Modi Acts East: Challenges and Possibilities Abound

The famed “Look East Policy” was launched by the erstwhile Prime Minister P. V. Narasimha Rao in 1991, in the backdrop of India’s nascent economic liberalization drive, amidst a unipolar world moment, whilst displaying a sense of a pragmatic foreign policy outlook. The erstwhile Indian economy was very much dependent upon the former Soviet Union, but the downfall of the erstwhile Soviet bloc forced India to look at alternative options like South East Asia, while realizing the immense scope for growth in the aforementioned region, with China and Japan already having established their foothold, as the major economic players of this regional market.

The “Act East Policy” was launched by Prime Minister Narendra Modi, at the East Asia Summit which was held in Myanmar in November, 2014, to promote economic co-operation, cultural ties and develop a strategic partnership with the countries in the Asia-Pacific region, by employing the means of continuous engagement at the bilateral, regional and multilateral levels. The immediate context, was dictated by the need to tackle the geo-political crisis, as emerging out of Chinese dominance in the South China Sea (SCS), along with its rising influence in the Indian Ocean Region (IOR).

Thus, “Act East” and “Look East” are not very much different, but rather they represent both sides of the same coin, while representing two different but continuing phases of the evolution of Indian foreign policy, with regards to the Asia-Pacific region.

The Act East Policy is based upon 4 Cs – Culture, Commerce, Connectivity, and Capacity Building, as can be attested by Prime Minister Modi’s vision for the region, which can be summed up as SAGAR – Security and Growth for All in the Region. While ASEAN is being treated as the continuing anchor of India’s Act East Policy, observers have also noted the recent shift from an “Act East” to an “Act Indo-Pacific” strategy.

India is also actively engaging in various regional forums apart from the ASEAN like the ASEAN Regional Forum (ARF), East Asia Summit (EAS), Indian Ocean Rim Organization (IORA), Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), Asia Cooperation Dialogue (ACD), and Mekong Ganga Cooperation (MGC).

Under the auspices of the AEP, India’s traditional relationship with the ASEAN has been significantly expanded to encompass security, strategic, political and counter-terrorism realms, especially concerning the rising strength and influence of the Islamic State in this regional space, as defence partnerships with several ASEAN states like Singapore and Vietnam, has assumed the status of a “Comprehensive Strategic Partnership”.

The AEP has seen a major shift in its geographical coverage, with the essential inclusion of East Asian countries like Japan, South Korea and Mongolia, as well as several Pacific Island Nations (PINs) like Fiji and Australia. Such an undertaking is essentially aimed at finding alternatives of the traditional business partners, along with the lucrative financial prospect as emanating from the Special Economic Zones (SEZs) that are located in these PINs.

Recently, India has reached out to Far East economies under the aegis of the “Act Far East” policy, especially Russia. India has announced to extend a $ 1 billion line of credit towards the development of the Russian Far East. This development is of immense significance, as it is an energy rich region that would help India’s growth.

An important recognition has been the understanding that AEP’s success will be measured, based upon its contribution to the security and economic development of India’s North East Region (NER), which is being treated as a “Gateway to East and South East Asia”. In line with such a thinking, Japan is helping India with funds to the tune of $ 17 billion to develop various infrastructure projects in this aforementioned region, which is compounded by the Indo-Japanese effort to augur connectivity in Sri Lanka, Bangladesh, and Myanmar. Some of the proposed developments in this regard, include the Kaladan Multi-Modal Transit Transport Project, Border Haats, and the Rhi-Tiddim Road Project.

Another major area of consternation for the AEP is the disputatious claims as made by China concerning the South China Sea (SCS), with India firmly articulating its principled position concerning freedom of navigation, maritime security, and expeditious resolution of disputes, while adhering to the UN Convention for the Law of the Sea (UNCLOS), harping upon a Code of Conduct, to solve mutual disputes through a friendly dialogue. This development is of special concern for India as 40 % of its trade traverses through this region, along with its burgeoning interests for harnessing the fossil fuels of this region.

In this context, India and Vietnam are collaborating for extensive oil exploration in the SCS, where China claims its sovereignty. Similar to China developing its ports in the Indian Ocean, India along with Indonesia is developing a port called Sabang near the Strait of Malacca, under the aegis of the ambitious “Necklace of Diamonds” strategy aimed at encircling China.

Recently, the Indian Prime Minister came up with an “Indo-Pacific Oceans Initiative”, which focuses upon the themes of creating partnerships among interested states in enhancing maritime security, sustainably using marine resources while harping upon “Blue Economy”, along with disaster prevention and management.

A concerted effort has been witnessed in aligning the AEP with the US’s “pivot” strategy to Asia, through the enunciation of a Joint Strategic Vision, aimed at providing India with a modicum of manoeuvrability, along with  much needed geo-strategic space to counter the growing assertiveness of China, compounded with the goal of fostering a balanced relationship with the same.

An outcome of this burgeoning strategic engagement is the Quad, which is a dynamic strategic dialogue of like-minded democracies, converging across the Indian and Pacific oceans, comprising the US, Japan, India, and Australia. It is conspicuously perceived to be a “symbiotically linked military” alliance formed to contain China, with the latter duping it as the “Asian NATO”. Recently, the Quad has assumed the shape of a “framework”, while harping upon climate change, technology transfers, augmenting Covid-19 vaccine availability for various developing and underdeveloped nations, and other emergent issues.

Scholars are of the opinion that the decision to opt out of the Regional Comprehensive Economic Partnership (RCEP), which was supposed to mark the espousal of a Free Trade Agreement (FTA) on investment and services between the ASEAN and India, has the potential to harm India in the ultimate extent.  As on account of the RTAs with some of the members of the RCEP, it would be a Herculean task to stop imports from third countries being routed through these nations, based upon the frivolous “Rules of Origin” clause. India is also missing upon a golden opportunity to be the part of a global value chain, if the MNCs think of shifting their base of operations from China, with the obvious preference being a RCEP member like Vietnam.

ASEAN itself seems to be a divided house, with some smaller countries like Cambodia wary of openly embracing the concept of Indo-Pacific, in the fear of raising China’s wrath. Several big players like Malaysia and Singapore too are hesitant, which is paradoxically a consequence of the ASEAN’s successful economic integration with China The recent coup d’état in Myanmar, which is an integral part of this regional grouping, while boasting of substantive Chinese investments, has further complicated the precarious situation.

India has tried to stress on additional platforms like BIMSTEC in recognition of this problem, while partly trying to side-line the South Asian Association for Regional Co-operation (SAARC), which includes Pakistan. However, the effort to conduct the first-ever BIMSTEC military exercise saw two countries Nepal and Thailand, refusing to join.

The Modi government should strive to facilitate overseas project implementation to reduce delivery time, while harping upon better planning of projects, offering attractive terms for lending, and working seamlessly with the private sector. A balanced, fair and equitable trade relationship is of seminal importance, while making India’s manufacturing competitive by focussing upon capital sector reforms and easing of land acquisition, which would help India to check its negative trade deficit with ASEAN.

India’s ability to support smaller partners will be found wanting without sufficient defence industrial export capability. While exports of offshore patrol vessels and coastal radars are positive developments, this could extend to other areas as well through the improvement in the investment climate in India’s defence sector, and factoring in export potential for various platforms during their initial procurement.

An improvement in air connectivity has the capability to contribute to travel demands and enhanced infrastructure, as few countries in the South East Asia Region (SEAR) remain greatly under-connected. India can benefit from direct air connectivity with Myanmar, Indonesia, Vietnam, and the Philippines, which in turn would boost business ties, tourist traffic, and cultural exchanges. Living up to commitments like setting up of ASEAN-India Centre (AIC) or ASEAN Studies Centre (ASC) in North East India, completion of Integrated Check Post (ICP) projects in some of the prospective border posts like Moreh in Manipur, along with provisioning the availability of multiple entry visas and e-visas for investors and traders, may go a long way in forging a strong cultural connect.

Debayan Ghatak

Intern, Asia in Global Affairs

References

1. V. Kesavan, “India’s ‘Act East’ policy and regional co-operation,” Observer Research Foundation, February 14, 2020, https://www.orfonline.org/expert-speak/indias-act-east-policy-and-regional-cooperation-61375/
2. Ashok Sajjanhar, “India’s Act East Policy so far and beyond,” Gateway House, May 12, 2016, https://www.gatewayhouse.in/indias-act-east-policy-far-beyond/
3. Prabir De, “India’s Act East policy is slowly becoming Act Indo-Pacific policy under Modi government,” ThePrint, March 27, 2020, https://theprint.in/pageturner/excerpt/india-act-east-policy-is-becoming-act-indo-pacific/389502/