Friday, January 18, 2013

India’s Look East Policy Gains Momentum

Vinod Anand 
(Senior Fellow, VIF) 

The ASEAN-India Commemorative Summit held in New Delhi last month, was the taking forward of a process that began two decades back with the unveiling of India’s Look East Policy (LEP) in 1992. That was also the time when India had ushered in its new economic policy and put into place economic reforms. During that period while the so called tiger economies of South East Asia were doing very well while India’s economy was in doldrums. The dominant impulse of India’s LEP was economic engagement with the ASEAN countries. Since then India has progressed from a dialogue partner to the present status of a strategic partner. 

In the geopolitical context the India-ASEAN summit was particularly important as it highlighted continued integration of a common policy of peace and stability in the region by building mechanisms of engagement. Within this context, India has attempted to place the South China Sea issue in an appropriate perspective during the Summit as well as in the various bilateral high level meets held on the sidelines. 

Largely, the objective of the Summit was to consolidate the gains made so far in economic, political, security and other spheres and articulate a vision for the future. Thus, at the end of the Summit a Vision statement was issued which underscored the future pathways for enhancing ASEAN-India engagement. 

During the summit, India also endorsed ASEAN’s centrality and its role as the driving force of both economic and security for ASEAN integration. India has also taken initiatives in ASEAN Community building process and cooperation through contributions via ASEAN-India Fund (AIF), ASEAN-India Green Fund (AIGF), ASEAN-India Science & Technology Development Fund (AISTDF) as also through direct financial assistance to various research and development projects which has been well appreciated by ASEAN nations.

Economy and Trade

 India has a robust economic relationship with ASEAN. The trade volume between ASEAN and India has surpassed the USD 79.3 billion level in 2011-12 crossing the target of USD 70 billion by 2012 set in 2009. By 2015, trade figures have been projected to touch USD 100 billion. PM Manmohan Singh envisioned the trade volumes reaching USD 200 billion within 10 years from now. These are very ambitious targets but achievable if FTA in services sector is concluded soon. However, these trade volumes are much less when compared with ASEAN-China trade which stands at USD 362.8 billion. China is ASEAN’s largest trading partner for the past three years. Even with an ambitious target of growth, it is unlikely that India will be able to catch up with China in the near future. After concluding Free Trade Agreement (FTA) with ASEAN in goods in 2009 (which was operationalized in 2011) India had hoped to sign FTA in services and investments with the ASEAN. However, only the negotiation process on FTA in services and investments has been concluded. It is likely that it may be signed sometime next year as some countries like Philippines are still wary that such an agreement may have negative domestic impact. 

Improved Connectivity is another important factor that would strengthen the linkages between ASEAN and India. India is in the process of building India-Myanmar-Thailand Trilateral Highway and its extension to Lao PDR and Cambodia and has undertaken a new highway project connecting India-Myanmar-Lao PDR-Viet Nam-Cambodia as well as developing the Mekong-India Economic Corridor (MIEC) connecting Southeast Asia to South Asia on the eastern part of India in order to add greater momentum to the growing trade and investment linkages between ASEAN and India. But, as is well known, India has a record of tardy implementation of its projects and there are always some bureaucratic hassles in utilisation of allotted funds. Greater physical connectivity would provide the impetus for economic integration with the region. 

Political and Security Cooperation

Use of existing ASEAN-led regional processes, such as the ASEAN Defence Ministers Meeting (ADMM) Plus to promote defence and military exchanges and cooperation, and the ASEAN Regional Forum (ARF) to foster constructive dialogue and consultation on political and security issues was emphasised during the summit. The aim is to address traditional and non-traditional security challenges, including transnational crimes and implementation of the ASEAN-India Joint Declaration for Cooperation to Combat International Terrorism. 

India has been advocating further cooperation to ensure maritime security and freedom of navigation, and safety of sea lanes of communication to facilitate movement of trade in accordance with international law, including UNCLOS. Great emphasis was paid to this aspect largely due to the on-going maritime disputes in the South China Sea (SCS), though China was not mentioned by name. China’s assertive policies in the South China Sea appear to be the primary drivers for the ASEAN nations to work towards a common approach on the security issues. 

Leaders of some countries especially Vietnam PM touched upon the SCS dispute but India avoided the issue and remained focussed on the centrality of the maritime domain and closer security ties with the ASEAN. Earlier Philippines’ Vice President, Jejomar Cabanatuan who attended the Summit on behalf of his President had observed that “In the present day, the issues are no longer of parochial interest. Freedom of navigation and lawful commerce are universal interests. The statement of the Admiral (Indian Naval Chief) is a confirmation that it is a problem (South China Sea disputes escalation by China) that India cannot turn its back on.” Earlier, PM Manmohan Singh had also underscored some of the above issues when at Pnom Penh (at the 10th ASEAN Summit ) in November, 2012; he stated that  “India and ASEAN should not only work for shared prosperity and closer links between our peoples, but also to promote peace, security and stability in the region” 

Socio-Cultural and Development Cooperation

 Socio-cultural cooperation and promotion of greater people- to-people interaction through increasing exchanges in culture, education, youth, sports, creative industries, science and technology, information and communication technology and software, human resource development and scholarly exchanges are areas which would lead to integration. Dissemination of knowledge about the civilisational links between ASEAN and India was another way forward in this area.

Preservation, protection and restoration of symbols and structures representing civilisational bonds between ASEAN and India like Angkor Wat in the Kingdom of Cambodia and many other such places in other ASEAN countries has been in important area where India and ASEAN countries have been working together with positive results. 

Further, India has also been paying special attention to the CLMV (Cambodia, Laos, Myanmar and Vietnam) countries that represent a bridge between ASEAN and India by intensifying focus on human resource development and capacity building e-initiatives.


India’s LEP seems to have come of age after two decades of engagement with the ASEAN. The economic and trade linkages which saw an expansion of trade volumes stand testimony to the intensified economic engagement. However, the FTA in goods signed with the ASEAN may have had some negative effect on some of the goods produced domestically. But, it is the FTA in services which is expected to create more synergies and balance in trade and investments.

One of the key outcomes of the Summit has been elevating the level of ASEAN-India engagement to that of strategic partnership. The relationship which had been largely economic oriented has now acquired the dimension of security cooperation in maritime domain and both in traditional as well as non-traditional areas of security. ASEAN countries, some of whom are at odds with China due to SCS dispute see in India a balancer even though India would not be able to match China in terms of economic and military strength for many years to come. In addition to the multilateral engagement with the ASEAN countries through its security mechanisms India has bilateral cooperation with most of the ASEAN countries to address defence and security concerns. India is particularly keen to strengthen its defence and maritime security cooperation with countries like Myanmar, Thailand, Singapore and Indonesia. Vietnam and Malaysia also remain important. And it is also not neglecting other countries of the ASEAN. Nevertheless all the ASEAN members and India have deep bilateral relationship with China. Thus, the challenge for India and ASEAN, in the next two decades, would be how to balance their burgeoning inter-se relationship with that of larger and more powerful China.

ASEAN itself is somewhat a divided house, especially when it comes to their approach to China with some of the countries like Cambodia and perhaps even Laos and Myanmar which have seen massive investments from China (China has invested over USD 363 billion 2011in ASEAN) following a different path from some of the political positions articulated by other countries of ASEAN. In addition, America’s Asian pivot strategy is creating its own reverberations in SE Asia complicating the emerging strategic scenario. Meanwhile India’s LEP which was premised on economic engagement has graduated to, as mentioned earlier, to a kind of Secure East policy. However, realisation of such a policy would not be an easy task.

Global Trends 2030 Report by US National Intelligence Council has forecast a scenario in 2030 where India may be doing better than China economically because of several factors as mentioned in the report. In the current scenario, India is being seen by ASEAN as a benign power and a responsible regional stakeholder. There is also a degree of scepticism regarding the ability of a far away power like the US’ capacity to be a security provider in this region considering its declining economic power and other attributes. India has been supporting freedom of navigation and UNCLOS. But the question remains how far India would be willing to contribute to the regional security when push comes to a shove. This would be the most difficult decision to make even if and when India acquires adequate capabilities.

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