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India’s Act East policy: Need to rediscover Southeast Asia through better connectivity and cooperation
Updated:Feb 14, 2017
 
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 by Dr Bawa Singh
 
India and Southeast Asia have enjoyed historical, civilisational and geo-cultural relations since time immemorial. However, their coming under colonial rule (1600-1940s) and replacement of the ‘Silk Route to Sea Route’ rendered the multi-faceted relations dormant between both the regions.
 
Since the end of the Cold War and disintegration of the USSR, internal security and economic dynamics have impelled India to rediscover Southeast Asia through reorienting and refashioning its foreign policy, manifested in the Look East Policy (LEP) and Act East Policy (AEP).
 
LEP was launched in 1991, under the stewardship of then Prime Minister P.V. Narasimha Rao (1991–1996), to heighten multilateral relations. It was metamorphosed into the Act East Policy (AEP) in 2014 by the incumbent government under the stewardship of Prime Minister Narendra Modi.
 
With the establishment of colonialism in Asia during 1600 AD, both regions had drifted from each other in line with the vested interests of their colonial masters. However, soon after the independence of colonies in the Asian and African continents, then Indian PM Jawaharlal Nehru (1947-1964) tried to reconnect and rediscover the region.
 
Nehru dreamt of pan-Asian unity through the principles of peace, stability, prosperity, end of colonialism, liberalism and freedom. He made several efforts in this direction. The organisation of the Asian Relations Conference in New Delhi (March-April 1947), the Asian-African Conference (1955) attended by 29 countries and the Non-Aligned Movement played a significant role in creating Afro-Asian peace, prosperity, and unity.
 
However, the atmosphere of cordiality between the two regions lost its tempo due to the Cold War geopolitical dynamics. These dynamics include India’s humiliating defeat in the India-China War (1962), the Indo-Soviet Friendship Treaty (1971), Indian nuclear test (1974), recognition of Vietnamese-installed Kampuchean regime of Heng Samrin (1979-1981), and the establishment of the Joint Naval Command in the Andaman and Nicobar Islands.
 
Moreover, some of the Southeast Asian countries had aligned themselves with the US while India joined the USSR bloc. Hence, both India and Southeast Asia moved in diametrically opposite directions and lost the sense of geocultural and civilisational commonalities and were cut off from each other by these moves and counter-moves.   
 
LEP is a by-product of geo-economic and geopolitical transformations that have taken place at three levels. The first is the individual level, which included the worsening Indian economy due to rising inflation, government subsidies, high-interest rates, and a concomitant decline in overseas remittances.
 
From a security perspective, India has been facing a serious challenge of terrorism, which led to a substantial rise in non-productive expenditure. At the bilateral and regional level, Pakistan and China have been posing serious problems for Indian security. China, being a competitor in South and Southeast Asia, has been expanding its economic and strategic forays in India's neighbourhood and extended neighbourhood.
 
At the global level, transformations like the end of the Cold War, the disintegration of the USSR, unification of Germany, and regional economic integration -- ASEAN, EU, AU, NAFTA, AFTA -- compelled India to reorient and refashion its policy towards Southeast Asia, which was manifested in the Look East Policy.
 
The Look East Policy was launched and developed under the visionary leadership of Prime Minister Narasimha Rao and pursued vigorously by successive governments, including of Prime Minister Manmohan Singh (2004-14).
 
It is a multi-pronged and multi-faceted policy that has changed India’s vision of the world. India has been focusing on heightening economic ties, expanding strategic and security cooperation and emphasis on the rediscovering of historical, cultural and ideological links through soft diplomacy. The most important outcome of this policy was the initiation of economic liberalisation and turning from non-alignment to realignment for exploring partners in the changing geopolitical and geo-economic landscape. Therefore, it is perceived as a paradigmatic shift in Indian foreign policy.
 
The incumbent Narendra Modi government took over in 2014 and, during the India-ASEAN Summit 2014, it rechristened the Look East Policy into the Act East Policy with broader scope. The primary objectives of the Act East Policy included the three Cs -- Commerce, Connectivity and Culture.
 
The first C is commerce. Under this, it has been decided to heighten and expand economic cooperation.  In the 1990s, trade ties between both the regions stood at less than $1 billion. The ASEAN–India Free Trade Area (AIFTA) was signed in 2003. The FTA on trade in goods and services was approved in 2012. Consequently, bilateral trade has increased exponentially to $80 billion. The two-way investments have been growing and from India investment in ASEAN amounted to $32.4 billion during the last decade.
 
The second C stands for connectivity. The various proposals at the bilateral and regional levels under the Act East Policy have been visualised to develop and expand the connectivity of India’s Northeast with the ASEAN region. People-to-people contacts, culture, trade and physical infrastructure (road, airport, telecommunication, power etc.) are identified areas of cooperation between both the regions. It has been decided to rejuvenate the old connectivity projects such as Kaladan Multi-modal Transit Transport Project, the India-Myanmar-Thailand Trilateral Highway Project, Rhi-Tiddim Road Project, and Border Haats launched under the LEP.
 
The third C stands for culture and envisages the rediscovering of the Indo-Pacific region through soft power diplomacy.
 
The LEP and AEP have not remained as one-way policies. The ASEAN has actively reciprocated to these policies and re-engaged India through many institutions such as the Sectoral Dialogue Partnership (1992), the Full Dialogue Partnership (1995), the Summit-level Partnership (2002), ASEAN-India Trade in Goods (TIG) Agreement (2010), and FTAs in services and investments (2012). 
 
Also, in the security domain, India has been admitted into ASEAN-led ASEAN Regional Forum (1996), the East Asian Summit (1995) and the ASEAN Defence Ministers’ Meeting (ADMM) Plus. During the 20th Anniversary of ASEAN-India Dialogue Relations commemoration, the India and ASEAN partnership was elevated to a strategic partnership.
 
By these reciprocations, relations between both the regions have been growing exponentially in multi-sectors such as political, economic, security, science and technology, agriculture, education and the like.  
 
Despite having achieved considerable successes in terms of trade, foreign direct investment (FDI), defence and maritime cooperation etc., the LEP, rechristened as Act Eat Policy, still has not been able to realise its full potential. This argument can be corroborated when India is compared with other ASEAN partners from the economic cooperation point of view.
 
Comparatively, India’s trade and FDI with ASEAN stand at the lowest level. India’s contribution to the total trade of ASEAN amounted to a meagre 2.4 per cent while other partners have been contributing considerably -- China 15.2 per cent, Japan 10.5 per cent, and the US 9.3 per cent. It shows India at the lowest ebb in this respect.
 
For the given geopolitical and geostrategic interests in Southeast Asia, the South China Sea Dispute is a major challenge for AEP. It poses a major challenge for connectivity between the two regions. The North-eastern region of India is adversely affected with terrorism and underdevelopment, and lacks basic infrastructure. Bangladesh, which could become a link connecting both the regions, is also sailing in the same boat. Several connectivity projects have been signed between both the regions but they have not been moving at the required pace.
 
A sizeable 10 per cent population of the Southeast Asian countries are of Indian origin. However, no efforts have been made to reconnect with them for the purpose of FDI. Some of these Indian ethnic communities face several challenges in the Southeast Asian region.
 
These challenges, perceived to be hindrances for AEP, need to be sorted out by India to enable the bilateral relationship realise its full potential.
 
With the end of the Cold War, regionalisation and its internal problems, India was obliged to reorient and refashion its foreign policy vis-à-vis Southeast Asia. The policy has paid rich dividends in terms of trade, investment, maritime and strategic cooperation and connectivity. Still, the policy has been facing challenges such as the expanding Chinese strategic footholds, South China Sea dispute, trade imbalance, and problems that Indian minorities face in some of the Southeast countries, among others.
 
In this backdrop, India should translate the proposed connectivity projects into reality, extend cooperation to the ASEAN countries to sort out the South China Sea dispute and take care of the Indian minorities there in order to make its Act East Policy successful and to rediscover the Southeast Asian region in the true sense.
 
 
(Dr. Bawa Singh teaches at Centre for South and Central Asian Studies, School of Global Relations, Central University of Punjab, Bathinda, India)
 
 
 
 
 
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