Three Recent State Visits and India’s Act East Policy
Photo Credit: PTI
By Tridivesh Singh Maini

Three Recent State Visits and India’s Act East Policy

May. 02, 2017  |     |  0 comments


Tensions with Pakistan and China have understandably drawn media attention in India over the past several months. There has also been a lot of focus on Indian PM Narendra Modi’s upcoming visits to Israel and the US. In the last few weeks, there have been three significant state visits to India. The first was by Malaysian PM Najib Razak (March 30-April 3); the second by Bangladesh PM Sheikh Hasina (April 7-10); and the third by Australian PM Malcolm Turnbull (April 9-12). All three countries are important players in what the Modi Government has dubbed as India’s Act East Policy.

 

In the 1990s, India’s Look East Policy focused largely only on ASEAN and Japan. Over the subsequent two decades, there was a realization that India’s outreach to the East cannot just be restricted merely to ASEAN and Japan, and cannot be confined to the economic sphere. As former Indian Foreign Minister Yashwant Sinha highlighted in his 2003 address to the 2nd India-ASEAN Business Summit:

 

“India’s ‘Look East’ policy has now entered its Phase II. Phase I was focused primarily on the ASEAN countries and on trade and investment linkages. Phase II is characterized by an expanded definition of ‘East’ extending from Australia to China and East Asia with ASEAN as its core. Phase II marks a shift in focus from exclusively economic issues to economic and security issues including joint efforts to protect sea lanes, coordination on counter terrorism etc. On the economic side, Phase II is also characterized by arrangements for FTAs and establishing of institutional economic linkages between the countries of the region and India.”

 

Australia

 

Over the past decade, Australia-India ties have strengthened significantly owing to the China factor and India’s increasing ambitions in the Asia-Pacific region, with Australia being one of the countries pushing New Delhi to play its legitimate role. During the Australian PM’s visit, references were made about the need for stability in the Indo-Pacific Region:

 

“… that an economically prosperous Indo-Pacific region is underpinned by stability and security, the two leaders underscored the importance of respecting the maritime legal order based on the 1982 United Nations Convention on the Law of the Sea (UNCLOS). Both leaders recognised the importance of freedom of navigation and overflight, unimpeded lawful commerce, as well as resolving maritime disputes by peaceful means, in accordance with international law, including UNCLOS.”

 

The joint statement between the two leaders made references to the bilateral Framework for Security Cooperation agreed to in 2014, which has helped in expanding strategic cooperation. Apart from joint naval exercises and cooperation against counter-terrorism, the statement also made mention of trilateral cooperation between India, Japan and Australia.



The Act East Policy is driven by state governments due to their economic interests as well as desire to benefit from the experience of other countries.



While the Australian PM’s visit was reasonably successful, there are two issues which could prove to be irritants. While Australia participated in the Malabar Naval Exercises in 2007, this year New Delhi may keep Australia out. The US, India, and more recently Japan, hold joint annual naval drills, north of Australia. The second issue is Australia’s decision to scrap the 457 Visa which permits businesses to employ overseas workers for a period of 4 years in skilled jobs where there is a paucity of qualified Australian workers.

 

Bangladesh

 

The Act East Policy includes not just Southeast Asia, East Asia and countries in the Indo-Pacific, but also South Asian neighbors like Bangladesh. Bangladesh is important for India’s Act East Policy, since both are working together in BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) as well as the BBIN (Bhutan, Bangladesh, India, and Nepal) corridor. The India-Bangladesh joint statement, released following the meeting between both PMs, referred to the BCIM (Bangladesh, China, India, and Myanmar) Corridor:

 

“The two Prime Ministers reiterated their commitment to work closely in furthering relevant regional/sub-regional cooperation processes. They emphasized on further strengthening of cooperation and coordination among the BCIM-EC Study Group and directed their respective teams to finalize at an early date the BCIM-EC Study Group reports, which could facilitate projects envisaged under this framework.”

 

Dhaka has realized, given Pakistan’s lack of seriousness regarding progress within SAARC (South Asian Association for Regional Cooperation), that there are more opportunities outside the SAARC framework, and that given its strategic location, it can emerge as an important player in India’s Act East Policy. A strong reiteration of this point is the pragmatic approach of Bangladesh towards the expansion of land, rail, and maritime connectivity. Amongst the agreements signed during the Bangladesh PM’s visit, a large number focused on connectivity. India has in fact committed a 4.5 billion USD line of credit for important projects in Bangladesh, for improvement of infrastructure as well as enhancing connectivity.

 

The two countries also signed a defence agreement, for deepening cooperation between their armed forces. India would also supply defence hardware to Dhaka in accordance with this project. The Indian PM also lauded the Bangladesh PM for her efforts in dealing with terrorism: “We have the greatest admiration for Prime Minister Sheikh Hasina's firm resolve in dealing with terrorism. Her government's ‘zero-tolerance’ policy towards terrorism is an inspiration for all of us.”

 

Malaysia

 

Malaysia is amongst the first countries which India reached out to when it embarked upon its Look East Policy in the 1990s. The Malaysian PM’s visit was important for both the strategic and economic components. If one were to look at the economic component, there was talk of enhancing bilateral trade between both countries, and increasing Malaysian investments in India. Apart from delegation level talks with the Indian PM, the Malaysian PM also addressed businessmen in New Delhi and Jaipur. He laid a special emphasis on the RCEP (Regional Comprehensive Economic Partnership). The Malaysian PM raised this point while addressing the India Malaysia Business Forum in New Delhi organized jointly by Chambers of Commerce such as FICCI, Assocham and CII along with the Malaysian Investment Development Authority. Said the Malaysian PM: “It is more relevant now than before that we conclude RCEP. With the TPP gone, we need RCEP as a free trade arrangement for this area.” 

 

Apart from the South China Sea Issue, the India-Malaysia joint statement, after the meeting between both PMs, alluded to terrorism in all its manifestations. While in the past Malaysia had supported Pakistan, the current Malaysian PM has been tilting towards India. Significantly, the Indian PM praised Malaysia’s efforts at countering terrorism.

 

Conclusion

 

Overall, India’s outreach to the East — the Act East Policy — has witnessed a significant transformation. No longer does it depend solely upon one or two countries or ASEAN. Instead, it is willing to look at new partners who fit in with its strategic and economic priorities. The Act East Policy is not driven by New Delhi but by state governments who are emerging as key participants due to their economic interests as well as desire to benefit from the experience of other countries, specifically in East and Southeast Asia, in areas like skills development. The Act East Policy also seeks to explore connectivity beyond land borders, and there is an increasing emphasis on maritime connectivity.

 

What India needs to give greater attention to are Free Trade Agreements (FTAs) — what had been dubbed as Phase II of India’s “Look East Policy” by Yashwant Sinha in his 2003 speech. While in the strategic sphere, India has made significant strides, this is one area where there has not been much progress. In an increasingly insular world, such negotiations are likely to become more challenging. Apart from dealing with its external interlocutors, India will also need to take all domestic stakeholders on board for ensuring that the FTAs go ahead. New Delhi, which is keen to enhance connectivity with South and Southeast Asia, needs to also ensure that domestic infrastructure is enhanced, especially in the North East. The new Act East Policy, thus has a very strong domestic component which cannot be ignored. 


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