Special Report: India’s Act East a work in progress

29-Jun-2015 # ActEast Source: India Inc

Soon after assuming power in New Delhi about 13 months ago, Prime Minister Narendra Modi clearly articulated his vision of forging closer ties with India’s Asian neighbours, particularly ASEAN and other East Asian nations, on a priority basis. Building on PV Narasimha Rao’s 1992 Look East policy, which was taken forward by the successor governments of Atal Bihari Vajpayee and Manmohan Singh, Modi’s Act East policy has strong economic and strategic dimensions in which India’s millennia-old cultural ties with countries in this region play a major role.

In keeping with this philosophy, the focus has now shifted to an aggressive outreach to these nations, including Japan, South Korea and Australia, as well as those on the Indian Ocean rim and the East Pacific.

Modi’s successful engagements with China, Japan, Australia, South Korea, the ASEAN and the countries of the Indian Ocean over the last year are considered the high points of this policy so far. To deepen its engagement, New Delhi is now focussing on a trilateral highway project to connect India’s North East with Thailand via Myanmar. An influential section of New Delhi’s strategic current strategic establishment agrees that Myanmar is one of the lynchpins of the Act East Policy. Hence, the urgency in the government’s strategic and economic outreach to that country.

Though India’s policy planners deny it in public, it is a fact that the establishment in New Delhi is deeply concerned at China’s aggressive intent as exemplified by its claim over South China Sea, its naval expansion into the Indian Ocean, which India considers its backyard, as well as its co-called Maritime Silk Route.

The government considers energy security as an important component of its Act East Policy. Accordingly, ONGC Videsh, the overseas investment arm of the country’s national oil explorer ONGC, was granted two offshore oil blocks in South China Sea. China has strongly opposed this on the basis of its claims over the waterway. This issue remains unsettled. Given India’s efforts not to ruffle feathers in Beijing, notwithstanding its joint statement with the US during President Barrack Obama’s visit to Delhi on South China Sea, it will be interesting to see how India proceeds on this issue.

In this context, Modi’s Look East Policy is expected to expand on what many said is his overall policy towards Beijing – cooperate and contain. Modi has already agreed to supply Vietnam with four naval patrol boats and has also announced that his government “will quickly operationalise a $100-million line of credit to Vietnam to acquire new naval vessels from India”.

Then, India is training Vietnamese naval personnel in Russian Kilo class submarines and may also agree on extending similar training in the sophisticated Sukhoi planes.

Some early dividends are already coming in from the Act East Policy. Australian Prime Minister Tony Abbott’s government sealed a deal last year to supply uranium for India’s civilian nuclear programme. Australia has the world’s largest reserves of recoverable uranium.

Japanese Prime Minister Shinzo Abe, with whom Modi shares close ties, is close to becoming India’s “all weather friend”. Indeed, Japan is key to the Prime Minister Act East Policy. This is evident in the economic cooperation between the two countries. Japan has committed $35 billion investments in India, which will create millions of jobs under the government’s Make in India initiative.

Japan is also participating in and financing the ambitious $90-billion Delhi-Mumbai Industrial Corridor project, which will improve India’s logistics chain and create jobs under the above initiative.

But despite the close and warm diplomatic, economic and emerging strategic bonds between Tokyo and New Delhi, a deal on nuclear cooperation has not been forthcoming as Japan has been insisting that India formally agrees to desist from further N-tests and allow intrusive inspections to ensure that N-materials are not diverted for military use.

Talks are continuing in this regard but given Japan’s sensitivities on the nuclear issue, the chasm looks wide to bridge, but this is unlikely to affect the close ties between the two countries.

But the worst kept secret in New Delhi is the strategic establishment’s discomfort with China’s strategy to encircle India. To counter this, India has been engaging in naval exercises with Japan, the US, Singapore and others, but has avoided multilateral engagements to avoid upsetting China.

India’s Act East Policy, which, incidentally predates the US “pivot to Asia”, and has much broader goals, is still a work in progress. Independent India has neglected the age-old ties that were sealed 2,300 years ago when Emperor Ashoka sent Buddhist missionaries to spread the message of love and universal brotherhood.

That message is still relevant. Unlike some other countries, whose rise is seen with suspicion, India is considered a benevolent power. New Delhi had, till recently, practically forsaken this heritage. Reclaiming and building on these ties for the greatest common good will be the way forward for India’s Act East Policy.

by Arnab Mitra

Arnab Mitra is a senior journalist based in Delhi. He writes on business and politics.

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