By Larry Jagan BBC South East Asia analyst

India's relations with South East Asia have entered a new phase as a result of Prime Minister Atal Behari Vajpayee's latest trip to the region.

India is now clearly part of the region's future

Thai commentator Kavi Chongkittavorn

The first-ever summit between Indian and the Association of South East Asian Nations (Asean) in Phnom Penh earlier this week clearly reflected the new closeness that has now developed between the region and India.

In the past few years, the prime minister has made repeated visits to the region trying to encourage increased trade and increase Delhi's political influence.

"The PM's commitment and persistence has paid off," says a senior Indian official who didn't want to be identified.

For India, this was a crowning moment in the government's attempts to improve its relations with South East Asia and its "Look East" policy.

Trade ties

Asean and India have now agreed to work towards a negotiating a free trade agreement within the next 10 years.

Asean members

Brunei Burma Cambodia Indonesia Laos Malaysia Philippines Singapore Thailand Vietnam

That is great news for Indian businessmen like Jamshed Godrej.

"There is great synergy between Asean and India, more so than between Asean and China, and businesses in both regions can only prosper from a free trade pact," says the Bombay-based businessmen with extensive investments in South East Asia, particularly Malaysia.

Although the free trade agreement with Asean may be sometime down the line, Delhi is already close to negotiating bilateral free trade agreements with several countries in the region.

Officials say pacts with Singapore and Thailand should be concluded early next year.

In Bangkok, on his last stop on this trip to the region, Mr Vajpayee discussed the issue with his Thai counterpart, Thaksin Shinawatra, over lunch on Friday.

Negotiations will resume at a technical level in India next week.

China

But apart from the economic opportunities in South East Asia that better relations with Asean may bring, many Indian businesses believe developing a strong Indian presence will give them an excellent launch pad into China.

"The countries of Asean have had a long relationship with China," says Tarun Das, the director general of the Confederation of Indian Industry.

China offers a huge market

"Businesses in South East Asia can act as excellent intermediaries with Chinese officials and businessmen for Indian companies."

Fear of being embroiled in South Asia's internal conflicts, especially Kashmir, had discouraged many countries from developing closer relations with India in the past.

In terms of Asean's economic vision of the future, India is central to the region's strategy for future development.

Strategic balance

But there are crucial strategic reasons for Asean to strengthen its relations with India.

Many of the leaders of South East Asia see India as providing an important counter-balance to the influence of countries like China, Japan and South Korea.

Singapore's prime minister has been one of the main supporters of upgrading Asean's ties with India.

For him there is both an economic as well as a strategic imperative.

At the summit he described the new Asean as a jumbo jet - the 10 countries of South East Asia being the body of the plane, with China, Japan and Korea one wing, balanced by India as the other.

Everyone's hope is that this new era of relations with India will help boost trade and investment between the two in the short run.

Analysts estimate that the value of bilateral trade between India and the countries of Asean could easily treble to more than $30bn within the next three years.