Engaging with East Asia

India’s “Act East Policy” advocated by Modi at the 12^th ASEAN-India summit at Nay Pi Taw will be further bolstered by his visit to Malaysia and Singapore from November 21-24. Modi during his visit to Malaysia will attend 13^th ASEAN- India Summit and the 10^th East Asian Summit at Kuala Lumpur. With a keen focus on trade and strategic cooperation Modi is likely to intensify engagement with ASEAN group.

Association of South East Asian Nations (ASEAN) is a strategic conglomeration of 10 countries and created in 1967 to strengthen economic growth, social progress, regional solidarity and cooperation.  The member states occupy a region of 4.4 million sq. kilometers, nearly half of the size of US with a combined population of 626 million which is 8.8% of global population and economy valued more than $ 2.6 trillion, making it the seventh largest economic entity after US, China, Japan, Germany, France and United Kingdom. Following the Bangkok declaration in 1967 initially five countries Indonesia, Malaysia, Philippines, Singapore and Thailand came together to create ASEAN with a sole aim of achieving economic development. Brunei Darussalam joined in 1984 barely a week after its independence becoming the sixth member of the group. Vietnam joined in 1995 followed by Laos and Myanmar in 1997 and the last one to join the group was Cambodia in 1999. The most laudable achievement of the group towards regional peace and security has been signing of the South East Asian Nuclear Free Zone in 1995 which came into force in 2001 following the ratification of the treaty by Philippines. ASEAN is close to European Union in its functioning. The bloc in a bid to integrate with its regional counterparts created ASEAN plus three by extending membership to China, South Korea and Japan in 1997. ASEAN was given observer status in UN General Assembly and in turn it made UN its dialogue partner. ASEAN plus three expanded itself into East Asian Summit (EAS) including India, Australia, New Zealand, US and Russia.  ASEAN plus six which became EAS in 2005 held its inaugural session in Kuala Lumpur. It later expanded to include US and Russia in 2011. EAS meetings are now held annually with ASEAN countries retaining the leadership and the discussions of the meet are focused on trade, energy, security and regional community building. The concept of the East Asian group owes its existence to the idea floated by Malaysian Prime Minister Mahathir Mohamad for an East Asian economic Caucus in 1991.

India’s engagement with ASEAN progressed from sectorial dialogue in 1992 to full dialogue partnership in 1995. This formally elevated into India-ASEAN summit in 2002 at Phnom Penh, Cambodia since then summits were held annually. India-ASEAN Commemorative Summit was held in 2012 at Delhi to commemorate a decade long cooperation, wherein India-ASEAN partnership was elevated to strategic partnership. The collaboration between India and ASEAN transcends various dimensions ranging from summits, ministerial meetings, senior meetings, expert levels and the frame works like the ARF (ASEAN Regional Forum),  Post Ministerial Conference (PMC)+1, EAS, Mekong- Ganga Cooperation and Bengal Initiative for Multisectoral Technical and Economic Cooperation (BIMSTEC) which helps to enhance regional dialogue and regional integration. So far India and ASEAN have signed joint declarations for cooperation on combating international terrorism (2003) under the Treaty of Cooperation in South East Asia (TAC), Plan of action for partnership for Peace, Progress and Shared Prosperity (2004-2010). In 2012 ASEAN-India Eminent Persons Group (EPG) was established to explore ways to deepen and widen partnership. Finally in 2015, India established a separate Diplomatic Mission to ASEAN to work in tandem with the ASEAN secretariat in Jakarta.

ASEAN is India’s fourth largest trade partner while India is sixth largest trade partner of ASEAN. The volume of trade is $76.52 billion with India importing goods valued at $ 44.71 billion while exports stood at $ 31.81 billion. Though the leaders have set a target of $100 billion to be achieved by 2015, trade transactions fell critically short of the target. But India’s trade prospects with ASEAN and its economic integration with region received a major fillip with successful ratification of the free trade agreement by January 2015 and India- ASEAN Trade in Services and Investment came into effect from July 1^st 2015. With China’s economy slowing slipping into doldrums Modi must seize this opportunity to walk the talk and infuse dynamism in attracting investments for the much needed infrastructure project and manufacturing hubs. Presently, the FDI inflows from ASEAN into India stand at $32.4 billion while outflows from India to ASEAN countries are estimated to be $36.8 billion.

Moreover ASEAN bloc includes “Tiger Economies” which can be perfect partners for India’s quest for rapid economic development. While Modi couldn’t visit any of the East Asian countries baring Myanmar during his first year of the regime Indian government laid a solid ground to strengthen its relations with South East Asia. These include visits of Pranab Mukherjee the President of India in September to Vietnam where he inked various pacts on defence procurement, oil exploration and air connectivity besides extension of $100 million credit line to Vietnam for defence purchases. Vice-President travelled to Indonesia, Brunei, Cambodia and Laos to boost up ties. Indian engagement with ASEAN is guided by geopolitical and economic interests. ASEAN is also keen in strengthening ties with India for its growing economic and investment potential and also to counterbalance growing economic and political clout of China. Clearly India’s relations with ASEAN suffered gross neglect during the UPA-II with the last bilateral visit to Malaysia dating back to 2010. This current visit would an occasion to rejuvenate friendship with both Malaysia and Singapore and seek expertise that can catapult Make In India (MII), Skill India and Digital India initiatives.

Modi will hold bilateral talks with Malaysian counterpart NajibTun Razak who during his first year of the tenure visited both India and China in 2010 indicating that Malaysian future lies rests in these two countries. Najib unlike his predecessors is believed to be more favorable to India and equally so 2 million strong Indian origin population contribute to 3-4 % of Malaysian economy. Strategically Malaysia occupies a pivotal position in the region and sits at the head of Malacca straits which operates trade worth $5 billion connecting Asian markets to Persian Gulf. It also serves are link between South China Sea, Indian Ocean and Pacific Ocean. Defence relations between India and Malaysia rose steadily with signing of MoU on Defence cooperation in 1993. From 2008, India and Malaysia have been holding joint military exercises annually referred to as “Harimau Shakti”. Indian Air Force Training Team trained Malaysian pilots on Su-30 SKM from 2008 to 2010. Indian Naval ships makes regular part calls to Kemaman port. Malaysia is third largest trading partner for India among the ASEAN bloc with the trade surplus is significantly imbalanced towards Malaysia. Indian investments in Malaysia are steadily increasing owing to relative ease of setting up business and its stable economy. India and Malaysia have been consistently strengthening cooperation to combat terrorism, unearthing fake currency and drug peddling, arms transfer and exchanging information about the rebel Sri Lankan Tamil militants who found safe havens in Malaysia. Modi will inaugurate Torana Gate, in intricately carved gate inspired from the Buddhist statues of Sanchi marking the launch of Kuala Lumpur’s Little India project and statue of Mahatma Gandhi, interact with business leaders, visit RamaKrishna Mission complex and Batu Caves temple, and address the Indian Diaspora at the Malaysia International Exhibition and Convention Centre. Besides Modi will meet several World leaders including the Premier of China Li Kequiang, Prime Minister of Japan Shinzo Abe and others along the sidelines of the India-ASEAN summit.

Modi would travel to Singapore on 23^rd November where he will deliver Singapore Lecture which will outline the myriad details of the India’s Act East Policy. India’s relations with Singapore dates back to Cholas who are believed to have christened the island. Later under British regime ships regularly transited between India and Singapore which too was a strategic British colony. Singapore has been a steadfast supporter of India. India was the first country to set up diplomatic relations with Singapore immediately after its independence in 1965. Lee Kuan Yew, the father of modern Singapore in his book “Look East to Look West”, pays ode to the great Hindu civilization that pervaded in the Indian Ocean region and laments about the underutilization of India’s potential. Prime Minister Modi last visited Singapore in 2015 to attend the state funeral of Lee Kuan Yew.

Singapore is India’s largest trading partner in ASEAN and the relations between the two countries are augured by economic cooperation. Singapore is the second largest source of FDI accounting to $31.9 billion. Banking, pharmaceuticals, telecommunications and information technology have been major portfolios of investment. Conversely Singapore is the top destinations of Indian companies with an estimated 6000 Indian firms registered in Singapore. Indian outflows to Singapore stand at $37.9 billion. Singapore is the first country with which India has entered into a Comprehensive Economic Cooperation Agreement (CECA) in 2005 incentivizing the trade between the countries. People of Indian origin make up to 9.1% of the population of Singapore mostly serving in IT companies, financial services and marine sectors and have contributed in building bridges of friendship with the City Country. The tremendous economic progress made by Singapore in the modern era is an inspiring model worth emulating.

Modi will have bilateral talks with Prime Minister Lee Hsien Loong and it is believed that existing bilateral ties will be elevated to strategic partnership. The five core areas of cooperation would include enhancing trade and investment, rejuvenating air and marine connectivity, smart city development and urban rejuvenation, skills development and capacity building, strengthening cultural and business links. Other important items on his itinerary include interaction with business investors at economic convention, visit to Singapore’s Institute of Technical Education (ITE), pay homage at the INA Memorial Marker at Esplande Park and address Indian community.

India is increasingly looking forward to Singapore’s cooperation in establishing a Skill training center in the North East, in Urban planning and housing missions which include: Smart cities, AMRUT (Atal Mission for Rejuvenation and Urban Transformation) and Housing For All. Singapore in turn wants India to increase ease of doing business, aggressively push for reforms and increase air connectivity.

Modi’s visit to the Malaysia and Singapore and participation in the two summits ASEAN and EAS comes at a time when the South China Sea (SCS) has attained a dubious reputation of being “place of fierce rivalry”.  China’s doctrine of the “Nine Dashed Lines” that lays claims on nearly 90% of SCS undermining the claims of its six neighboring countries in the region has taken the rivalry to the hilt. Further its unabated and relentless artificial island building spree in SCS has charged up the passions of the ASEAN countries which are intimidated by Chinese hegemony. Increasing frictions have prompted ASEAN countries to look at India which is considered as a “benign power” in the region, an effective counterbalance with its size and market potential on par with China. India has already pitched for freedom of navigation in the region and resolution of disputes in SCS in accordance to United Nations Convention on the Law of the Seas (UNCLOS).

India must seize this opportunity to dynamically pursue its development agenda. It has already missed the bus of Trans-Pacific Partnership (TPP) and Trans-Atlantic Trade and Investment Partnership (TTIP). To stay in the race of regional economic integration India must ambitiously work in initiating negotiations on Regional Comprehensive Economic Partnership (RCEP), a free trade agreement between ASEAN, India, China, Japan, South Korea, Australia and New Zealand. 13/11, Paris attacks spread a wave of panic across the globe spurring nations to collectively initiate an action to extricate the menace of terrorism. With reports of people from Indonesia and Malaysia joining the IS emanating, there is an increasing threat for terror strikes in this region as well. India and the extended East Asia now aims to deepen cooperation in counter-terror operations through intelligence sharing and in evading cyber-attacks through up gradation of cyber security infrastructure. In this current phase of expansive diplomatic engagement Modi can effectively expedite his foreign policy to bring about consistent and positive developments in India through sustained focus on trade and investments. Deepening relations with the economically dynamic countries of East Asia might be a stepping stone for India’s quest for economic progress.

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