Act East to Act Indo-Pacific: India’s Expanding Neighbourhood*
Prabir De**
In the early 1990s, if one was looking around the world to find the most promising region for international cooperation, Southeast Asia (or what is known as ASEAN) certainly appeared at the top of the list. India’s current relations with Southeast and East Asia began in the early 1990s, when the country undertook the Look East Policy (LEP) as an effort to strengthen economic and strategic relations with Southeast and East Asian countries. In 1992, India joined ASEAN as a sectoral partner, at a time when India was relatively a closed economy. India started its journey to globalisation through LEP. This journey has been quite well-thought since ASEAN-India relations have been firmly embedded in the civilisation that goes back a couple of millenniums. Gradually, the LEP, which was in force for more than two decades, has been transformed into the Act East Policy (AEP) with ASEAN at its core, and the north-eastern region of India has become a key component of India’s growing economic and strategic partnership with East and Southeast Asia.
Since its inception, the LEP has been pursued in a multi-faceted manner in wide-ranging areas such as connectivity, trade, and investment. The objective of AEP is to expand India’s economic engagement with Southeast and East Asian countries.[1] Some of the important developments of the policy relate to improving economic relations with ASEAN countries, China, Japan and Korea. The AEP has also been pursued through constructive engagement with ASEAN, the East Asia Summit (EAS), the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and the Mekong–Ganga Cooperation (MGC). In 2019, India has decided to become the development partner of Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS) and Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT).
Although the policy has undergone a major change in recent years, ASEAN has remained as the core of India’s growing interaction with Southeast and East Asia. The India–ASEAN relationship has entered its third decade. India’s association with ASEAN provides a rich experience that India cherishes in the contemporary period. India became a sectoral partner of ASEAN in 1992, a dialogue partner in 1996, a summit-level partner in 2002, a strategic partner in 2012. In 2018, India and ASEAN celebrated the 25 years of their dialogue relations. Such a journey is well documented, and a great success story of India’s foreign policy.
Combined, India and Southeast Asia are home to 1.8 billion people and have an economic size of US$ 3.8 trillion, sharing substantial world resources, economic and otherwise. With a free trade agreement (FTA) in goods in 2010, ASEAN and India have created a versatile economic space, which has been the first major step toward creating an ASEAN–India regional trade and investment area. Although trade in services and investment agreement between ASEAN and India have been ratified, it is yet to be implemented. Meanwhile, India has decided to quit from the Regional Comprehensive Economic Partnership (RCEP).
Table 1: Indian Foreign Policy over Time: Look East to Act East
| Period | Focus |
|
1991 – 2000 |
· Look East Policy
· SAARC · ASEAN |
|
2001 – 2010 |
· Look East Policy
· ASEAN · BBIN · BIMSTEC · BCIM |
|
2011 – 2013 |
· Look East Policy
· BIMSTEC · BBIN · ASEAN · MGC |
|
2014 – 2017 |
· Act East Policy
· Act East – North East · ASEAN · BBIN · BIMSTEC |
|
2018 – 2019 |
· Act East Policy
· Act East – North East · ASEAN · BIMSTEC · MGC · Act Far East · Indo-Pacific |
Source: Author’s own.
ASEAN has become one of India’s largest trading partners in recent years, and trade with ASEAN increased from US$ 7 billion in 2000 to US$ 100 billion in 2019. India’s trade with ASEAN presently comprises around 10 per cent of India’s global trade, compared to 8 per cent in 2000. India’s trade with ASEAN+3 countries, driven mainly by India’s trade with China, increased from less than US$ 15 billion in 2000 to over US$ 200 billion in 2019, growing at a compound annual growth rate of around 25 per cent since the beginning of the last decade – perhaps the fastest trade growth ever witnessed by India with any economic bloc in the world. With ASEAN, India has a rising trade deficit in the current account but has witnessed a surplus in the capital account, thereby showing a falling economic asymmetry between them.
Over time, India’s diplomatic agenda has broadened considerably. As can be seen from the Table 1, the East and Southeast Asia region has become an important component of India’s external economic relations.
Indian External Affairs Minister noted: “Seven decades of foreign policy certainly offer a lot of lessons, especially if we contemplate a challenging road ahead”.[2] While expanding the economic and security relations with countries in South and Southeast Asia, India has faced several challenges, particularly from China. China’s Belt and Road Initiative (BRI) has taken the world economy into a great risk of insolvency, and market economies like India cannot accept such a China-centric global order. On top, rising confrontations between the US and China has given birth to increasingly complex challenges to regional cooperation and collective partnership.[3] Nonetheless, India has to continue to advance its interests in the region, and balancing relations with major powers may perhaps best suit India’s interests. This is also not to be forgotten that ASEAN countries have an extensive economic relationship with China. However, they are also fearful of China’s growing power. At the same time, ASEAN countries prefer to make a balance between China and the US or China and India. A deeper partnership with ASEAN thus makes sense while pursuing the Indo-Pacific ambition.
The term Indo-Pacific, as it is evolving, reflects the growing salience of India’s economic and security profile, extending beyond the Indian Ocean into the western Pacific and Africa.[4] Besides economic relations, India’s security partnerships with countries in the Indo-Pacific such as the US, Japan, Australia and several ASEAN countries, have expanded significantly in recent years. In that sense, Indo-Pacific is the best option for India to march ahead in the next decade while aiming towards a US$ 5 trillion economy by 2025.
India’s regional connectivity with Southeast Asia and also with the Bay of Bengal countries has been coming up fast, which has been evolving on two pillars: northeast India for multimodal and intermodal operations, and southern India for multimodal operations. India’s connectivity with Southeast Asia, although at present at an initial stage of development, may appear as a great facilitator of Indo-Pacific relations in coming years.[5]
Indo-Pacific countries are becoming more economically integrated, with ample scope for deepening this integration process. Given India’s diversity and geographical contrasts, an integrated transport network is required to support the integration process. Enhancing regional integration in Indo-Pacific is a multifaceted task that will require the implementation of strong policy initiatives. Therefore, both India and other Indo-Pacific countries need a shared strategic vision, political will and strong commitment, which are the keys for the success of Indo-Pacific. If the period 1990 to 2019 is known as the period of LEP and the AEP, the coming decade will be known as the decade of Indo-Pacific.
References
De, Prabir (2020) Act East to Act Indo-Pacific: India’s Expanding Neighbourhood, Knowledge World, KW Publishers, New Delhi
NMF (2019) Indo-Pacific Report 2019: Indo-Pacific Partnership: Realising the Benefits of Economic and Maritime Cooperation, National Maritime Foundation (NMF), New Delhi.
Saran, Shyam (2019) “India’s Foreign Policy in an Uncertain World”, in Centre for Policy Research (CPR) (ed.) Policy Challenges: 2019-2024, Charting a New Course for India and Navigating Policy Challenges in the 21st Century, New Delhi.
*Based on De (2020) **Author is Professor, RIS and Head, ASEAN-India Centre (AIC), RIS, New Delhi, e-mail: prabirde@hotmail.com. Views are author’s own.
[1] See, the speech of Indian Prime Minister, Narendra Modi, at the 12th ASEAN-India Summit, held at Nay Pyi Taw on 12 November 2014, available at http://www.mea.gov.in/Speeches-statements.htm?dtl/24236/Remarks_by_the_Prime_Minister_at_12th_IndiaASEAN_Summit_Nay_Pyi_Taw_Myanmar
[2] Refer, the fourth Ramanath Goenka lecture delivered by the Indian External Affairs Minister Dr S Jaishankar on 14 November 2019 at New Delhi, available at https://www.mea.gov.in/Speeches-Statements.htm?dtl/32038/External_Affairs_Ministers_speech_at_the_4th_Ramnath_Goenka_Lecture_2019
[3] Refer, for example, Saran (2019).
[4] Refer, Indian Prime Minister Modi’s speech at Shangri La Dialogue, delivered on 1 June 2018 in Singapore, available at https://www.mea.gov.in/Speeches-Statements.htm?dtl/29943/Prime+Ministers+Keynote+Address+at+Shangri+La+Dialogue+June+01+2018
[5] Refer, NMF (2019), which provides a detailed overview of the Indo-Pacific construct.