical location, industrial base, ports, airports, technology clusters and historical links with Southeast Asia give it a unique opportunity to become a major partner for India in engaging Asean.

The issue today is not how South India can export more to Asean. It is how to build dependable, resilient supply chains and integrate South Indian industrial clusters into Asean production networks. Taken together, Tamil Nadu, Andhra Pradesh, Telangana, Karnataka and Kerala are among India’s leading manufacturing, technology and services hubs. In 2025, Karnataka and Tamil Nadu alone accounted for nearly $94 billion in exports, while the five southern states together exported around $130 billion globally. Yet this enormous economic potential remains insufficiently integrated with the Act East Policy .

An opportunity could emerge from the eventual review of the Asean-India Trade in Goods Agreement (AITIGA). Along with agreements on investment and services, the review should go beyond tariff reduction. Its larger objective should be to facilitate India-Asean production networks, including those linking South Indian industrial clusters with Asean. This would require simpler rules of origin, reduction of non-tariff barriers, improved trade facilitation and more effective mechanisms for addressing standards, and phytosanitary requirements.

If these barriers are reduced, South Indian companies and their Asean counterparts could move components, intermediate goods, and raw materials more efficiently across borders. This would open new possibilities for South Indian industrial and technology clusters.

Tamil Nadu already possesses strong clusters in automobiles, electronics, semiconductors, engineering, textiles and aerospace. Chennai and Coimbatore could benefit substantially from deeper integration with counterpart production centres in Vietnam, Thailand and Malaysia. A Tamil Nadu company, for instance, need not limit itself to exporting complete automobiles. It could supply sensors, electronics, castings and other components to regional assembly chains, while importing specialised components from Asean partners that may have developed complementary capabilities further up the supply chain.

Karnataka offers a different but equally important model. Bengaluru's strengths in software, artificial intelligence, semiconductor design, aerospace, biotechnology and deep technology are increasingly connected with Singapore's technology ecosystem and the manufacturing capacities of Malaysia, Vietnam and Thailand. An emerging model could involve design and R&D in Bengaluru, manufacturing in Asean, and joint marketing and distribution across regional markets.

The foreign direct investment dimension is significant. Between October 2019 and December 2022, Karnataka was the largest recipient of FDI originating from Asean, receiving nearly $17 billion, or 31% of Asean FDI. Singapore remains the principal partner in this relationship. Between 1996 and 2023, 93% of Indian investment in Asean went to Singapore. The opportunity now is to move beyond a Singapore-focused investment partnership towards a Singapore-enabled engagement with the wider Asean economic space.

Companies from South Indian states could use Singapore not only as an investment and financial hub, but also as a gateway to the wider Asean market. Bengaluru, Chennai, Hyderabad, Kochi and Visakhapatnam need to broaden their economic outlook beyond Singapore to encompass Vietnam, Thailand, Malaysia, Indonesia and the Philippines, with which India's economic engagement is steadily expanding.

The opportunities for individual states are increasingly tangible. Andhra Pradesh's strengths in marine products, agriculture, food processing and pharmaceuticals provide scope to move from commodity exports towards greater value addition. Its marine-product industries, for instance, could develop joint production arrangements with Asean processing, packaging and distribution centres. Hyderabad could develop pharmaceutical value chains encompassing vaccines, medical devices and biotechnology, linking its R&D capabilities with Asean regulatory and distribution networks.

Kerala's opportunities are equally distinctive. Its strengths in marine products, spices, processed food, healthcare, tourism, logistics and marine services can connect with markets such as Malaysia and Singapore and extend further into Indonesia and Thailand. Its longstanding commercial and diaspora links with Southeast Asia, like those of Tamil Nadu, provide advantages.

Connectivity will be central to strengthening the South India-Asean relationship. Direct air links between Asean airports and Chennai, Bengaluru, Hyderabad, Kochi, Tiruchirappalli and Thiruvananthapuram have expanded. Bengaluru is well connected to Singapore, Kuala Lumpur, and Bangkok, while Chennai has strong connectivity to Kuala Lumpur. The next step should be to view these connections not merely as passenger routes, but as economic corridors supporting business travel, tourism, services, investment and increasingly integrated regional supply chains.

There are nearly 100 weekly non-stop flights from these three Asean hubs to the four major South Indian airports. The challenge is that connectivity remains concentrated around these hubs. More direct links with important and emerging Asean production centres in Indonesia, Vietnam and the Philippines could significantly expand the network. Direct flights are already available from Delhi and Mumbai, but similar connections need to reach more South Indian centres. As the Act East Policy expands, airlines and airports should look beyond Singapore, Kuala Lumpur and Bangkok to develop direct connections with Jakarta, Ho Chi Minh City, Hanoi and Manila.

Maritime connectivity is equally important. The proposed Great Nicobar International Container Transshipment Terminal at Galathea Bay, with its planned large capacity, could provide India with a gateway on its eastern maritime frontier, close to major east-west shipping routes. South Indian ports such as Chennai and Visakhapatnam, along with other ports on the eastern coast, could become feeder ports for the Great Nicobar project and connect with wider Asean shipping networks. Such maritime connectivity could significantly enhance trade and commerce between South India and Asean.

The objective should not be for Nicobar to replace Singapore or Port Klang. Rather, the Great Nicobar project could enable India to capture a greater share of the maritime value generated by its growing trade with Asean, which is now more than $130 billion annually. It could become the eastern counterpart to Vizhinjam on India's western coast, creating a more balanced maritime opportunity.

South Indian states, particularly Tamil Nadu, Andhra Pradesh and Telangana, also possess deep civilisational connections with Southeast Asia. The Chola maritime expeditions across the region contributed to centuries of Tamil engagement with Southeast Asia, while Hindu and Buddhist cultural influences created enduring links. These connections provide an important basis for expanding tourism and cultural exchanges, which remain below their potential between India and Asean countries.

The Buddhist circuit has traditionally been associated with Bihar and northern India. However, the Buddhist heritage of Andhra Pradesh, including Amaravati and Nagarjunakonda, and the cultural heritage of Tamil Nadu, including Kanchipuram, Tiruchirappalli and Thanjavur, could form part of wider Buddhist and civilizational tourism circuits. Such circuits could attract visitors from Thailand, Vietnam, Myanmar, Malaysia and Indonesia. The historical links between the Pallava and Chola kingdoms and the Khmer and Champa civilisations are reflected in temples and other heritage sites across Southeast Asia. Reciprocal engagement with the corresponding heritage sites of South India could add a new dimension to India-Asean cultural diplomacy and tourism.

The Act East Policy has already generated functional mechanisms, strategic partnerships and expanded connectivity with Asean. The next transition should be to connect these institutional and strategic gains more directly with India's robust production centres. Since many of these are located in South India, the region could become a major part of this transition, combining manufacturing, technology, services, ports, airports and an increasingly outward-looking entrepreneurial class.

The objective would be to create an integrated framework in which AITIGA provides the rules, South India provides production capabilities, Singapore provides finance and regional headquarters, the Great Nicobar project provides maritime connectivity, and Asean countries provide wider production networks and consumer markets alongside the Indian market. This could significantly alter how the Act East Policy has been viewed so far.

Asean need not be seen merely as a market for Indian exports. South Indian companies should seek an extended economic geography with Asean countries, in which supply chains can be developed to serve consumers in both markets. Technology developed in Bengaluru could be integrated with manufacturing in Vietnam, financed through Singapore and distributed across India and Asean. Similar models could apply to pharmaceuticals, automotive components, marine and agricultural products, startups, technology and the digital economy, where Bengaluru and Hyderabad have emerged as important centres and are attracting growing Asean interest.

Recent developments illustrate the potential. Since mid-August, IndiGo has shifted its Visakhapatnam operations to the new Alluri Sitarama Raju International Airport, with Singapore among the first international destinations served from the airport. This could strengthen Andhra Pradesh's integration with Asean markets and manufacturing centres.

Singapore has also opened its fourth Singapore Enterprise Centre in Bengaluru, primarily to help Singaporean SMEs enter the Indian market and facilitate business matching. These initiatives indicate that the building blocks of a deeper relationship are already visible. They now need to be connected and developed so that an integrated India-Asean regional value chain can emerge.

The Act East Policy would then no longer be simply about building India's strategic and economic orientation towards the East. It would become a policy for building eastward connectivity together, linking South India's production and technology capabilities with Asean’s markets, supply chains, capital and maritime networks.

Gurjit Singh is the former Indian Ambassador to Indonesia and Asean and the author of The Durian Flavour