Several changes were made in the foreign policy of India in 2014 when the new government was formed. Act East Policy was one of them. Since its enactment, it has come a long way in improving India’s ties with various nations in East and Southeast Asia and Indo-Pacific. However, since its enforcement, circumstances have changed. China’s influence is challenged by various aspects like the trade war, regional tensions in China, an increase in protectionist policies, etc. India needs to make use of this situation to enhance the Act East Policy to its advantage to counter China and improve its economy through trade with East and Southeast Asian nations.
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What is Act East Policy?
- In 2014, the Modi Government had upgraded the Look East Policy and had re-named it as “Act East” policy.
- The Act East Policy was launched at the East Asia Summit in Myanmar in November 2014.
Why do we need Act East Policy?
- India and Southeast Asian countries have several common strategic and economic interests.
- This has led to the shift from the “Look East” policy to “Act East” policy by the Indian government.
- This is also done to deepen India’s engagement with Southeast Asia to counter a belligerent China.
How did it all begin?
- Ever since the Sino-Indian war of 1962, China and India have been strategic competitors in South and East Asia.
- China has cultivated a close commercial and military relationship with India’s neighbour Pakistan.
- Since 1962, the India-China relations are characterized by strategic and economic competition in the East and South Asia.
- After Deng Xiaoping’s rise to power in China in1979 and the subsequent economic reforms in China, it (China) had begun reducing threats of expansionism and in turn, had increased trade and economic relations with Asian nations.
- China was proactively present in Southeast Asian nations during the Cold War era while India was having a relatively hesitant relationship with many states in Southeast Asia. Thus, for India, the diplomatic relationship with Southeast Asian nations was of relatively low priority.
- India’s Look East policy was developed and enacted during the 1990s.
- Along with economic liberalisation and moving away from Cold War-era policies, India’s strategy focused on forging close economic and commercial ties with the East Asian nations.
- India’s strategy also focused on increasing strategic and security cooperation along with the historical, ideological and cultural ties with these nations.
- India sought to create and expand regional markets for trade, investment, and industrial development while also enhancing the strategic and military cooperation with the East Asian nations.
- For a better and enhanced engagement with the East Asian nations to counter China’s increasing economic, commercial and military presence in the Indo-Pacific, India had upgraded and renamed it as the “Act East” policy.
What are the objectives of Act East Policy?
The objectives of Act East Policy are as follows:
- Promotion of economic cooperation, cultural ties, and development of a strategic relationship with countries in the Asian-Pacific region through continuous engagements at the regional, bilateral and multilateral levels.
- To provide enhanced connectivity to states of the North Eastern Region with the neighbouring countries.
- Increase in India’s presence in the ASEAN region.
What is India’s strategy in this regard?
- North East of India has been prioritized in the Act East Policy (AEP).
- AEP provides an interface between North East India and the ASEAN nations.
- Various plans at the bilateral and regional levels include the steady efforts to develop and strengthen connectivity of northeast India with the ASEAN region through trade, culture, people-people contacts and physical infrastructure like roads, airports, telecommunication, power, etc.
- Some of the major projects include Kaladan Multi-modal Transit Transport Project, India-Myanmar-Thailand Trilateral Highway project, Rhi-Tiddim Road project, Border Haats, etc.
- The ASEAN-India Plan of Action for the period of 2016-20 has been adopted in August 2015.
- It identifies concrete initiatives and areas of cooperation along with three pillars of political-security, economic and socio-cultural cooperation.
- India continues with the stepped up efforts to forge a closer partnership with regional and multilateral organisations like ASEAN, BIMSTEC, Asia Cooperation Dialogue, Mekong-Ganga Cooperation, Indian-Ocean Rim Association, East Asia Summit, and ASEAN Regional Forum.
- On the Civilizational front, Buddhist and Hindu links are energised to develop new contacts and connectivity between people.
What are the outcomes of upgrading Look East Policy?
- Started with great optimism in 2014, AEP had indeed gained new momentum.
- Since then, ASEAN-India engagements have become deeper and new dimensions have been added to the relationship.
- India has developed strong bilateral relations with countries like Bangladesh, Myanmar, Mauritius, Sri Lanka, Singapore, etc.
- It is also steering a number of sub-regional programmes and projects such as BBIN (Bangladesh, Bhutan, India, and Nepal) initiative, trilateral highway, etc.
- It is also contributing to the success of several regional initiatives such as ASEAN, EAS, BIMSTEC, IORA, RCEP
- Alongside AEP, the East Asian nations are highly influenced by the BRI, lowering the impact of India’s presence in the region.
- Under the AEP, the India-Japan strategic partnership is at an all-time high. It even underscores the importance of Indo-Pacific cooperation.
- India believes in an Indo-Pacific that is free, open and inclusive, and the one that is founded upon a cooperative and collaborative rule-based order.
- ASEAN is at the centre of India’s AEP and is on par with the contemporary characteristics of the Indo-Pacific at the regional level.
- Furthermore, India is also keeping its stance on Indo-Pacific at the centre of its engagement with South, Southeast, and East Asia.
- In 2018, during his address at the Shangri La Dialogue in Singapore, PM Narendra Modi had espoused a free, open, prosperous and inclusive Indo-Pacific region.
- He had also called for common commitment, based on the shared values and principles, to promote a rules-based order in the Indo-Pacific.
- Thus, gradually, Act “East” is getting transformed into Act “Indo-Pacific”.
- The Act East policy offers many opportunities to India.
- However, the said region is also rife with threats and challenges.
- Today, India and ASEAN countries are not only facing challenges in the economic areas due to the rise of isolationism and China but are also facing security and environmental challenges.
- These challenges are new and were not present when AEP was first formulated.
- For example, the global economy is facing the heat due to the US-China trade war, which is escalating instead of cooling down.
- China’s threat in the South China Sea is making matters even more complicated for the ASEAN nations and India.
- Besides the obvious challenges, there are also non-traditional security threats like cybersecurity, terrorism, etc.
- There is, therefore, a natural call to India from Southeast and East Asia.
- However, India is not on par with China either from a security perspective or from an economic perspective.
- Thus, the South and Southeast Asian regions are inclining towards China for the economic and security enhancement.
- Therefore, the success of AEP is turning into something of a question mark because India and ASEAN continue to be plagued by a reputation for shying away from forging deeper ties.
- The lack of a formal document elucidating exactly what ‘Act East’ entails has also made judging of its success a challenge.
- However, for the sake of security and sovereignty, India and ASEAN nations need to move beyond the touch-and-go diplomacy that has characterized the relations so far.
What can be the way forward?
Several measures can be taken for enhancing the AEP. They are as follows:
- Speedy completion of proposed projects: First and foremost, completion of the task promised in the Delhi Declaration 2018 is necessary. For example, completion of digital connectivity projects in Cambodia, Laos, Myanmar, and Vietnam. Completion of the Trilateral Highways, resuming the replacement of 69 bridges along the Trilateral Highway and negotiate the Trilateral Motor Vehicle Agreement.
- Enhancing the People-to-people contacts: Continuation of the high impact projects like fellowship for integrated PhD programmes to ASEAN scholars, setting up of a network of universities to encourage greater inter-university exchanges; celebrating the year 2019 as ASEAN-India year of tourism, etc., can greatly enhance the people-to-people relations between India and ASEAN.
- Cooperative Federalism: The Indian government, under PM’s Sabka Sath, Sabka Vikas, Sabka Vishwas, must empower the north-eastern states. Many of these states have taken Act East move, but the progress has been limited. To guide the states in implementing the AEP, there is a need for special strategy; maybe setting up of a Northeast branch of NITI Aayog may help to bridge the gap between the Centre and States while implementing the AEP. The Act East, through the Northeast, can flourish. The Centre and States can cooperate to enhance the connectivity in Northeast India.
- Focus on BIMSTEC: BIMSTEC is a natural connector between South and South East Asia. Completion of the commitments taken at the fourth BIMSTEC Summit that was held in Kathmandu in 2018 can greatly enhance India’s relationship with other member nations. While the BIMSTEC connectivity master plan is ready, the member countries must enhance the negotiation process to conclude BIMSTEC MVA, BIMSTEC Coastal Shipping Agreement, and BIMSTEC TFA. At the same time, injecting the promised capital and resources can greatly strengthen the BIMSTEC Secretariat in Dhaka.
- Engaging SMEs in India-ASEAN relations: SMEs are assets to the Indian economy. In the earlier period, there was a limited effort to engage the SMEs in India-ASEAN activities. Now the government may ensure a special focus on SMEs as they can build effective business networks across the borders. The SME related projects can improve the trade and investment ties while also integrating India’s producers and manufacturers in regional value chains. Many industries in Northeast and eastern Indian states are unaware of the potential of the ASEAN market, both for the finished and intermediate goods and services.
- Coordination within Indian Government: The External Affairs ministry depends on the Ministry of Finance (MoF) for funding the AEP while the latter depends on the PMO for political and statutory directions. Also, the bureaucratic processes often act as hurdles, delaying the projects and funding. Simplifying these bureaucratic procedures and enhancing the coordination between various ministries can increase the speed of the projects and commitments made by India.
- Immediate implementation of easily achievable goals: Indian states are rich in culture. The tourism industry is the most immediate ‘money-making’ opportunity, which also has the potential to improve the connectivity between India and Southeast Asia. Air Connectivity between Northeast India and Southeast Asia is necessary to unlock the opportunities of the AEP. Also, the up-gradation of the domestic airports into international airports in the Northeast and other parts of India can be helpful in the connectivity process. This can also promote health tourism in the Northeast just like how Imphal’s Shija Hospital became a favourite destination of the Myanmar people for a health check-up.
- Expansion of outreach: India must take measures to add Bangladesh and Sri Lanka in the AEP. A prosperous Bangladesh offers opportunities for India’s Eastern and Northeastern states. The government can consider hosting an annual dialogue on AEP involving neighbouring countries and Indian states can provide a positive impact on India’s economy.
- Strengthening the borders: Enhancing India’s border infrastructure, logistics, and last-mile connectivity can ensure a secure border in the Northeast. Major border posts need to be operational 24×7 for it to be secured. Developed border infrastructure reinforces the country’s security.
- Dealing with informal trade at the border: However, some of the border posts like Moreh in Manipur are not developed due to the border disputes or lack of availability of adequate land, had resulted in the rampant rise of informal trade. Increasing the duty structure is not the right way to cease informal trade when the border is weak and porous. Innovative solutions are necessary for stopping the illegal trade at these borders. Additionally, building smart cities in Dawki (Meghalaya) and Moreh can enhance economic activities in the region. Greater involvement of youth through skill development programmes and increased employment opportunities can bring trust and confidence among the locals.
- Faster cross border engagement in the North East can wipe out insurgency activities, which is the main constraint of trade and investment. States must especially encourage start-ups which are exporting processed food, organic fruits and vegetables, flowers and high-end fashion products through these porous borders as East Asia has a favourable market for it.
- The Multiple Entry Visa should be initiated to increase the investors and traders coming from Southeast and East Asia. While the airports accept E-Visa, the same is not allowed at the border posts. The Ministry of Home Affairs shall allow E-Visa at least at the Moreh border at the starting stage.
Currently, the world is faced with numerous problems and the time is ripe for India to establish a strong economic partnership with Southeast and East Asia and other Indo-Pacific countries. India must reinforce AEP as it would not only increase its presence in the Southeast and Eastern Asia but also gradually remove economic isolation of India’s East and Northeast regions. It should not be forgotten, however, that nothing much will be achievable without the institutional foundations, a set of rules, and finally, the confidence of countries and states in the whole of the AEP. Thus, the government should take all possible steps to promote AEP for economic development as well as for enhancing its influence in international politics.