East by Southeast: Three challenges for India's 'Act East' policy

Going forward India may find that its economic interests may collide with its political interests even as China's presence will continue to cast a long shadow on India's relations with ASEAN

India will play host to all ten ASEAN heads of state as chief guests at the Republic Day parade in New Delhi. India has had old, civilizational ties with Southeast Asia but the present Act East policy of the Indian government follows in the footsteps of the Look East policy of the early 1990s. In this Business Standard Special, Rohan Mukherjee takes a look at the challenges India faces as China asserts itself more strongly in Asia and beyond.

In the spring of 1947, as India prepared for independence, the interim government hosted an unprecedented gathering in New Delhi: the Asian Relations Conference. Jawaharlal Nehru, soon to be India’s first prime minister, delivered a welcome address to over 200 delegates from 30 Asian nations and a handful of observer countries. India, Nehru reminded his audience, was “the natural centre and focal point of the many forces at work in Asia.” The argument was both geographic and cultural: India was “the meeting point of Western and Northern and Eastern and South-East Asia,” and “streams of culture” had both flowed to India and from India to the rest of Asia, influencing “vast numbers of people.”

Seventy years later, Prime Minister Narendra Modi’s visit to the ASEAN-India Summit in Manila last November witnessed the makings of another unprecedented event: the attendance of all ten ASEAN heads of state as chief guests at India’s Republic Day parade this week. Like Nehru, in his speech, Modi invoked the history of cultural exchange between India and Southeast Asia, citing the Ramayana as “a living shared heritage” that depicts “the way historically the people of India and ASEAN have been bound together.” He also emphasized ASEAN’s “centrality in the regional security architecture of the Indo-Pacific region,” underlining the importance of geography, which Nehru in 1947 had called “the compelling factor” in India’s relations with Asia.

Much has changed in the world and in India’s relations with Southeast Asia between then and now. New Delhi has gone from championing decolonization and non-alignment in the region, to outright distrust of ASEAN itself during the height of the Cold War, to a newfound interest via Prime Minister Narasimha Rao’s 'Look East' Policy of the early 1990s, and eventually to Modi’s current 'Act East' Policy. Describing the latter as imparting “new-found salience” to India’s engagement with its “eastern neighbourhood and beyond,” External Affairs Minister Sushma Swaraj has in the past highlighted her government’s desire to “move with a great sense of priority and speed” in bolstering relations with ASEAN. At the present historic juncture, therefore, it bears examining how much the Act East Policy has achieved.

The policy itself is substantively not novel. India’s focus remains on enhancing economic relations with ASEAN—via greater infrastructural connectivity, regional development in northeastern India, and foreign direct investment more generally—and contributing to (and benefiting from) key discussions on regional security. On these fronts, gains under the current government have followed the trajectory set by previous governments. India’s current and growing trade volume with ASEAN is the result of many years of sustained increases driven partly by an FTA painstakingly negotiated and implemented in 2010. Similarly, India’s involvement with the ASEAN Regional Forum (ARF) and the more recent ASEAN Defense Minister’s Meeting-Plus (ADMM-Plus) had long established the template for regional security dialogue. The same is true of bilateral defense cooperation with ASEAN countries such as Vietnam, Indonesia, Singapore, and the Philippines—relationships that have been fostered across multiple dispensations in New Delhi.

What is new about the Act East Policy is the political symbolism and diplomatic drive behind India’s outreach to ASEAN countries. Modi has travelled to all but two ASEAN nations since becoming prime minister and has taken great care to consistently refer to ASEAN as the central pillar of the Act East Policy. While some might dismiss these moves as political theatre, they do not go unnoticed in ASEAN capitals or in Beijing. Previous Indian governments have noticeably lacked this level of diplomatic alacrity. For example, following the announcement of the Look East Policy and Singaporean Prime Minister Goh Chok Tong’s attendance as chief guest for Republic Day in 1994, it took another 17 years for a Southeast Asian head of state (President Yudhoyono of Indonesia) to attend in the same capacity. Economic and security partnerships aside, New Delhi’s political outreach to ASEAN was long overdue. It of course remains to be seen if India can deliver on the many promises it has made to ASEAN nations on trade, investment, connectivity, and security.

Nonetheless, political outreach is important given the considerable deterioration in India-China relations over the last year. As China’s elbows get sharper in East Asia and its forays into South Asia more frequent, close relations with ASEAN can help India apply counter-pressure when and where required. For instance, Delhi’s ongoing naval exercises, port calls, and maritime security dialogues with littoral countries in the South China Sea serve to remind Beijing of India’s ability and willingness to increase the cost of Chinese unilateralism in the region. A low-level tit-for-tat strategy with regard to China—a testing of each other’s waters, as it were—coupled with robust economic relations with ASEAN is undoubtedly a beneficial medium-term equilibrium for India.

This strategy, however, is not without a number of pitfalls. First, while India’s opposition to the Belt and Road Initiative (BRI) and boycott of Beijing’s flagship BRI forum in May 2017 may have signaled resolve to ASEAN, it makes little economic sense to exclude oneself from a massive infrastructure and connectivity enterprise in which numerous ASEAN states are implicated. Going forward, therefore, India’s economic and political priorities may increasingly come into conflict.

Second, by deepening defence cooperation in the South China Sea, New Delhi risks getting embroiled in a future maritime controversy or conflict between Beijing and one or more ASEAN nations. At that point, low-level adventurism (on both sides) might very well turn out to have major consequences that India cannot deter or see through due to insufficient naval capabilities for sustained operations outside the Indian Ocean. Without this capability, India’s support to ASEAN countries in a potential crisis will be nothing more than rhetorical and quickly discredited.

Finally, and perhaps most importantly, Beijing’s ability to sow divisions within ASEAN is likely to complicate any future attempts by New Delhi to build closer economic and security ties with the latter. Countries such as Laos, Cambodia, and Myanmar in particular, given their low levels of development compared to other ASEAN members, have proved susceptible to Chinese inducements and pressure (Vietnam, while less developed, has sought to diversify partnerships and resist Chinese influence). Others such as Singapore are occasionally thrown into uncertainty by unexpected rockiness in their relations with China. Thus, while ASEAN may well speak with one voice to India, its tone will be modulated by Beijing’s maneuverings relative to individual member states, particularly as the BRI unfolds across the region.

Fortunately for New Delhi, the above risks are contingent on the extent of India-ASEAN closeness, which at present is relatively low. The present government’s focus is accordingly suited to the circumstances: invite economic engagement from all members (even at the cost of a hefty trade imbalance), engage in low-key defense cooperation, and continue to play up the civilizational ties that bind India to Southeast Asia. If the prime minister and his advisers plan to seek substantially closer ties in the future, they would do well to remember that from a Southeast Asian perspective, there is no single authoritative Ramayana but various retellings that incorporate local cultures, mores, and interests.

Rohan Mukherjee is Assistant Professor of Political Science at Yale-NUS College, Singapore