INDIA’S LOOK EAST POLICY

India's Look East Policy - A Review

By C. S. Kuppuswamy

“India’s Look East Policy is not merely an external economic policy, it is also a strategic shift in India’s vision of the world and India’s place in the evolving global economy. Most of all it is about reaching out to our civilisational neighbours in South East Asia and East Asia”-- Prime Minister Dr. Manmohan Singh

Introduction

In many ways the post Cold War external environment of a globalizing world, without rival political alliances, gave India the opportunity to improve relations with all major powers. This was the time (1991), when India launched its Look East Policy. This also coincided with the period when India had launched her economic liberalization reforms.

With India’s obsession towards Pakistan and with its preoccupations with China, the South East Asian region did not figure much in its foreign policy till the early 90s. South East Asia was a growing market with countries like Malaysia, Singapore and Indonesia. China had already entrenched itself deeply in most of these countries over a period of time. Though some analysts pointed out that by launching this policy India was trying to balance China’s influence in this region, India had often reiterated that it was not competing with China in any manner. India had to go beyond the confines of SAARC if it had to reap the benefits out of the economic potential of the South East Asian region and establish itself as a regional power.

India-ASEAN Relations

India’s attitude towards ASEAN during its early years was ambivalent but not hostile. The Indian leadership viewed ASEAN as an American “imperialist surrogate” while ASEAN dubbed India as the “surrogate of the Soviet Union”. The signing of the Friendship Treaty with the Soviets, India’s stand on Afghanistan and India’s recognition of the Hang Samarin Government in 1981—all these led to estrangement between India and ASEAN India’s decision not participate as a dialogue partner in 1980 was a further setback. The expansion of the Indian Navy in the early 1990s and the military assistance provided to Maldives had led to adverse propaganda in Australia and ASEAN. It is only after some Joint Naval exercises with the South East Asian nations and the collapse of the Soviet Republic, India’s efforts to improve relations with ASEAN gained momentum.

India-ASEAN relations have deepened and intensified significantly in recent years. India became a sectoral dialogue partner of ASEAN in 1992. In 1995 this was upgraded to full dialogue partnership. It participated in the ASEAN Ministerial Meeting (AMM), the Post Ministerial Conference (PMC) and the ASEAN Regional Forum (ARF) in July 1996. Since 2002, India has annual summits with ASEAN along with China, Japan and Republic of Korea. These political level interactions are further strengthened through the Senior Officials’ meetings, as also specialized working groups in functional areas.

India-ASEAN functional cooperation includes cooperation in sectors such as, Science & Technology, Human Resources Development, Health and Pharmaceuticals, Space Sciences, Agriculture, Information & Communication Technology, Transport and Infrastructure, Tourism and Culture and Small and Medium Enterprises etc.

Proposed New Measures:

Realizing India-ASEAN trade target of US $ 50 billion by 2010.
Simplification of visa regime for business persons travelling from India to ASEAN and vice-versa
Launching of an India-ASEAN Health care initiative with a focus to provide basic drugs at low cost,
Setting up of an India-ASEAN Green Fund for undertaking pilot projects to tackle issues associated with Climate Change
An expanded Open Skies Policy with ASEAN and
A target of 1 million tourists to India from ASEAN region by the year 2010.

Political and Security Issues –ASEAN has expressed desirability to work together to fight terrorism and transnational crime, combating corruption and promoting good governance and the protection of human rights as well as cooperation in forums such as ARF and the MGC.

Free Trade Agreement (FTA)—The crowning glory of the Look East Policy is the signing of the India-ASEAN Free Trade Agreement on 13 August 2009 at Bangkok. The agreement was only for trade-in-goods and did not include software and information technology. Negotiations for agreements on services and investment are in progress. Two-way trade between India and ASEAN was $ 47 billion in 2008 and both parties expect a $ 10 billion increase even in the first year. The FTA is part of the Framework Agreement on Comprehensive Cooperation signed with ASEAN in 2003. The FTA is significant for the reason that it is the first multilateral trade agreement entered into by India.

ASEAN-India Summits—The inaugural ASEAN-India Summit was held on 05 November 2002 at Phnom Penh (Cambodia). The 7^th ASEAN-India Summit was held at Thailand on 24 October 2009. During these 7 years India had proposed a number of initiatives for “enhancing connectivity and empowering peoples” in areas such as greater economic integration, people to people contacts, agriculture, human resource development, education, science and technology and information and communication technology. The India-ASEAN Business Summits are also held along with these summits where business delegates meet and interact to enhance the trade relations.

India and ASEAN Regional Forum (ARF)

India became a member of the ARF in 1996. India’s participation in the ARF demonstrates its increasing engagement in the Asia-Pacific region, both in the politico-security and economic spheres and underlines its commitment to objective of sustaining regional peace and stability. India has hosted several activities such as peacekeeping, maritime security and cyber security.

East Asia Summit (EAS)

India, being an Asian nation and with its growing economic potential, deserves its place on its own merit. However some of the ASEAN members were reluctant to include India but later acceded more as a counterweight to China’s increasing influence in the region. India had played its cards well to get into this grouping at the outset (unlike the case with ASEAN).

Prime Minister Manmohan Singh who attended the 4^th EAS summit at Thailand in October 2009 remarked that the launching of the EAS was an act of foresight. He recalled that today that six of the 20 members of the G-20 belong to the EAS. While reiterating that India is playing its part in the economic integration of the EAS region, he promised a contribution of $ 1 million over a period of 10 years for the Economic Research Institute for ASEAN and East Asia (ERIA) for enlarging the activities of ERIA. India proposal for establishment of the Nalanda University in Bihar is under active consideration of the EAS.

Bay of Bengal Initiative for Multi Sectoral Technical Cooperation (BIMSTEC)

India has taken a leading role in this grouping. The second BIMSTEC Summit was held at New Delhi in November 2008. India has set up a Tsunami Warning Centre to extend information exchange and data sharing arrangements with BIMSTEC countries. In addition to the 300 scholarships offered under the Indian Technical and Economic cooperation Progamme (ITEC) 150 more offered to BIMSTEC countries (during the summit in Delhi) of which a report indicates that 80% have been utilized. Negotiations are underway for a BIMSTEC Free Trade Agreement in goods. The last BIMSTEC ministerial meeting held in Myanmar in December 2009 was attended by External Affairs Minister S.M.Krishna, where Climate Change was identified as one more area of cooperation

Mekong Ganga Cooperation.(MGC)

It is important to note that this concept was floated by India. China had criticized this initiative as having been to designed to counter-balance the influence of China in the region, which is a riparian Mekong River country and which has not been included in this sub-grouping. Since January 2007 India holds the Chair of the MGC.

When completed the Asian highway project is expected to link up Singapore with New Delhi in South Asia via Kuala Lumpur, Ho Chin Minh city, Phnom Penh, Bangkok, Vientiane, Chiang Mai, Yangon, Mandalay, Kalemyo, Tamu, Dhaka and Calcutta. India has already taken the first step in this direction and has built the road linking Tamu (Manipur) to Kalemyo, a key communication junction in the center of Myanmar.

Bilateral Relations

India has strengthened its bilateral relations with all the South East Asian nations in the last two decades since launching of the Look East Policy. High level visits of heads of states from most of these nations have taken place. India has entered into a few bilateral Free Trade Agreements (Thailand) and economic cooperation agreements (Indonesia and Singapore). The high point of India’s relations with Malaysia is the defence cooperation which began in 1993 and has developed over the years with annual meeting of the defence secretaries, military training and supply of defence equipment. Special attention is being paid to the three economically under developed countries, Cambodia, Laos and Vietnam, where there is enough scope and opportunity for India to extend its influence. Indonesia and Singapore has helped India to get into the East Asia Summit despite objections from some other ASEAN members and China. Of all the South East Asian nations, Myanmar has a special place from India’s strategic and security perspective and hence has been dealt with separately in this paper.

Myanmar

Myanmar is a lynch pin for this policy as it is the land bridge between India and ASEAN.

While the main thrust of the Look East Policy has been economic and integration and energy security with the nations of South East Asia, in the case of Myanmar it is also of strategic importance and security of our North East. India has a land border of 1640 Km and a coast line of 1930 Km to the Andaman Sea and the Bay of Bengal.

It was in 1993 when India reversed its stand and started engaging the military regime. Since then our relations with Myanmar has been in the upswing and had paid dividends (though some analysts consider that it is not commensurate with the effort).

Major Indian Projects in Myanmar

Construction, upgrading land resurfacing of the 160 Km long Tamu-Kalewa-Kalemyo road, upgradation of Rhi-Tidim and Rhi-Falam roads.
Kaladan Multi-modal Transport project
ADSL project for High Speed Data Link in 32 Myanmar Cities has been completed by TCIL
ISRO assisted Data Processing centre in Yangon
A heavy truck assembly of TATAs.
ONGC Videsh Limited, GAIL and ESSAR have stakes in the energy sector in Myanmar

In addition India has exchanged high level visits with Myanmar. India has supplied defence equipment and port calls by the Indian Navy Ships have been made. In January 2006, a Myanmar Navy ship participated in “Milan” at Port Blair. This was a historic first ever visit of a Myanmar warship to any foreign port. Gen Deepak Kapoor Chief of Army Staff visited Myanmar in October 2009 and an Indian delegation led by the Home Secretary which included senior officials from Army and Military Intelligence visited Myanmar in January 2010. Myanmar is learnt to have agreed to launch “coordinated operations” to flush out NE militants from its territory—quite similar to what Bhutan did against ULFA in 2003. Bilateral Trade has expanded significantly from US $ 12.4 million in 1980-81 to US $ 951.14 million in 2008-09.

Myanmar has been given the status of observer in SAARC in August 2008

Look-East and the North-East

The North Eastern States of India are often described as land locked. They are joined to the rest of India by a narrow land corridor that skirts the north of Bangladesh. This land corridor is only 21 to 40 Km in width and is known as the Chicken’s Neck. This has been a serious impediment for the development of the region, which has lagged behind the rest of the country in terms of infrastructure and industrial development. With the release of the document “North Eastern Region Vision 2020” by the Prime Minister in July 2008 a serious effort has been made for socio-economic development of this region to match with the objectives of the Look East Policy.

Several measures have been undertaken under the aegis of the Look East policy to uplift North East India such as the “Asian Highway”, “Asian Railway link” and “Natural Gas pipeline”. The Kaladan Multi-modal Transit Transport facility is aimed at establishing connectivity between Indian ports and Sittwe port in Myanmar through riverine transport and road links in Mizoram. With the Ganga Mekong initiative there is potential for direct flights between Guwhati -Ho-Chi Minh city – Imphal – Hanoi. .

This document (Vision 2020) admits that the Look East Policy has failed to uplift the North East in the last fifteen years or so as most of the goods from ASEAN is sent through the sea route as the land route is thought highly unsafe for reasons such as lack of infrastructure and insurgency.

The China Factor

In the cold war era, South East Asian nations perceived China as dangerous because of its military expansionist scheme in Asia. While now the “peaceful rise” of China is being considered more of an opportunity despite the challenges.

China is virtually dominating the South East Asian region. The ASEAN-China Free Trade Area created by an accord in 2004 has come into effect from January 2010. This covers nearly 1.9 billion people. In terms of economic value this is the third largest regional agreement, after only the EU and the NAFTA.

“A new talking point in East Asia is that of the multi-laterisation or, more precisely, the likely enlargement of the Chiang Mai Initiative (CMI) later this year. The CMI is basically a currency pool of the ASEAN+3 countries (China, Japan and South Korea).The move was a direct response to the recent outbreak of the US-induced global and financial economic crisis, which has not fully blown away as now” (P.S. Suryanarayana-Frontline January 29, 2010).

China is predicted to overtake Japan as the world’s second largest economy some time in 2010.

India must be aware of the fact that it has not been invited to the EAS because of its rising economic potential alone but more as a balancing force to offset the China factor. Prime Minister Manmohan Singh has repeatedly mentioned that in a global environment, India is not afraid of competition and it can complement rather than compete in the EAS.

Expansion of the Look East Policy.

The Look East Policy was initially directed towards the SEA nations. It is significant to note that India has since included China, Japan, South Korea and other Asia Pacific nations in the gamut of this policy.

The policy which began largely as an economic initiative has gained political, military and regional dimensions.

India’s best efforts to improve relations with China have not been reciprocated as China is considering itself more equal and continues with its permanent nagging on the two main irritants—the border issue and Tibet--and on various other issues (such as Dalai Lama’s visit to Arunachal, India’s war doctrine or movement of troops or aircrafts in the North East).

With Japan, we have had high level visits of Prime Ministers Koizumi, Shinzo Abe and Hatoyama in 2005, 2007 and 2009 respectively. PM Manmohan Singh had visited Japan in 2006. We have some strategic partnership arrangements, economic interaction, Defence Policy dialogue and have conducted some joint naval exercises. Since 2003, India has replaced China as the top recipient nation of yen credits. Japan was keen to have India, Australia and New Zealand join the EAS.

The entering of The Comprehensive Economic Partnership Agreement (CEPA) with South Korea (which took effect form January 2010) and inviting the President Lee Myung Bak as chief guest for the Republic Day function this year (2010) are noteworthy in this regard. Currently there are about 9000 Koreans staying in India with about 7000 Indians living in Korea.

Highlights and Shortcomings of the Look East Policy

Highlights

Organizing “Milan”—a congregation of navies organized by the Indian Navy biennially since 1995 in Port Blair involving social and professional interactions, including combined exercises. In 2008 11 Navies including Australia participated.

Becoming a member of the ASEAN Regional Forum(ARF)—1996.
Completion of the 160 Km India-Myanmar Friendship road from Tamu to Kalemyo to Kaletwa built by the Border Roads Organisation—2001
Becoming a summit level partner of ASEAN—2002.
Entering into a Framework Agreement on Comprehensive Economic Cooperation (for establishing a FTA in a time frame of 10 years)—2003. Similar FTAs have been entered into with some ASEAN nations independently
Acceding to The Treaty of Amity and Cooperation on which ASEAN was formed in (1967)—2003.
Becoming a founding member of EAS—2005.
South East Asia was the focus in the India International Trade Fair (IITF) in 2005 which happened to be the Silver Jubilee of the fair. Companies from Indonesia, Malaysia, Vietnam and Thailand took part in the fair.
Under the open skies policy, today, there are over 215 direct flights every week between India and Singapore, 115 with Thailand and 50 with Malaysia.
Finalising the Kaladan Multimodal Transport project in 2009 especially in the context of Bangladesh being reluctant to allow transit facilities. By this the port of Sittwe in Myanmar (250 Km from Mizoram border)will be connected to the Indian ports and Kaletwa (Myanmar)will be linked with the National Highway 54 at Nalkawn in Mizoram
Appointing an Ambassador to ASEAN in order to accelerate the growth in the bilateral relations in all spheres of activity

Shortcomings

India still remains outside the Asia Pacific Economic Cooperation (APEC) forum
India has entered into a number of pacts, agreements and FTAs with nations of ASEAN but its record for implementation of such accords has been poor.. The Indian industry has doubts about its own competitive efficiency or it does not want competition at home or it is scared of cheaper exports to India from these countries.
India lags behind China and Japan in almost all spheres of Pan East Asian cooperation, East Asian observers reckon that India has so far appeared less proactive than China on some critical issues.
Some analysts feel that India’s Look East Policy lacks a strategic vision despite seeking defense cooperation with some ASEAN nations (Myanmar, Indonesia and Vietnam) and securing a role for joint patrolling in the Malacca Straits. India does not take an assertive role perhaps due to it limited military capability
There are some domestic political compulsions which impinge on the desired reforms and the struggle the liberalization process is undergoing in the “minds of our people”. India has come under harsh criticism for the big negative items list and the delay of over six years in finalizing the ASEAN-India FTA.

Conclusion

India’s objectives in Look East Policy can be furthered through areas—education (human resources development), democracy and culture—where it has a comparative advantage over Asian countries. In this context the Nalanda project which envisages the setting up of an international university is noteworthy.

India has a lead in Information Technology. Many South East Asians are not only interested in our IITs and IIMs but also want campuses opened in places like Kuala Lumpur and Jakarta.

Tourism is an area where much can be done to reverse the trend of more Indians going to South East Asia (Singapore) for shopping. Places of Buddhist interest like, Bodh Gaya, Sarnath and Nalanda and places of Muslim interest like Taj Mahal, Fatehpur Sikri Ajmer, and Hyderabad have to be suitably promoted for establishing people to people contacts.

At the strategic level, India’s Look East policy envisages the ASEAN states and Japan as key partners in East Asia. Ties with South Korea are also strengthening. With India-US relations also expanding in scope and content, India can become a stabilizing and balancing force in this region.

India’s inclusion ab initio into the Group of Twenty Economies (G-20) has boosted its image in this region. Six of the 20 (Australia, China, Japan, India, Indonesia and South Korea) are from East Asia.

The crux is that this Look East policy should reinforce and demonstrate India’s commitment to this region which accounts for about one-third of India’s trade. It should also be made clear that this commitment will not be influenced in any way by the improving relations between India and the US and EU.