Southeast Asia's Drone Race: China's Defense Diplomacy and India's Act East Policy Shape Regional Security

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Key Takeaways

Southeast Asia’s drone proliferation is neither random nor inevitable—it reflects rational responses to localized security threats channeled through China’s sophisticated defense diplomacy. Thailand’s Wing Loong II evaluation, Malaysia’s ANKA-S procurement, and the broader 15% CAGR market growth showcase a region rapidly militarizing its skies. For India, this moment crystallizes a strategic inflection point:

India can either double down on Act East through tangible defense industrial partnerships, infrastructure connectivity, and diplomatic engagement—or risk strategic marginalization as China cements operational dependencies throughout Southeast Asia.

Executive Overview

Southeast Asia’s unmanned aerial vehicle (UAV) market stands at a critical inflection point. Valued at $43.15 million in 2025 and projected to reach $59 million by 2030 at a 15% compound annual growth rate, the region’s drone landscape reflects far more than technological adoption—it represents a geopolitical competition, defense industrial evolution, and a test of India’s strategic positioning in the Indo-Pacific. While China consolidates its defense diplomacy through affordable, combat-proven systems like the Wing Loong II, and Turkey expands its footprint via platforms like the ANKA-S, Southeast Asian nations pursue asymmetric drone capabilities to address mounting security challenges. For India, this moment crystallizes the imperatives of its Act East Policy: either establish itself as a credible defense partner for ASEAN or risk strategic marginalization as China cements operational dependencies through defense procurement linkages. statistica

The Drone Revolution in Southeast Asia: From Experimentation to Strategic Asset

The Regional Context

Southeast Asia’s embrace of drone technology represents a paradigm shift in regional security architecture. The DronTech Asia 2025 conference (September 30–October 2, Kuala Lumpur) brought together 75 companies from 10 countries, showcasing that the region has moved decisively beyond experimental applications toward operationalized military and civil capabilities. Malaysia’s Deputy Minister for Investment emphasized the urgency: “Drone technology is advancing at a pace we have never seen before. To remain relevant, Malaysia and ASEAN must build capabilities to innovate, integrate drones across security, agriculture, and healthcare.” aamnation

The market reflects this trajectory. The ASEAN drone market’s 15% CAGR between 2020–2025 outpaces global average growth, indicating accelerated procurement cycles and rising defense budgets across the region. This growth masks profound unevenness: while Singapore operates at Tier 2 (Advanced UTM) with centralized airspace management, Malaysia at Tier 3 (Developed), Indonesia, Thailand, and Philippines remain at Tier 4-5 (Emerging-Nascent) stages—reflecting disparate security threats, geopolitical alignments, and fiscal constraints.

Strategic Drivers of “Sporadic” Adoption

The region’s drone proliferation appears uncoordinated—hence the term “sporadic”—but closer examination reveals rational security responses to distinct threat perceptions:

Maritime Domain Awareness: South China Sea territorial disputes (Philippines, Vietnam, Malaysia) and illegal fishing (Thailand, Myanmar borders)
Counter-Terrorism: Radicalization in Indonesia/Philippines (ISIS-linked movements), narcotics trafficking across Thailand-Myanmar-Malaysia
Border Surveillance: Myanmar political instability, Indonesia-Malaysia boundary disputes, Cambodia demarcation challenges
Critical Infrastructure Protection: Government facilities (Myanmar, Cambodia), airports (Singapore, Thailand), strategic installations

This fragmentation of drivers explains why Thailand evaluates the Wing Loong II while Malaysia negotiates Turkish ANKA-S deliveries—each responds to unique threat matrices rather than coordinated ASEAN strategy.

Mapping the Drone Landscape: Country-Specific Developments

Thailand: The Wing Loong II Strategic Pivot

Thailand’s potential acquisition of China’s Wing Loong II (GJ-2) Medium-Altitude Long-Endurance (MALE) drone marks the most significant defense procurement signal in Southeast Asia’s drone domain since 2020. defensesecurityasia

Procurement Trajectory:

Royal Thai Air Force delegation visited Chengdu Aircraft Industry Group production facility (late 2024/early 2025)
Evaluation phase for 20-hour loiter time, satellite command-and-control capability, and precision-strike munitions integration
Fiscal 2026 procurement targeted per Thailand’s 2024-2033 defense white paper
If finalized, 12-18 month delivery timeline to operational deployment

Strategic Imperatives:
Thailand faces a triple security challenge: (1) southern insurgency spanning decades (PULO, BRN-C militancy), (2) expanding illegal fishing and maritime infiltration along Myanmar/Cambodia borders, and (3) growing asymmetric terrorism threats from radicalized elements. The Wing Loong II’s 20-hour endurance and persistent ISR capability addresses all three simultaneously. Operationally, integration with Thailand’s network-centric warfare initiative and digital battlefield program would enable real-time target coordination across military commands, coast guard, and joint task forces.

Geopolitical Implications:
Bangkok’s move deepens its defense integration with Beijing, following the 2014 coup when U.S. relations strained and China became Thailand’s primary defense supplier. Thailand would join Pakistan, UAE, and Saudi Arabia as operators of Chinese MALE drones—a Club of Convenience built on cost efficiency rather than strategic alliance. Critically, Bangkok’s potential procurement signals to regional peers (Malaysia, Indonesia, Vietnam) the need for technological parity, likely accelerating competitive acquisitions across ASEAN. Conversely, integrating Chinese command-and-control systems could complicate future interoperability with Western platforms (Gripen C/D fighters, F-16s), a concern the U.S. has explicitly flagged with other Chinese-drone operators.

Domestic Hurdles:
Procurement approval faces budgetary scrutiny amid competing modernization priorities. Integration challenges include satellite bandwidth allocation, establishing secure communication networks, and personnel training pipelines. Thailand’s experience with Chinese ground systems suggests maintenance partnerships can be managed efficiently, yet long-term logistics dependencies could emerge.

Malaysia: Turkish-Backed Maritime Sovereignty

Malaysia’s ANKA-S procurement from Turkish Aerospace Industries (TAI) represents a calculated hedge—asserting maritime rights without alienating Beijing, while diversifying beyond U.S./Israeli suppliers.

Operational Readiness:

Three ANKA-S drones delivery targeted for February/March 2026 (from orders finalized at LIMA 2023)
24-30 hour endurance, encrypted satellite communications, synthetic aperture radar, EO/IR cameras
Deployment at RMAF Labuan Air Base for persistent South China Sea surveillance
Payload capacity: up to 4 MAM Smart Micro Munitions for precision strikes
Royal Malaysian Air Force personnel undergoing operational training in Turkey

Strategic Rationale:
Malaysia’s maritime domain faces unprecedented pressure. Chinese Coast Guard vessels and maritime militia probe Malaysian oil/gas operations near Luconia Shoals and Vanguard Bank, while illegal fishing and drug trafficking exploit surveillance gaps. Malaysia’s selection of Turkish drones over U.S. (General Atomics MQ-9 Reaper) and Chinese (Wing Loong II) alternatives in a transparent international tender reflects strategic autonomy: cost-effectiveness ($60-80M per platform vs. $100M+ for Reapers), non-politicized procurement, and post-sale flexibility.

Regulatory Ecosystem:
Malaysia’s Malaysian Drone Technology Action Plan 2022-2030 (MDTAP30) establishes the regulatory foundation for UAV expansion. The plan emphasizes Unmanned Traffic Management (UTM) systems, registration databases, and strategic industry applications. Malaysia’s UAV market alone was valued at $129.41 million in 2024, projected to grow to $315.54 million by 2033—the fastest-growing segment in ASEAN, driven by agriculture precision farming, construction monitoring, and smart city integration.

Regional Multiplier Effect:
Malaysia’s ANKA-S deployment, combined with its ASEAN 2025 chairmanship, positions Kuala Lumpur as a regional innovation hub. The DronTech Asia 2025 conference hosted in Malaysia underscores this leadership role, attracting global innovators and demonstrating commitment to establishing regional standards for UTM interoperability, airspace management, and counter-drone architectures.

Singapore: Advanced UTM and Technological Leadership

Singapore’s drone ecosystem operates at an entirely different maturity level. As Tier 2-Advanced UTM, the city-state has deployed a Centralized Flight Management System (CFMS) integrated with eSOMS and “FlySafe” app, providing real-time airspace management, geofencing, and dynamic rerouting capabilities.

Infrastructure:

Counter-drone systems protecting Changi Airport and critical government facilities
5G and IoT infrastructure enabling ultra-low latency communication for autonomous drone operations
Singapore’s UTM market alone valued at $1.2 billion in 2024, projected to reach $5.3 billion by 2033—a 18.5% CAGR
Leadership in remote identification, conformance monitoring, and strategic conflict detection/deconfliction

Strategic Implications:
Singapore’s technological prowess reflects its role as a financial hub and smart city pioneer. However, the city-state’s maritime dependencies (chokepoint control, critical shipping routes) position drone-based domain awareness as existential infrastructure. Singapore’s UTM framework increasingly serves as a regional reference model, with Indonesian authorities and Thai planners studying CAAS (Civil Aviation Authority Singapore) protocols for their own implementations.

Indonesia, Philippines, Vietnam: Balancing Sovereignty with Capacity

Maritime Southeast Asia faces an acute asymmetry: These nations possess massive Exclusive Economic Zones (EEZs) generating enormous resource wealth but lack persistent surveillance capability to enforce sovereignty. Drones offer an affordable ISR multiplier.

Indonesia: October 2025 hosted UTM demonstrations in Jakarta suburbs involving Unifly and Terra Drone, showcasing multi-drone operations for agriculture, inter-island logistics, and emergency response. Indonesia represents the second-largest potential drone market in ASEAN, yet regulatory fragmentation and infrastructure deficits limit adoption. The government’s 2022-2030 drone roadmap prioritizes UTM framework development, but implementation lags behind Malaysia and Thailand.

Philippines: Following recovered Chinese underwater drones in Philippine waters (October 2025), Manila accelerated drone procurement strategy. Defense Assistant Secretary August V. Gaite stated drones are “valuable tools” for sovereignty assertion, with plans for widespread UAV adoption across the armed forces. Joint training with U.S. forces on anti-ship drone systems (NMESIS) and sea drones signals asymmetric deterrence strategy. Ukraine’s recent outreach (September 2025) offering drone production partnerships and expertise in maritime drone warfare (gleaned from Black Sea operations) represents an emerging alternative to Chinese/Western suppliers.

Vietnam: Border disputes with Cambodia and China make persistent ISR a strategic imperative. Vietnam’s Tier 4-5 capability reflects budget constraints rather than lack of demand. Recent joint naval exercises with U.S., Japan, Canada, and France (October 13-17, 2025) in the South China Sea demonstrate quad-lateral counter-China coordination, yet Vietnamese air force lacks indigenous MALE UAV capability. This creates a critical gap that cheaper Chinese drones fill by default.

Drone Applications Driving ASEAN Adoption

Military and Strategic Uses

Intelligence, Surveillance, Reconnaissance (ISR): Long-endurance monitoring of vast maritime territories (South China Sea spanning 1.3 million square miles, Malacca Strait handling 25% of global maritime trade) enables real-time target tracking and strike coordination across naval, air, and ground domains. The critical advantage: persistent presence without human attrition.

Combat and Precision Strike: Ukraine’s precedent—where small drone units achieved outsized strategic effects against superior Russian naval forces—has resonated across ASEAN planners. The Wing Loong II’s guided munitions capability and ANKA-S’s precision strike radius lower the threshold for kinetic response, potentially escalating low-intensity conflicts into rapid asymmetric confrontations.

Maritime Domain Awareness: Illegal fishing alone costs Southeast Asia $2-5 billion annually. Persistent drone surveillance enables interception, prosecution, and asset recovery, transforming economic security into military capability. Integration with naval command centers and coast guard operations creates actionable intelligence loops.

Civil and Commercial Applications

Smart City Development: Singapore’s Changi Airport, Malaysian urban centers, and Indonesian megacities leverage drones for traffic monitoring, pollution surveillance, medical deliveries, and emergency response. This dual-use infrastructure—developed for civilian purposes—can rapidly be militarized during conflict or crisis.

Economic Sectors: Agricultural drones (Malaysia’s $129M market segment) enable precision farming for palm, rice, rubber plantations. Construction monitoring expedites infrastructure projects critical to ASEAN connectivity (Trilateral Highway, Kaladan Multi-Modal Transit Project). Oil/gas inspection drones protect critical energy infrastructure vulnerable to terrorism and maritime accidents.

Public Safety and Border Management: Counter-terrorism applications in Indonesia (addressing ISIS-linked cells in Marawi aftermath), Thailand (southern insurgency monitoring), and Malaysia (narcotics interdiction) represent the highest-confidence use cases for drone deployment outside maritime domains.

The Geopolitical Calculus: China’s Defense Diplomacy

China’s Arms Export Strategy and Operational Dependency

China’s global arms exports reached $6.1 billion in 2024—the highest in decades—with Southeast Asia absorbing 25-30% of total volume. This reflects Beijing’s strategic pivot: using affordable, combat-proven systems to displace U.S./Western suppliers while creating operational interdependencies.

Wing Loong II Economics:
The aircraft costs approximately $50-70 million per unit (complete with support infrastructure), roughly 30-40% cheaper than Israeli Heron variants or American MQ-9 systems. More critically, purchasers become locked into Chinese logistics networks: spare parts availability, training pipeline dependencies, and satellite communication protocols create long-term supplier lock-in. This is not coincidental—it’s deliberate strategic design.

Diplomatic Signaling:
Arms sales serve as calibrated diplomatic messages. China’s decision to prioritize Thailand, Laos, and Cambodia reflects proven alignment with Beijing’s interests. Conversely, India, Japan, and increasingly the Philippines remain secondary markets for Chinese arms, as their strategic autonomy is considered less assured. Through drone exports, Beijing signals: “Choose us, and we’ll equip you with cutting-edge capability without the political strings of Western suppliers.”

Regional Transformation:
Thailand’s potential Wing Loong II procurement could catalyze a cascade effect. If Bangkok operationalizes armed drone strikes and demonstrates persistent ISR over sensitive areas, Malaysia will feel pressure to accelerate ANKA-S deployment. Indonesia—the largest ASEAN economy—could face pressure to select Chinese systems for cost efficiency, despite recent strategic hedging toward India/Japan partnerships. Vietnam, despite historical tensions with China, might rationalize Chinese drone purchases as economically pragmatic.

Non-Traditional Security Drivers: Why “Sporadic” Makes Sense

ASEAN’s drone adoption appears “sporadic” because threat perceptions are localized, not coordinated at regional level:

Indonesia/Philippines: Radicalization, maritime piracy, drug trafficking
Thailand: Southern insurgency, illegal fishing, border infiltration
Malaysia: Chinese incursions, resource protection, critical infrastructure
Singapore: Terrorism prevention, critical infrastructure (port, airport, financial center)
Vietnam: Chinese territorial pressure, resource disputes, surveillance needs

This heterogeneity prevents unified ASEAN drone strategy, creating opportunities for external powers (China, India, U.S., Turkey) to customize offerings to individual nation-state interests. China has mastered this differentiated engagement—offering cheaper systems to budget-constrained partners, advanced variants to strategic allies (Pakistan, UAE), and maintenance hubs to create regional supply chains.

India’s Strategic Interests and the Act East Policy Nexus

Act East Policy: From Economics to Security

India’s Look East Policy (1991) focused primarily on economic integration with Southeast Asia. Prime Minister Modi’s Act East Policy (2014) represented a strategic reorientation toward decisive military engagement, defense industrial partnerships, and maritime security cooperation.

Current Institutional Framework:
The ASEAN Defence Ministers’ Meeting-Plus (ADMM-Plus), established in 2010, has evolved into the primary mechanism for India-ASEAN defense cooperation. India co-chairs four Expert Working Groups: (1) Humanitarian Mine Action (with Vietnam), (2) Military Medicine (with Myanmar), (3) Humanitarian Assistance and Disaster Relief (with Indonesia), and (4) Counter-Terrorism (with Malaysia, 2024-2027 cycle).

On October 31-November 1, 2025, Defense Minister Rajnath Singh addressed the 12th ADMM-Plus meeting in Kuala Lumpur, reaffirming that the forum is “an integral part of India’s Act East Policy and broader Indo-Pacific vision.” Singh characterized ADMM-Plus as having evolved from a “dialogue platform” into a “dynamic framework for practical defense cooperation”—emphasizing India’s commitment to regional capacity building, maritime security, and counter-terrorism cooperation.

ASEAN-India Elevation to Comprehensive Strategic Partnership (2022) marked a political milestone: the partnership now encompasses 30 dialogue mechanisms spanning political, economic, and security domains. Critically, the 2026 ASEAN-India Year of Maritime Cooperation signals prioritization of naval interoperability, counter-piracy operations, and maritime domain awareness—precisely where drone-based ISR would enhance regional capabilities.

India’s Drone Capabilities and Export Constraints

Indigenous Development:
India’s Rustom-II (TAPAS-201) MALE UAV, developed by DRDO’s Aeronautical Development Establishment (ADE), achieved 25,000-foot altitude and 10-hour endurance in recent trials (2021). Yet despite developmental progress, operational deployment remains limited. The aircraft faces production bottlenecks, integration delays, and user validation challenges—typical of indigenous defense development timelines. HAL and BEL (ground control stations) production capacity remains insufficient for export markets.

Export Potential:
India’s defense exports reached an all-time high of $2.76 billion in FY 2024-25—a 12% year-on-year growth—with exports to 100 countries. However, UAV exports remain negligible. India’s strength lies in missile systems (Brahmos, Akash), armored vehicles, and small arms—not high-endurance MALE platforms. The Rustom-II’s delayed commercialization has ceded the ASEAN market to China (affordability), Turkey (proven performance), and Israel (advanced sensors).

Counter-Drone Systems: India’s electronic warfare expertise—developed through decades of border management on China/Pakistan frontiers—represents a competitive advantage. India could position itself as the regional leader in counter-UAS systems, counter-drone jamming technologies, and integrated air defense solutions. This niche positioning offers a realistic export opportunity without competing head-to-head with China/Turkey on MALE platforms.

Challenges to Act East Implementation

Domestic Constraints:

The Northeast India infrastructure deficit undermines Act East credibility. The Trilateral Highway (India-Myanmar-Thailand), Kaladan Multi-Modal Transit Project, and Kalimati-Birgunj Rail Link remain incomplete, limiting physical connectivity to ASEAN partners. Political instability in Myanmar (since 2021 coup), ethnic conflicts in India’s northeast (Nagaland, Manipur), and competing budget priorities (China/Pakistan border buildup) divert resources from ASEAN engagement.

China’s Structural Advantages:
Beijing’s defense export ecosystem is mature and scalable. Production facilities in Chengdu, Harbin, and Shenyang can produce 100+ aircraft annually. China’s political-economy model allows state-subsidized pricing and soft loans for purchasers, making Chinese systems affordable for lower-income ASEAN nations. India lacks equivalent institutional capacity, competing instead through bilateral dialogues and demonstration exercises.

ASEAN Centrality vs. Minilateralism:
The QUAD (India-U.S.-Japan-Australia) and AUKUS (Australia-UK-US) create parallel security architectures that could be perceived as competing with ASEAN centrality. India’s need to balance U.S. expectations (within QUAD), Russian relationships (historical arms supplier), and ASEAN engagement creates strategic dilemmas. Acting too close to QUAD risks alienating mainland Southeast Asia (Laos, Cambodia, Myanmar), which sees minilateral groupings as anti-China blocs.

Implications for Regional Security Architecture

The Drone Arms Race Acceleration

Competitive Acquisition Dynamics:
Thailand’s Wing Loong II procurement, if finalized, will likely trigger counter-acquisitions across ASEAN. Malaysia may accelerate ANKA-S deployment, Indonesia may re-evaluate Chinese drone bids, Vietnam could expedite U.S./Turkish negotiations. This action-reaction cycle mirrors classical arms race dynamics, yet with a critical difference: drones lower barriers to entry.

A single Wing Loong II can strike targets 350+ km away, fundamentally altering force balances in maritime Southeast Asia where distances between disputed features span 50-150 km. The psychological impact—knowing an adversary possesses persistent, armed ISR capability—can shift military calculations and diplomatic posturing.

Airspace Management and Regulatory Challenges

UTM System Fragmentation:
Singapore’s advanced CFMS operates in isolation. Malaysia’s MDTAP30 and UTM initiatives are preliminary. Indonesia’s ongoing demonstrations suggest 5-7 year timeline to operational UTM. Thailand, Philippines, Vietnam lack coherent regulatory frameworks. This fragmentation creates airspace safety risks: mid-air collisions, interference with civilian aviation, and terrorist exploitation of regulatory gaps.

ASEAN-level Standardization:
The ICAO Asia/Pacific UAS guidance (2020) established recommendations for registration, identification, tracking systems, and communication protocols, yet adoption remains inconsistent. ASEAN should prioritize harmonized UTM standards, cross-border airspace agreements, and mutual recognition of pilot certifications—critical infrastructure for 21st century defense operations.

Alliance Patterns and Strategic Autonomy

Multi-Alignment Strategy:
ASEAN states are pursuing strategic autonomy through diversified partnerships. Malaysia’s Turkish drone choice, Thailand’s Chinese procurement, Philippines’ U.S. military cooperation, and Vietnam’s hedging strategy reflect calculated balancing rather than bloc-switching. This multi-alignment approach offers flexibility but complicates interoperability and joint operations in crises.

Defense Industrial Cooperation:
Thailand’s potential role as a Chinese drone maintenance hub could evolve into a regional support center for Wing Loong II operations across Southeast Asia. Conversely, Malaysia’s ANKA-S deployment could enable Turkish training and maintenance services establishing Kuala Lumpur as a Turkish logistics node. These industrial partnerships create structural dependencies that outlast political relationships.

Policy Roadmap: Strategic Imperatives for India

Strengthening Defense Industrial Cooperation

Indigenous MALE UAV Development for Export:
India should fast-track Rustom-II commercialization, targeting first export deliveries to ASEAN partners by 2027. Pricing strategy is critical: positioning Rustom-II at $45-55 million per unit (vs. Wing Loong II’s $50-70M and ANKA-S’s $80M+) while offering preferential technology transfer agreements and maintenance partnerships could capture 15-20% of ASEAN market share.

Counter-Drone Technology as Differentiation:
Rather than competing head-to-head on MALE UAVs, India should leverage its electronic warfare expertise to establish regional leadership in counter-UAS systems. Joint ventures with ASEAN partners (Malaysia, Singapore) for counter-drone R&D and integrated air defense integration offer a more realistic competitive advantage.

Infrastructure and Connectivity Enhancement

Northeast India as Gateway:
Acceleration of Trilateral Highway (target 2026), Kaladan Multi-Modal Transit (target 2027), and multimodal logistics parks in Assam/Manipur would materially strengthen Act East credibility. These physical infrastructure investments enable defense industrial partnerships, training exercises, and personnel exchanges that raw diplomacy cannot achieve.

Maritime Cooperation:
Implementation of SAGAR (Security and Growth for All in the Region) and MAHASAGAR (Mutual and Holistic Advancement for Security and Growth across Regions) initiatives should prioritize maritime domain awareness cooperation, including satellite-drone hybrid systems for illegal fishing interdiction and freedom of navigation enforcement in the South China Sea.

Diplomatic and Strategic Engagement

ADMM-Plus Institutionalization:
India should position itself as lead nation for specific Expert Working Groups, host annual India-ASEAN defense expos showcasing indigenous capabilities, and increase officer exchange programs. Making ADMM-Plus a credible alternative to QUAD/AUKUS through tangible capacity building and shared sovereignty respect enhances India’s regional standing.

Countering China’s Influence Through Values:
China’s defense diplomacy operates on a “no-strings-attached” model—weapons systems without political conditionality. India can differentiate by emphasizing democratic values, respect for sovereignty, UNCLOS adherence, and transparent procurement processes. While less immediately attractive to authoritarian regimes, this values-based narrative resonates with democratic ASEAN partners (Philippines, Indonesia, Thailand, Malaysia post-2022 reforms).

Regulatory and Governance Frameworks

Drone Standards Harmonization:
India’s Digital Sky Platform experience (India’s airspace management framework) could be adapted for ASEAN adoption. Collaborative development of ASEAN-wide UAV certification standards, airworthiness protocols, and UTM interoperability frameworks positions New Delhi as a technical standard-setter rather than just a vendor.

Counter-Terrorism and Transnational Crime:
Real-time intelligence sharing on drone-enabled terrorism (from India’s experience with non-state actors) and trafficking interdiction (drug/human smuggling routes spanning ASEAN) creates practical security value beyond military hardware sales.

Challenges to Policy Implementation

Resource Constraints and Competing Priorities

India’s defense budget, while growing (INR 5.9 trillion in 2024-25), faces competing demands: China border buildups (LAC), Pakistan contingencies, and maritime modernization all consume resources. Allocating 0.5% of defense budget (~$340 million annually) to ASEAN capacity building is realistic but requires political will to reduce competing programs.

Defense export ecosystem remains nascent: Unlike China’s vertically integrated state defense industry, India’s production relies on HAL (public), BEL (public), and private contractors with fragmented incentives. Establishing seamless export pipelines requires institutional innovation India has only begun implementing (iDEX, Make-I/Make-II categorization).

Geopolitical Complexities

ASEAN Non-Interference Doctrine:
ASEAN’s founding principle of non-interference in internal affairs limits India’s ability to pressure partners on defense procurement or security alignments. Balancing principled advocacy (for democratic values, UNCLOS adherence) with respect for sovereignty requires diplomatic finesse India doesn’t always demonstrate.

Mainland Southeast Asia’s China Alignment:
Laos, Cambodia, and Myanmar—identified as “China’s primary defense partners” in the Lowy Institute analysis—have structural dependencies on Beijing (Belt and Road Initiative, military training, arms supplies). India cannot realistically displace China in these contexts, limiting Act East’s effectiveness in northern ASEAN.

Domestic Political Factors

Northeast Instability Undermines Credibility:
Ongoing insurgencies in Nagaland, Manipur, and Mizoram, combined with connectivity deficits, send a contradictory message: India asks ASEAN to invest in defense partnerships while struggling to stabilize its own eastern borders. This credibility gap weakens negotiating leverage.

Bureaucratic Coordination:
India’s defense export success requires seamless coordination between MEA (foreign policy), MOD (procurement), Services (user validation), and HAL/BEL (production). The lack of a single nodal agency for defense exports—unlike China’s CAMT (China Advanced Materials Transfer)—results in inefficiencies, delayed approvals, and missed opportunities.

Future Scenarios: 2025-2030 Outlook

Scenario 1: Optimistic — India as Preferred Defense Partner

In this scenario, India achieves Rustom-II export certification by 2026, secures initial ASEAN orders (Malaysia, Philippines, Vietnam), and establishes counter-drone R&D partnerships with Singapore. Act East yields tangible security dividends: Northeast infrastructure improves, ADMM-Plus evolves into binding framework, and India captures 15-20% ASEAN drone market share. China’s drone dominance begins to erode at the margins, replaced by a multipolar defense landscape.

Probability: 20-25% — Requires sustained political will, industrial capacity breakthroughs, and favorable geopolitical conditions (e.g., Vietnam-Philippines-Philippines coordination against China).

Scenario 2: Base Case — Continued Chinese Dominance with Indian Niche

China maintains 60-70% market share, leveraging cost, production capacity, and established supply chains. India establishes niche presence in counter-drone systems, training, and capacity building. Act East makes incremental progress: ADMM-Plus remains dialogue-heavy, maritime cooperation advances modestly, but no transformative shift in strategic architecture. QUAD-ASEAN divergence persists, with India balancing competing loyalties.

Probability: 55-65% — Reflects structural factors (China’s institutional advantages, India’s capacity constraints) likely to persist through 2030.

Scenario 3: Pessimistic — Strategic Marginalization

India’s Act East stalls due to Northeast instability, budget diversion to China/Pakistan borders, and inability to compete with Chinese cost/capacity. China achieves near-monopoly on ASEAN defense systems, creating operational dependencies that entrench Beijing’s strategic influence. QUAD-ASEAN divergence accelerates, isolating India from multilateral security architecture. By 2030, India is seen as a secondary tier defense partner, relevant only for niche applications or aspirational hedging.

Probability: 15-25% — Could materialize if geopolitical tensions intensify (Taiwan crisis, major India-Pakistan conflict) or if India fails to resolve internal stability challenges.

Conclusion: Strategic Imperatives for India

Strategic Recommendations

Accelerate Rustom-II Commercialization: Target first export deliveries to ASEAN by 2027; price competitively at $45-55M per unit; offer technology transfer and maintenance partnerships.
Counter-Drone Leadership: Establish India as regional expert in counter-UAS systems, electronic warfare integration, and air defense modernization—offering competitive advantage vs. Chinese/Turkish mainstream MALE systems.
Infrastructure as Diplomacy: Complete Trilateral Highway, Kaladan Multi-Modal Transit, and multimodal logistics parks by 2026-2027 to demonstrate Act East commitment through physical connectivity.
ADMM-Plus Transformation: Position ADMM-Plus as a credible alternative security architecture to QUAD/AUKUS, with India as lead node for counter-terrorism, maritime security, and humanitarian assistance.
Northeast Stabilization: Address insurgencies, insurgent networks, and connectivity deficits to establish credibility for Act East promises. ASEAN partners must see India as stable, not as a nation struggling with internal challenges.
Regulatory Leadership: Use Digital Sky Platform expertise to establish ASEAN-wide UTM standards, positioning India as technical standard-setter in the low-altitude economy.

Annexures

Country-Wise Drone Procurement Status

Country	Drone System	Supplier	Capabilities	Timeline	Strategic Driver
Thailand	Wing Loong II	China	20-hour endurance, precision strike	FY 2026	Border/counterinsurgency
Malaysia	ANKA-S	Turkey	24-30 hour endurance, satellite comms	Feb-Mar 2026	Maritime sovereignty
Singapore	CFMS/UTM Systems	Indigenous	Advanced airspace management	Operational	Critical infrastructure
Indonesia	UTM Platform (Unifly)	Japan/Belgium	Multi-drone coordination	2025-2027	Logistics/emergency response
Philippines	NMESIS/Sea Drones	USA/Ukraine	Anti-ship capability, maritime defense	2025-2026	Sovereignty/counter-China
Vietnam	Various (TBD)	USA/others	TBD	2026-2027	Maritime domain awareness