1 Act East policy
Northeast India as a bridgehead to ASEAN
Shristi Pukhrem
The present chapter examines the strategic importance of India’s Northeast region in the country’s Southeast Asia policy, the Act East policy, and the implications of its development for India-ASEAN (Association of South East Asian Nations) relations. While advocating for the development of Northeast India through fostering closer engagement with Southeast Asia on the one hand, and integration with the rest of India on the other, it would be necessary to first lift the region out of the difficult socio-economic situation resulting from prolonged isolation, remoteness and other associated problems. Expanding capacity building and involvement of the local population would be crucial for making Northeast India capable of harnessing the India-ASEAN economic synergies. Accelerated development of the region is an essential requirement to get rid of the present situation where the gains of India-ASEAN integration have simply bypassed the region. Keeping in mind the centrality of the issues and interests of Northeast India is critical in the implementation of the Act East policy.
The issues
Southeast Asia obviously occupies pivotal importance in India’s foreign policy, holding both strategic and economic interests. Myanmar also being a member of the ASEAN, India shares a land border with ASEAN, and a maritime border with Thailand and Malaysia. In this context, the Northeast region of India has become the crucial ‘gateway’ for India to reach out to the ASEAN (see Ministry of External Affairs 2018). India has also realised the ASEAN is the ‘nucleus of a dynamic Southeast Asia’. However, India is equally concerned about China’s growing influence and maritime security in the region (Mattoo 2001). As India’s global trade takes place through the sea routes, India is hoping for ASEAN to play a decisive role in establishing a multilateral security order in the region. Although ASEAN and Japan see India as a potential balancing power vis-a-vis China, India preferred a complementary relationship to confrontation (Mattoo 2001).
The imperative of strategic cooperation between India and ASEAN apart, economic considerations also significantly factored in India’s increased interest in the region. India is keen to harness the potential of cooperation with ASEAN in trade and investment, science and technology, tourism, human resource development and infrastructure. For instance, export-oriented ASEAN countries have significant hardware and manufacturing capabilities. India could exploit the synergies between the hardware capabilities of ASEAN countries and its own software and services capabilities. Both India and ASEAN offer excellent potential for the development of tourism, thereby encouraging people-to-people connectivity across the Northeast region of India (Sailo 2012).
India’s Look East policy,1 now termed the Act East policy with a greater focus on its implementation, seeks to establish closer political relations with ASEAN, evolve strategic links with its member countries and develop strong economic ties with the Asia-Pacific region. The policy also manifests India’s strategy to carve out a place in the Asia-Pacific region. Another interesting dimension of the policy is that of showcasing India’s economic potential for investments and trade. The initial focus on the ASEAN apart, India has opened itself to the eastern neighbours encompassing China, Japan, South Korea, Australia and New Zealand. India has maintained relationships with them bilaterally as well as through different regional frameworks such as the East Asia Summit (EAS), Asia-Europe Meeting (ASEM), Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), Mekong-Ganga Cooperation (MGC) and ASEAN.
Northeast India, which is rightly considered India’s ‘gateway’ to Southeast Asia, is lagging behind mainly due to poor infrastructure and connectivity. The standard development indicators, including road link, banking, access to health care and power consumption are still low. If literacy is high, there is the poor quality of education. The region has been uniquely disadvantaged by the Partition of India into India and Pakistan in 1947 (NEC and MDONER 2008). However, the initiatives like India-Myanmar-Thailand Highway project from Moreh in India to Mae Sot in Thailand via Myanmar; India-ASEAN car rallies from Guwahati to Indonesia in 2004 and from Indonesia to Guwahati in 2012, and upgrading and building of the missing links between Jiribam (India) and Mandalay (Myanmar) towards establishing a rail link between Delhi and Hanoi via Myanmar, Thailand and Cambodia could promote trade and tourism between India and ASEAN.
As the post-Cold War period witnessed a turnaround in global politics, India’s relations with ASEAN have significantly improved over the years. The improvement brought bilateral and multilateral cooperation at a new level. This was also the occasion when India underwent economic reforms and the Look East policy. Subsequently, ASEAN also started looking Westward in the wake of the economic crisis. Thus, a combination of the strategic shift in the foreign policy of India and a change in ASEAN’s perception towards India has led to the fostering of India-ASEAN relations. India also wanted to showcase its economic potentials for investments and trade without exhibiting any hegemonic ambition (see Naidu 2004). It is also envisaged that India’s economic relations with Southeast Asia would help in ushering economic development of Northeast India. Thus, the Look East policy should not necessarily be seen either as a strategy to counterbalance China or to occupy an influential position in Southeast Asia (Mishra 2014).
Strengthening political relations
India relied on a two-fold political and diplomatic strategy in order to build a dialogue partnership with ASEAN and establish bilateral relations with select ASEAN countries. Over time, India has expanded its engagement with ASEAN and others in the Asia-Pacific such as Japan, South Korea, Australia and New Zealand. This reflects not merely an external economic policy, but also a shift in India’s vision of the world towards reaching out to its neighbours in the region. India-ASEAN relations institutionalised with India becoming a sectoral dialogue partner in 1992, a full dialogue partner in 1995 and member of the ASEAN Regional Forum in 1996. By 2002, the relationship had further strengthened after India became a summit-level partner of ASEAN. Since then, the India-ASEAN Summit has been held annually. It is the shared history of peaceful cultural and trade relations and people-to-people contact that have cemented India and ASEAN together. Delivering the Annual Singapore Lecture in Singapore on April 9, 2002, on ‘India’s Perspectives on ASEAN and the Asia-Pacific Region’, the then Indian Prime Minister Atal Bihari Vajpayee emphasised that India’s close civilisational links with Southeast Asia go back over a millennium. Vajpayee pointed out:
Historically, we have been linked by culture and commerce. India, China and regional maritime centres like Singapore played leading roles in the flourishing trade of Asia – shaping the historical development of this region. The cross-fertilization of human experiences and the spiritual interaction between India and East Asia has left an indelible mark on the regional art, architecture, language and culture. It is a fundamental fact of geography that India is in the immediate neighbourhood of ASEAN.
(Ministry of External Affairs 2002)
Geographically, India is in the immediate neighbourhood of ASEAN, sharing land and maritime borders with Myanmar, Thailand and Indonesia. This provides the pragmatic logic of pursuing common goals in the region through sub-regional groupings, e.g. MGC that brings together Cambodia, Laos, Myanmar, Vietnam, Thailand and India; and BIMSTEC that brings together Bangladesh, India, Myanmar, Sri Lanka, Thailand and Nepal.
India has always looked towards Southeast Asia as a region whose history, culture and destiny are linked with that of India. The convergence of strategic, economic and political factors in the region has provided the ambient conditions for India and ASEAN to nurture their relations in the areas of security and development because they are not involved in any territorial disputes or other security-related conflicts. India’s interest in economic and strategic alignment with Southeast Asia, on the one hand, and ASEAN looking westward as evident in their increasing response to Indian initiatives, on the other, have brightened the prospect of strengthening India-ASEAN relations in the new world order.
Strategic engagements
The India-ASEAN relations have expanded to include security and other areas of strategic importance. In pursuit of peace, stability and development in South Asia and Southeast Asia, India acceded to the Treaty of Amity and Cooperation in Southeast Asia (TAC) during the Second ASEAN-India Summit held in Bali, Indonesia in 2003. On the same occasion, ASEAN and India also signed the Joint Declaration for Cooperation to Combat International Terrorism. Further, the ASEAN-India Partnership for Peace, Progress and Shared Prosperity was signed in 2004 during the Third ASEAN-India Summit held in Vientiane, Lao People’s Democratic Republic. The Summit demonstrated the commitment to jointly address the common challenges to political and economic security, including food, human and energy security, cooperation to combat international terrorism and other transnational crimes, synergise the strengths of the two regions as powerful engines of growth, collaborate in areas of disarmament and non-proliferation of weapons of mass destruction, promote cooperation in science and technology and human resource development. All this has paved the way for India and ASEAN to expand the scope of their political and security dialogue and establish a mutually beneficial economic and commercial relationship. Since the region grapples with a bewildering array of security threats and international terrorism, it is important that India and ASEAN strengthen their cooperation, and this, in turn, will help reinforce any efforts to sustain development, peace and security in the region. Besides, India’s involvement in MGC and BIMSTEC would be crucial in promoting regional cooperation.
India supported the notion of ASEAN centrality in evolving ‘regional architecture for peace, stability, development and prosperity’, a high watermark of India’s ASEAN diplomacy. During the ASEAN-India Commemorative Summit held in 2012, the then Indian Prime Minister Manmohan Singh had noted that ‘ASEAN has shown the way for the entire region, building a regional mechanism of cooperation and consensus that has become a great force for peace and prosperity’ (Ministry of External Affairs 2012). The statement is indicative of India’s commitment to strengthen strategic partnership with ASEAN. The commitment to establish the India-ASEAN Free Trade Area (AIFTA) covering trade in goods has demonstrated India’s commitment to fostering cooperation with ASEAN.
Economic cooperation
Realising their economic potential for closer economic ties, India and ASEAN concluded the Framework Agreement on Comprehensive Economic Cooperation in 2002 which envisages the establishment of a free trade area in goods, services and investment over the next decade or so (Gaur 2003). Article 3, titled ‘Trade in Goods’, which came into force in 2011, helps institutionalise the growing economic relationship between the two regions and paves the way for the creation of one of the world’s largest free trade areas. The deepening of ties is reflected by the fact that India’s trade with ASEAN has been rapidly growing (Mohan 2012, 5). The Vision Statement of the ASEAN-India Commemorative Summit held in New Delhi in 2012 stated the commitment of ASEAN and India to their ‘efforts in advancing economic cooperation and engaging the emerging regional economic architecture, including organising multi-sectoral strategic economic dialogues’ (Ministry of External Affairs 2012) towards achieving a target of USD $100 billion for ASEAN-India trade by 2015.
ASEAN and India have also been working on enhancing private sector engagement, aviation and tourism cooperation. In view of the geographical contiguity, cultural affinity and economic dynamism of the two regions, Amita Batra pointed to a high potential of trade between India and ASEAN in the areas of information technology, business process outsourcing, pharmaceuticals, space science and oceanography (Batra 2009a, 1–4). In the context of Northeast India, Batra suggested that greater links with Southeast Asia through the India-ASEAN FTA would help the region. At the same time, Batra argued that in order for the advantages of the potential connectivity offered by the Indian-ASEAN FTA to contribute positively to the growth of Northeast India, it should first be lifted out of its current low economic equilibrium. In other words, ‘prior development’ of the region is a precondition to its ability to exploit the benefits of connectivity with the ASEAN (Batra 2009b, 1–4).
For India, the major gains of the ASEAN-India Free Trade Area are observed to be in terms of enhancement in India’s global image. In essence, the shift in India’s foreign policy vis-à-vis Southeast Asia, as manifests in the Act East policy, has been the significant factor in strengthening its relations with ASEAN in general and also with each constituent countries of ASEAN in particular. On the other hand, ASEAN’s growing interest in India’s Southeast Asia initiative is clearly evident in their commitment to cross-border infrastructure development for regional connectivity and relationships that encompass trade, investment, production and security. However, India and ASEAN have a long way of expanding trade and cooperation in other areas. Besides trade and enhancing physical connectivity, standardised policies and regulations, which would facilitate institutional connectivity and smooth cross-border movement of goods, services and people would be crucial to India-ASEAN economic integration.
Northeast India and Act East policy: challenges and prospects
India’s Northeast region is surrounded by powerful economies, i.e. China and Southeast Asia. The region stands between the rest of India and Southeast Asia via Myanmar. Being a geopolitically important and resource-rich place, the region has tremendous potential to become a commercial hub and international tourist destination (Batra 2009b). The region has vast opportunities for investment and cooperation in sectors like hydropower and oil and natural gas. Therefore, development initiatives for the region and Myanmar are critical for enhancing India-ASEAN connectivity (Kimura and Umezaki 2011). In the given perspective, strategies to connect India with Southeast Asia need to focus on enhancing rail and road links through the Northeast region.
However, the Northeast region continues to be remote due to inadequate (connectivity) infrastructure and lack of economic development. Before India’s Independence, the region was among the most prosperous regions of the country, whereas today the region is lagging behind in most of the important parameters of growth (NEC and MDONER 2008, 6). India’s policymakers have identified the poor state of infrastructure – roads, railways, waterways and power in particular – as the biggest constraint in the development of the eight states of the region – Arunachal Pradesh, Assam, Manipur, Mizoram, Nagaland, Meghalaya, Sikkim and Tripura (NEC and MDONER 2008). Multiple factors like poor road, rail and air connectivity, non-functional inland waterways and blocked sea routes has isolated the region from the rest of India and the world. Former Indian Foreign Secretary, Sujatha Singh, while speaking at a conference on infrastructure and connectivity in Guwahati in 2014 dwelt upon the challenges of developing the region. She noted:
Our Northeast is the gateway to ASEAN and countries of Southeast Asia, but before we can talk of taking advantage of the economic opportunities that are there to be so exploited, we must focus on our ...
