Part II of this series situates ASEAN within an increasingly fragmented global environment in which engagement with major external partners is becoming more conditional, differentiated, and strategically consequential. The era of largely frictionless integration is giving way to one defined by tariffs, regulatory standards, supply-chain recalibration, and selective security expectations. As global powers recalibrate their external strategies in response to domestic pressures and geopolitical competition, Southeast Asia has emerged not as a passive arena but as a focal point where economic access, strategic influence, and policy alignment intersect. The following sections examine how key partners—the United States, China, Japan, the European Union, South Korea, India, the GCC, and partners in the ‘Global South’—are reshaping their engagement with ASEAN in 2026, and what this evolving external landscape means for the region’s capacity to sustain agency under constraint.

The full Southeast Asia Global Relations Outlook 2026 report will be published on the website soon.

India: Strategic Expansion – breadth without depth 

Strategic Partnership with Bounded Economic Ambition 

India’s engagement with ASEAN in 2026 will be framed by the ASEAN–India Comprehensive Strategic Partnership and its new Plan of Action (2026–2030), which prioritizes connectivity, digital cooperation, and people-to-people ties. These initiatives reflect India’s desire to expand its regional footprint and deepen functional cooperation without committing to far-reaching trade liberalization. While digital public infrastructure, fintech cooperation, and connectivity corridors feature prominently, market access and tariff reduction remain secondary, consistent with India’s cautious and protectionist trade posture. 

This restraint is deliberate. India’s domestic political economy remains sensitive to import competition and trade deficits, limiting appetite for deeper economic integration with ASEAN. As a result, India’s economic engagement is incremental and selective, focused on cooperation frameworks rather than binding trade commitments. For ASEAN, this means India offers engagement breadth but not depth: opportunities for collaboration in specific sectors and initiatives, but no near-term shift toward India as a major trade or investment anchor. 

Maritime Cooperation and Strategic Implications for ASEAN 

Where India’s role is more pronounced is in the maritime and security domain. India’s expanding naval presence in the Indian Ocean and its emphasis on freedom of navigation align with the concerns of several ASEAN states, particularly those uneasy about China’s maritime behavior. Cooperation has focused on naval exercises, capacity-building, information sharing, and defense dialogue—activities that enhance strategic signaling without formal alliances or basing arrangements. 

For ASEAN, India thus functions primarily as a strategic hedge rather than an economic counterweight. Its engagement broadens ASEAN’s security partnerships and reinforces a multipolar regional order, but it does not fundamentally reshape economic dependencies or supply-chain structures. In 2026, India’s value to ASEAN lies in providing additional strategic depth and optionality, not in replacing China, the EU, Japan, or South Korea as pillars of economic engagement. This makes India a useful—but limited—partner in ASEAN’s broader balancing strategy. 

BRICS: Diversification or Re-Alignment? 

Expanding Diplomatic and Financial Optionality 

Following Indonesia’s accession to the BRICS group in 2025—alongside Saudi Arabia, Iran, the United Arab Emirates, and Egypt—Malaysia and Thailand’s active exploration of closer engagement with BRICS reflects a broader ASEAN response to global fragmentation rather than a decisive geopolitical shift. Interest in BRICS membership or partnership is driven by pragmatic considerations: expanding diplomatic space, signaling autonomy in foreign policy, and accessing alternative sources of finance at a time when engagement with traditional partners is increasingly conditioned by tariffs, regulation, or geopolitical alignment. For middle-income ASEAN economies, BRICS engagement offers symbolic leverage and optionality rather than a wholesale reorientation. 

Potential benefits are concentrated in financial and political signaling rather than trade integration. Access to institutions such as the New Development Bank, the possibility of local-currency financing, and participation in Global South–led forums provide ASEAN states with additional tools to hedge against external pressure. In this sense, BRICS engagement complements rather than replaces ties with the United States, the EU, Japan, or China. It allows ASEAN governments to demonstrate diplomatic flexibility and resist binary framing in an increasingly polarized global environment. 

Strategic Interpretation, Risks, and Limits 

At the strategic level, ASEAN engagement with BRICS is best understood as diversification, not re-alignment. ASEAN states are not seeking ideological alignment with an alternative bloc, nor are they abandoning existing partnerships. Instead, BRICS functions as a supplementary platform that reinforces ASEAN’s long-standing preference for multi-vector foreign policy and strategic autonomy. This logic mirrors ASEAN’s broader approach to major power competition: widening options to reduce vulnerability rather than shifting allegiance. 

However, the limits of BRICS are significant. The grouping remains institutionally weak, internally fragmented, and economically heterogeneous, constraining its ability to deliver coordinated outcomes or large-scale economic transformation. Trade flows within BRICS remain modest relative to ASEAN’s engagement with traditional partners, and financial mechanisms are unlikely to substitute meaningfully for established sources of capital. For ASEAN, the risk lies less in over-commitment than in over-expectation. In 2026, BRICS engagement is likely to yield political signaling and incremental financial benefits, but its impact will remain symbolic rather than transformative unless institutional capacity and cohesion deepen substantially. 

Gulf Cooperation Council: Capital, Energy, and Implementation Phase 

From Summit Diplomacy to Execution 

Engagement between ASEAN and the Gulf Cooperation Council (GCC) will enter a more operational phase in 2026, following the political signaling achieved at the 2025 ASEAN–GCC Summit. The emphasis is shifting from dialogue and intent toward execution, with cooperation increasingly framed around concrete projects rather than broad strategic declarations. Priority areas include energy security, infrastructure finance, and digital connectivity—sectors where Gulf states possess capital, project experience, and strategic motivation to deploy resources abroad. 

This shift reflects complementary interests. For GCC economies, overseas investment supports diversification away from hydrocarbons, monetization of sovereign wealth, and the internationalization of national champions. For ASEAN, Gulf engagement offers access to capital at a time when financing conditions are tightening globally and regulatory or geopolitical constraints complicate engagement with other major partners. Unlike the EU’s regulatory-heavy approach or U.S. conditionality, GCC engagement is pragmatic and commercially oriented, centered on project viability and speed of execution rather than policy alignment. 

Capital Flows and Strategic Implications for ASEAN 

Sovereign wealth funds from Saudi Arabia and the United Arab Emirates are expected to play a central role in this next phase, with expanded investments in energy transition infrastructure, logistics hubs, data centers, and digital platforms across Southeast Asia. These investments align with ASEAN’s infrastructure and digitalization needs, while offering Gulf investors exposure to high-growth markets and long-term returns. The scale and velocity of GCC capital deployment distinguish it from other external partners, particularly in capital-intensive sectors where rapid financing decisions are critical. 

For ASEAN, GCC engagement presents clear opportunities alongside structural risks. The availability of large-scale capital with limited regulatory conditionality enhances policy flexibility and accelerates project delivery. However, reliance on sovereign wealth financing also raises questions around governance standards, transparency, and long-term debt sustainability, particularly for infrastructure projects with public-sector involvement. In 2026, the strategic challenge for ASEAN is not access to Gulf capital, but the capacity to channel it effectively—ensuring that speed and scale do not come at the expense of accountability, fiscal resilience, or long-term development objectives.