Ministry of External Affairs Government of India

ACT EAST IN INDIA’S FOREIGN POLICY

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  By: Amb (Retd) M. Ganapathi
  Venue: NMIMS, Mumbai
  Date: July 26, 2019
  

Heads of faculties and Coordinators, NMIMS
Dear students,
Friends,

I would like to thank the Vice Chancellor and the administration of the NMIMS for the invitation to deliver this lecture under the auspices of the Distinguished Lecture Series of the Ministry of External Affairs. I am grateful to the Ministry of External Affairs for supporting and working out my visit.

I thank the Institute for the excellent arrangements. My special gratitude to Prof Ravi Saxena for attending to all details with meticulous care.

On going through the website of the Institute, I found the Vice Chancellor’s message mentioning from a University/youth perspective that the University’s primary goal is to provide good quality education with the aim to develop employable youth. But from a diplomat’s viewpoint, the message also mentions that we live today in an interdependent world making it imperative for the University to pursue an internationalisation agenda. The concept of ‘Global Village’ is recalled in both the Vice Chancellor and the Pro-Vice Chancellor’s message. India’s culture sees Vasudeiva Kutumbhakam as part of its ethos. A country’s foreign policy contributes immensely towards progress and prosperity in a globalising village. This also reinforces the idea that foreign policy of any country cannot be divorced from its domestic policy and governance – the influence and outcome of each impact with equal measure on the other.

A momentous development in India’s progress took place earlier this week with the successful launch of Chandrayaan 2. We could see an Indian spacecraft land on an unexplored part of the surface of the moon in 48 days. I join the nation in congratulating the scientists of ISRO for achieving this singular success. And our armed forces deserve our special gratitude on Kargil Divas today – they are the sentinels who protect and defend our nation.

I have chosen the subject "Act East in India’s foreign policy” for today’s lecture, from a slate offered to me. However, as suggested, the focus therein will be on India-ASEAN relations. Before I move towards the Eastern dimension of India’s foreign policy, I will briefly touch upon the background to what is happening around the world and us.

100 years ago, the guns fell silent after World War I. And it is nearly 75 years since the end of World War II. These developments in the history of war and peace had Europe at its centre. The predominant influence of the United States on world affairs became evident from the mid-1940’s. The rush towards influencing the course of events and global affairs led to the Cold War between the United States led alliance of the West and the allies of the Soviet Union in the East. Non-alignment with India among its founding fathers was born as a counter to the militarised alliances.

The days of the Cold War are long gone. Nearly two decades of the 21st Century has gone by. Despite reports to the contrary, the United States will continue to hold strategic predominance in the years ahead, in the political, financial and geo-strategic areas. The Russian Federation, the Successor State to the Soviet Union, has struggled to hold its own. However, Russia, under President Vladimir Putin, is slowly regaining its influence. The Euro-Atlantic no longer continues to dominate headlines. With the gravitational shift in global dynamics, it will be the Indo-Pacific which will play a determining role in international relations in the coming years. The Cold War of the 20th Century might be long over, but the nature of this debate has taken an altogether new dimension.

As we move towards the third decade of the 21st Century, new and significant players have emerged to influence relations between States and developments among the comity of nations. The election of Donald Trump as the 45th President of the United States of America and statements emanating from Washington has created confusion in a world which perhaps had some semblance of order. The rapid rise of China and its dominant role in deciding the course of events around the globe is unmistakable. Europe is in a state of flux because its preeminent position in international relations has suffered.

IN his address to the Conference on Interaction and Confidence Building in Asia (CICA) in June 2019, External Affairs Minister Dr. S. Jaishankar had noted "Globalisation is under stress due to new and emerging geo-political and geo-economic faultlines. India supports a rule-based order in Asia, as in the rest of the world”.

The state of international relations is not static but dynamic. There are areas which stand out as possible sources of tension, conflict or discord. We need to keep a close eye on developments and respond appropriately to the evolving situation. Challenges will always be there, but they also throw up opportunities. We need to look at such opportunities in our larger national interest.

The thrust of India’s foreign policy in pursuit of its national interests has been a work in continuity in response to the various global developments. By and large, there is across the board political consensus on our foreign policy barring some differences in nuances.

Relations with our neighbours predominate our foreign policy and are a priority. This is followed by the States of ASEAN and Japan, which come under the ambit of our Act East policy. The Think West, coined by External Affairs Minister, Dr. S. Jaishankar, when he was Foreign Secretary, in our policy formulation would include the States of West Asia and the Gulf. We would accord importance to the members of the UN Security Council Permanent-5 and the European Union. Greater attention is now being focussed on countries in Africa and those in Latin America and the Caribbean and Oceania.

India has had extensive interaction with countries of East and South East Asia over the centuries. The influence of Indian art, culture and religion is significant in many of these countries. Buddhism acquired strong roots in the region while the influence of Hinduism was seen in some of the countries. The Kalingas had trading relations and the Chola Empire ventured politically and economically into many of these countries. The Asian Relations Conference and the Bandung Conference brought the countries of the region closer together. We have a multifaceted mutually beneficial partnership with ASEAN as a group and with its individual constituents. The development of India-ASEAN relations in the future would bring greater progress and prosperity to the North-Eastern States of India.

ASEAN celebrated its 50th Anniversary in August 2017. From its five founding members in 1967, ASEAN today has 10 members. Timor Leste could be the group’s 11th member in the not too distant future. ASEAN today is the most successful and harmonious regional grouping.

At their 34th Summit in Bangkok in June 2019, ASEAN leaders saw the three main themes at the Summit to include (i) "Advancing towards a "Digital ASEAN”; (ii) "Partnership” both within ASEAN and with Dialogue Partners; while reinforcing the ASEAN-centered regional architecture; and (iii) Building sustainability in all dimensions. The "ASEAN Community Vision 2025: Forging Ahead Together” will be the driving force in advancing partnership for sustainability.

India became a Sectoral Dialogue partner of ASEAN in 1992. In 1994, Prime Minister Narasimha Rao announced India’s Look East Policy while speaking at the Shangri La Dialogue in Singapore. India became a Full Dialogue partner of ASEAN in 1996. The partnership was raised to a Summit level in 2002 and to that of a Strategic Partner in 2012. Prime Minister Narendra Modi formally announced India’s Act East Policy during his visit to Myanmar in 2015. At different events he noted that India’s Act East Policy would extend from Bangladesh to the western seaboard of the United States of America. At the Shangri La Dialogue in Singapore in June 2018, Prime Minister Narendra Modi emphasised "India’s Act East Policy is shaped around ASEAN and its centrality in the regional security architecture of the Indo-Pacific region is evident”.

In 2012, India commemorated twenty years of its Partnership with ASEAN and ten years of Annual Summits. Leaders from all ten ASEAN countries participated in the commemorative event. 25 years of India’s association with ASEAN was commemorated in 2018 as "historic milestone”. Besides their participation in the commemoration events, the ten ASEAN leaders were Chief Guests at India’s 69th Republic Day celebrations, a first of sorts.

The general statement of principles of the 2004 document relating to ASEAN-India Partnership for Peace, Progress and Shared Prosperity was incorporated into a more comprehensive Vision Statement during the 2012 ASEAN-India Commemorative Summit. The rather free flowing Plans of Action for 2005-2010 and 2010-2015 were upgraded to a more structured and detailed Plan of Action for 2016-2020. This document underlines India’s support to the ASEAN Community Vision 2025 and its three pillars of ASEAN Political Security Community, the ASEAN Economic Community and the ASEAN Socio-Cultural Community.

Over these 25 years, India’s relations with ASEAN as a group and bilaterally with each of the individual ten countries have increased exponentially. There are 30 dialogue mechanisms which not only include annual Summit level interactions but also Ministerial meetings covering a wide range of areas as those on External Affairs, Defence and Security, Commerce, Telecommunications, Agriculture, Energy, Environment and Tourism.

As ASEAN’s strategic partner, there is wide-ranging cooperation in the political and security spheres. India is actively associated with various ASEAN-related defence and strategic institutions. These include the East Asia Summit, the ASEAN Regional Forum (ARF), ASEAN Defence Ministers Meeting Plus (ADDM+) and the Expanded ASEAN Maritime Forum. Our bilateral defence ties with the region and with individual ASEAN members have expanded significantly.

The challenges confronting India and ASEAN has led to enhanced joint cooperation and exchange of information in combating international terrorism, piracy, money laundering, organised crime, drug trafficking, arms trading, people smuggling, cybercrime, clandestine proliferation of nuclear materials and missile technology, among others.

The Indo-Pacific region occupies a pivotal position in India’s Act East policy. In his speech at the Shangri La Dialogue in Singapore in June 2018, Prime Minister Narendra Modi noted that the Indo-Pacific region is home to a vast array of global opportunities and challenges. He said, "The ten countries of South East Asia connect the two great oceans in both the geographical and civilisational sense. Inclusiveness, openness and ASEAN centrality and unity, therefore, lie at the heart of the new Indo-Pacific. India does not see the Indo-Pacific Region as a strategy or as a club of limited members”.

At its 34th Summit in Bangkok in June 2019, an ASEAN Outlook on the Indo-Pacific was released. India welcomed the Outlook proposals seeing "important elements of convergence with our own views, especially from the standpoint of principles, as well as its approach and ASEAN's listing of areas of cooperation”.

India and ASEAN have emphasised the importance of peace, stability, maritime safety and security, equal access as a right under international law to the use of common spaces on sea and in the air that would require freedom of navigation and overflight in the region, and unimpeded commerce and peaceful settlement of disputes in accordance with international law. They have underlined support the full and effective implementation of the Declaration on the Conduct of the Parties in the South China Sea (DOC) and look forward to an early conclusion of the Code of Conduct in the South China Sea (COC).

There are sub-regional multilateral forums such as the Mekong-Ganga Cooperation (MGC) and the Bay of Bengal Initiative for Multi-sectoral Technical and Economic Cooperation (BIMSTEC), which have provided additional platform for engagement between India and ASEAN. India has an annual Track 1.5 event, the Delhi Dialogue, to discuss politico-security and economic issues between ASEAN and India.

ASEAN figures indicate that two-way trade between India and ASEAN increased by 8.4 per cent from $73.63 billion in 2017 to $79.83 billion in 2018. DGCI&S statistics indicate that Indo-ASEAN trade in 2017-18 was $81.34 billion (approximately 10.6% of India's overall trade) and in 2018-19 $96.79 billion (approximately 11.5% of India’s overall trade). For the first month of 2018-19, the trade turnover was nearly $8.0 billion (approximately 9% of India’s overall trade). ASEAN is the India’s 5th largest trading partner. India is the 8th largest trading partner of ASEAN. The leaders of India and ASEAN had set a trade turnover target of $100 billion by 2015, which is just being achieved. Achieving the rather ambitious $200 billion target by 2022 will need a lot of effort. New opportunities and products need to be explored.

Bilaterally, Singapore is our largest trading partner with a trade turnover of $27.85 billion in 2018-19. This is followed by Indonesia at $21.12 billion and Malaysia at $17.25 billion. Besides these three countries, Vietnam and Thailand also find a place among India’s 25 largest trading partners.

Based on Ministry of Commerce & Industry data, cumulative FDI inflows into India from ASEAN between April 2000 to March 2018 were US$ 68.91 billion, which represents approximately 18.28% of the cumulative inflows received. Cumulative FDI outflows from India to ASEAN countries, from April 2007 to March 2015, as per Ministry of Finance data, was about US$ 38.67 billion.

The conclusion of the ASEAN-India Trade and Goods Agreement and the ASEAN-India Services and Investment Agreement allows for the creation of an ASEAN-India Free Trade Area. However, both sides need to monitor progress to remove whatever obstacles there may be in the smooth operationalisation of these agreements.

With a combined population of nearly 2 billion in India and the ASEAN region, and a combined GDP of over $5 trillion, opportunities are immense. Both sides have sought greater private sector involvement. An ASEAN-India Business Summit took place in New Delhi in January 2018. The ASEAN-India Business Council has been reactivated. The ASEAN-India Business Fair and Conclave has been held.

At its 2102 Summit, ASEAN proposed the idea of a Regional Comprehensive Economic Partnership (RCEP). The members of the RCEP include the ASEAN 10, the three APT+3 members, viz. China, Japan and Republic of Korea and the three Dialogue Partners India, Australia and New Zealand. The agreement aims to cover goods, services, investments, economic and technical cooperation, competition and intellectual property rights. The RCEP membership represents 45% of the world’s population, 30% of global trade and 33% of the global GDP.

26 rounds of talks have been held among RCEP members towards negotiating an agreed document. At the 34th ASEAN Summit in Bangkok in June 2019, Malaysian Prime Minister Mahathir Mohamad suggested that he was ready to push forward in concluding the Agreement even without some members for the time being, implicitly implying India. India is also keen that the Agreement be concluded by the next 35th ASEAN Summit in Bangkok but would like its concerns adequately addressed. Australia and New Zealand also have some concerns on the RCEP document as it stands now.

At the Shangri La Dialogue in June 2018, Prime Minister Narendra Modi underlined India’s determination to push ahead with RCEP negotiations. He supported its early conclusion and did not want India to be seen as holding out. He however, said that India needed an RCEP outcome that is a win-win for all and based on mutual trust.

Significant progress has been made in the market access negotiations of goods. Similar efforts are called for towards making progress in negotiations relating to services as they constitute more than 50% of the GDP of the most of the RCEP countries. Services are expected to play an important role in the future. India sought a modern, comprehensive, balanced and mutually beneficial agreement.

India’s main areas of concern include lack of transparency in the conduct of business in some partner countries; India's burgeoning deficit in trade in goods; taking advantage of loopholes in the rules of origins provisions; difficulties in market access; lack of interest by partners in satisfactorily addressing India’s concerns on services.

While looking for a win-win RCEP, India would like to ensure that the agreement is balanced not only across its key chapters - trade in goods, services and investment - but also within each chapter. India has said that there should not be an unequal balancing of tariff reductions in goods and services - partners need to ensure equal high level of tariff reduction in services as in goods, with binding commitments. Right now ASEAN has proposed a common concessions approach in goods with upto 92% tariff elimination, 7% tariff reduction and 1% in the exclusion list. India is also concerned at some of the provisions of the Investor-State Dispute Settlement process (ISDS). Many industry groups have submitted memoranda to the Government highlighting their concerns.

ASEAN-India connectivity is a priority for India as also the ASEAN countries. In 2013, India became the third dialogue partner of ASEAN to initiate an ASEAN Connectivity Coordinating Committee-India Meeting. India shares a seamless boundary with the ASEAN countries through Myanmar. Upgrading and strengthening connectivity should not only help develop India’s relations with ASEAN further but also more importantly provide avenues for development and progress in the North-Eastern States of India.

India is committed towards completion of the India-Myanmar-Thailand Trilateral Friendship Highway and its extension to Laos and Cambodia and onwards to Vietnam. India is associated with the completion of the Rhi-Tiddim road enabling connectivity between Mizoram and Mandalay in Myanmar; the construction of the Kalewa-Yargi road section; construction of 69 bridges in the Tamu-Kyigone-Kalewa to improve connectivity; among others. India is developing the Kaladan Multimodal Transit Transport Project in Myanmar. This will link Mizoram to the Myanmar port of Sittwe as also Kolkata and Sittwe ports. The waterways component of the project has been completed. The construction of the road component should be completed by 2020. An India-ASEAN Connectivity Summit was held in Delhi in December 2017.

The emergence of the Blue Economy as an important pillar of growth and prosperity in economic development of ocean countries provides another platform for engagement between India and ASEAN.

India’s cultural imprint is visible in most of the ASEAN countries. ASEAN and India have agreed to preserve, protect and restore symbols and structures which represent civilisational bonds between the two sides including those in Angkor Wat in Cambodia, Borobudur and Prambanan in Indonesia, Wat Phu in Laos, Bagan in Myanmar, Sukothai in Thailand and My Son in Vietnam. Ramayana is an important thread binding India and ASEAN.

People to people contact forms an important element of ASEAN-India cooperation. Tourism provides an significant base in this regard. There is a greater need for encouragement and awareness for tourists from India to visit ASEAN and vice versa. The setting up of the Nalanda University is an important step in highlighting the dimension of Buddhism and education in India’s cooperation with ASEAN. 3.45 million Indian tourists visited ASEAN in 2017 while under a million visitors from ASEAN countries visited India. The ASEAN-India Eminent Persons Lecture Series and ASEAN-India Network of Think Tanks are some of the other areas promoting ideas and avenues for further India-ASEAN cooperation.

The role of a strong Indian Diaspora in ASEAN in acting as a bridge in developing close partnership with the countries of their adoption and in the economic development of India and in bilateral commercial and economic cooperation needs no reiteration.

India’s engagement with ASEAN has paid good dividends and we need to continue to maintain the momentum in this direction. India and ASEAN need each other in a complex region where one super power is stepping back allowing a more combative and supremely ambitious power into the area. While India has done well in the political and security, cultural and people to people areas, a lot more will need to be done on the trade, economic and connectivity fronts with ASEAN to help the relationship blossom further. This will provide traction for growth, development and security bilaterally for India and ASEAN members and the Indo-Pacific region as a whole.

Before I conclude, I would like to stress on the importance of economic diplomacy. Political diplomacy will continue to focus on issues affecting inter-State relations and in countering the threats and dangers in a globalising world. At the same time, importance of economic diplomacy has come to be recognised by Governments the world over. In the years gone by, it had been said that politics drives economics. Economic relations in the early years after independence mainly focussed on trade and aid and technical assistance to support India’s growth and development. The significance of according priority to economic diplomacy found greater resonance in Indian politics after 1991. Today, an Indian diplomat spends on an average more time in discussing trade, commerce, finance, investment, energy options, environment and climate change than many of his predecessors would have done. Economic diplomacy not only provides for economic security but also is a comprehensive amalgam in the overall security matrix of a country.

And the subject of economic policy including economic diplomacy would be a profession which all of you would be associated with throughout your working career. I do hope that some of you do decide to join the Indian Foreign Service. Your academic pursuit will not be a deterrent. It is the adaptation and application which will ultimately make you a successful diplomat. Let me emphasise that Indian diplomats are considered among the best in the world. The Ministry of External Affairs would be delighted to see some of you representing the Republic of India overseas.