By Larry Jagan BBC South East Asia analyst

The Indian Prime Minister Atal Behari Vajpayee has arrived in the Cambodian capital Phnom Penh to attend the summit of the Association of South East Asian Nations, Asean.

On Tuesday the Indian prime minister and the ten leaders of South East Asia will hold their first ever summit, known as Asean plus one.

While the issue of terrorism is likely to dominate discussions, closer economic co-operation between the two sides will also be high on the agenda.

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For Delhi the meeting marks a crucial development in their efforts to improve relations with South East Asia and Indian officials believe it is the start of closer ties with South East Asia as a whole.

Indian officials say the summit with the South East Asian leaders in Cambodia vindicates the government's Look East policy.

Upgrading relations

Since 1992, Delhi has been an Asean dialogue partner but for some time now it has been anxious to strengthen its relations with the regional grouping as a whole.

While India hopes the upgrading of their relations means they may now have increased political influence within the region, it is the economic potential of the relationship which is the main incentive for the countries of South East Asia.

Singapore's prime minister, Goh Chock Tong told the BBC India's economic potential for trade and outward investment was a major attraction East Asia must take advantage of.

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At present bilateral trade between India and the Asean countries is less than $10bn at present, but Indian financial analysts believe this could more than double in the next few years.

The attraction of closer links with two of the world's largest markets, outside North America, a billion consumers in China and half-a-billion in South East Asia, has certainly encouraged the Indian government to push its Look East policy.

Fears

For sometime though the Asean countries have been split on the advisability of closer ties with India.

Some countries feared this might drag South East Asia into the political and territorial problems of South Asia, particularly the issue of Kashmir.

While Singapore has long championed India's cause, until recently the Malaysian prime minister, Dr Mahathir Mohammad, has been adamantly opposed to the idea of an Asean-India summit.

But in the past year or so, he has changed his mind.

Analysts believe that by upgrading relations with India, Asean Delhi will provide a strategic balance to North Asia's influence, now that there is a regular summit with China, Japan and South Korea, known as Asean plus three.

While Asean is already developing a free trade zone with North Asia, Asean officials say there are no plans to extend that to include India.

But that does not mean some South East Asian countries will not do that bilaterally, as both Singapore and Thailand have begun to do.

For India though ASEAN provides another channel to North East Asia, particularly China.

Mr Vajpayee will also be meeting his Chinese and Japanese counterparts in Phnom Penh, as well as the 10 South East Asian leaders; from Brunei, Burma, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam.