Pax Indica: India and the World of the Twenty-first Century

  One factor helping drive the policy was undoubtedly China’s early interest in the region. During the Cold War, Southeast Asia saw itself threatened by the risk of communist expansion, but once China opened up its economy to the outside world and became a major trading power, the prospects of military adventurism receded. Nonetheless, China’s growing economic and military might cast a shadow over a region that had traditionally been wary of Beijing. India’s interest in engaging more deeply with them offered the nations of Southeast Asia the prospect of a democratic and non-threatening counterbalance. For years India had been bogged down in its own neighbourhood, and dismissed by most—especially by Beijing—as at best a subcontinental power. ‘Look East’ began with trade but soon expanded to include diplomatic dialogue and strategic and military cooperation. It helped that both sides of the equation enjoyed a shared colonial experience, cultural affinities going back to antiquity and, despite the estrangement of the Cold War years, a striking lack of historical resentments to come between them.

  The India–ASEAN free trade agreement on goods, adopted in August 2009 in the face of critical domestic opposition from farmers in India, is perhaps the most striking evidence of the strategic priority accorded by New Delhi to commercial relations with the region. Part of the Framework Agreement on Comprehensive Cooperation signed with ASEAN in 2003, the FTA was India’s first multilateral trade agreement outside GATT/WTO. Indian bureaucrats had wanted to delay signing an FTA on goods until ASEAN members had agreed to conclude an FTA on services and investment, but they were overruled by Prime Minister Manmohan Singh, who was trying to use the FTA to send a political, and not just economic, signal to the region. (These negotiations are making slow progress, since India’s overwhelming advantage in the services sector causes some anxiety in Southeast Asia.) Nonetheless, in 2009 only 2.5 per cent of ASEAN’s trade was with India, compared to 11.6 per cent with China. In the three years since the FTA was signed, trade with ASEAN has gone up by 30 per cent.

  In addition, a host of bilateral agreements has been signed with individual countries: FTAs with Sri Lanka and Thailand, comprehensive economic partnership agreements with Singapore, South Korea, Malaysia and Japan, and an early harvest scheme with Thailand, as well as strong commercial, cultural and military ties with individual ASEAN members, notably the Philippines, Singapore, Vietnam and Cambodia. Relations have been strengthened (and upgraded to ‘strategic partnerships’) with Japan and South Korea, seen previously as too close to Washington to be of interest to non-aligned New Delhi, and even with Taiwan, a country which India had traditionally kept at arm’s length out of skittish deference to Beijing’s sensibilities. With Japan, there has been a flurry of high-level exchanges, with every one of the country’s succession of prime ministers making a beeline for New Delhi early in his term. Tokyo tends to see the utility of building up India as an alternative Asian centre of attraction, if not quite a counterweight, to Beijing. India, not China, is now the top recipient nation of yen credits. Japan and South Korea clearly began to take India more seriously after the India–ASEAN relationship improved and India began engaging with the region’s leaders at summit level.

  Japanese FDI in India is continuing to grow and has crossed $5.5 billion; Japan is also a generous purveyor of official development assistance, albeit in the form of loans, not grants, which are focused on infrastructure development (particularly power and transportation). One of the most important current Indo-Japanese projects is the Delhi– Mumbai industrial corridor, calling for an estimated total investment of $90 billion, which will transform a vast stretch of territory between the nation’s administrative and commercial capitals, involve a dedicated container freight rail line from the capital to India’s western seaports, vastly improved transport links and the creation of greenfield townships along its route. India and Japan elevated their relationship to a ‘strategic and global partnership’ in August 2007. The regular bilateral naval exercises already alluded to reflect the fact that more than 50 per cent of India’s trade and more than 80 per cent of Japan’s oil imports transit through the Strait of Malacca, giving both countries a significant stake in the security of the Indian Ocean. The exercises also reflect wariness about the likely need for understanding between the two countries in the event that China’s major military expansion begins to acquire unfriendly overtones.

  Also in East Asia, South Korea has developed an increasingly important relationship with India, its entrepreneurial multinational corporations having made striking inroads into the Indian market. South Korean brands dominate India’s advertising billboards, and have cornered impressive shares of the market for cars and consumer goods. The steel company POSCO even launched a $12-billion project in Orissa, but this has fallen afoul of political and bureaucratic resistance by local tribals and Delhi environmentalists, so that the project’s long wait for approvals and clearances has been dragging on since 2005. An active India–Republic of Korea foreign policy and security dialogue has been established, and the prospects for defence cooperation appear bright, especially since India and South Korea decided to enhance their relationship to a strategic partnership in 2010.

  These changed relationships offer a striking contrast to the days in the late 1950s when the Thai prime minister complained to an Indian journalist of New Delhi’s characterization of his country as a ‘Coca-Cola economy’, and Nehru’s foreign policy ideologue, V.K. Krishna Menon, when approached by Japan’s UN Ambassador Matsushima seeking collaboration, ‘shooed me [Matsushima] off, remarking that the policies of India and Japan were so different that collaboration was out of the question’. India kept ASEAN at arm’s length since its inception, seeing the organization as a surrogate for American interests during the Vietnam War. Its own increasing proximity to the Soviet Union, crystallized in the Treaty of Friendship and Cooperation signed as war clouds with a US-backed Pakistan loomed in 1971, did not help enhance its image in Southeast Asian eyes. The decision of the Indira Gandhi government to recognize the Vietnamese-backed Heng Samrin regime in Cambodia prompted further alienation between ASEAN capitals and New Delhi. India even rejected an invitation to become an ASEAN dialogue partner in 1980. But these difficulties were temporal and not structural ones. The estrangement ended swiftly when New Delhi wanted it to, in 1991.

  In India’s new pragmatic view of its foreign policy, it was important to improve relations not only with ASEAN but with East Asian lands beyond the association’s reach—with Japan and South Korea, for instance, because they are major sources of foreign investment to speed up India’s economic development. But equally, New Delhi saw an increasing strategic convergence with these two democracies, in the face of China’s impressive rise. ‘Look East’ has acquired tangible content in such areas as cooperation on counterterrorism and anti-piracy, maritime and energy security, keeping open the sea lanes of communication in the region’s waters and joint humanitarian relief operations (notably after the Indonesian tsunami, when the United States asked India, along with Japan and Australia, to constitute the core group of countries to deliver relief).

  A military and security dimension to the policy has also been emerging. With more than half of India’s trade traversing the Strait of Malacca, the Indian Navy has taken on a role in the joint patrolling of the Strait, and established a Far Eastern Naval Command at Port Blair on the Andaman and Nicobar Islands, Indian territory that lies closer to Sumatra than to Surat. It organizes a gathering of naval fleets, code-named ‘Milan’, in Port Blair biennially since 1995, to conduct combined exercises with eleven regional navies and also promote social and professional interactions among them. Defence cooperation has strengthened since 1993 with Malaysia—which, with over 2 million persons of Indian origin, is home to one of the largest Indian diaspora communities in the world—and has featured annual meetings of the two countries’ defence secretaries, military training and the supply of defence equipment.

  Bilaterally, India has cooperative arrangements with several countries str
etching from the Seychelles to Vietnam, many of which have acquired security dimensions. Multilaterally, India has been an active participant in the Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP), and maritime security has begun to loom larger in the consciousness of Indian decision-makers after the terrorists of 26/11 hijacked an Indian ship and transported themselves to Mumbai. A counterterrorism agreement with ASEAN reflects the region’s increasing worries about Islamic fundamentalism after the Bali bombings. Joint naval exercises have been conducted with Singapore also since 1993, with Indonesia since 2002 and occasionally, since 2000, with Vietnam; other exercises have featured Malaysia, Thailand and the Philippines. One joint exercise that involved India, Singapore, Japan and Australia sent the alarm bells ringing in Beijing and prompted a nervously Sinophile Canberra to pull the plug. New Delhi has shown little regret about the end of what many had seen as an incipient strategic alliance of these four countries (with a benign United States looking on) in East Asia.

  India’s diplomats have been kept busy as New Delhi stepped up its active presence in the region. India became a ‘sectoral dialogue partner’ with ASEAN in 1992, a full dialogue partner in 1995, a member of the Council for Security Cooperation in the Asia-Pacific the following year; it participated in the ASEAN Ministerial Meeting, the Post Ministerial Conference and the ASEAN Regional Forum in July 1996. India became a ‘summit level partner’ (a status accorded previously only to China, Japan and South Korea) in 2002. ‘ASEAN+3’ became ‘ASEAN+6’ to include India (in order, Japan made clear, to balance China’s strength in the +3 format); and India was made a full member of the East Asia Summit by leaders in Singapore and Indonesia who shared much the same concerns. (India is not yet in the Asia-Pacific Economic Cooperation forum, APEC, despite the best efforts of Japan and the United States, because China stubbornly persists in pointing out that New Delhi doesn’t actually have any visible connection to the Pacific.)

  In all this, it is difficult to see the same India that had failed—indeed refused—to get in on the ground floor when ASEAN was created in 1965. In the ARF, India has focused on a number of key activities such as peacekeeping, maritime security and cyber security, where its undeniable strengths are of great value to the other members. India has also involved itself in several infrastructure projects that serve to tie it closer to Southeast Asia: the UN Economic and Social Commission for Asia and the Pacific’s plans for an Asian highway network and a trans-Asian railway network, and the intermittent attempts to reopen the Second World War–era ‘Stilwell Road’ which would link Assam with China’s Yunnan province through Myanmar. While such ventures are still largely schemes on the drawing board, the government has been kept busy hosting India–ASEAN business summits, pursuing its obligations under ASEAN’s Treaty of Amity and Cooperation in Southeast Asis (to which India acceded in 2003) and arranging a series of high-level visits to and from ASEAN countries. Trade with the region accounts for some 45 per cent of India’s foreign trade, and remains vital for the country’s future prosperity.

  The Stilwell Road may in fact be a somewhat premature idea, given that a road link with a China that still does not recognize Arunachal Pradesh as a part of India would open our country up further to Chinese irredentist claims, not to mention flooding the region with Chinese products at a time when Indian goods are struggling to reach northeastern Indian markets. A bigger priority ought to be to connect the rest of India better to the state and to the north-eastern region as a whole, which will require New Delhi to do much more to develop infrastructure in the state than to establish a road link with China. If India starts thinking strategically about its North-East, it will have to make some investments in domestic infrastructure before it thinks of expenditure abroad.

  Nonetheless, India has played a crucial role in developing multilateral organizations in the region, notably the Mekong–Ganga Cooperation (MGC), the IOR-ARC and BIMSTEC, the latter pair of which we will discuss in greater detail below. Such associations of countries around a common purpose have two attractive features: they permit progress to be made on developmental, environmental and security issues, while benefiting from the exclusion of strategic rivals like Pakistan and China. Pakistan has systematically obstructed all of India’s efforts to forge meaningful progress in SAARC, as noted in Chapter Three. Despite China being an Upper Mekong riparian country, it has been omitted from the MGC, giving credence to Beijing’s view that India’s intentions in devising this organization are deliberately to counterbalance China’s influence in the area. (In all fairness, however, it should be pointed out that China refuses to be part of the Mekong River Commission, claiming that it is not an Upper Mekong riparian state.)

  As Prime Minister Manmohan Singh made clear when speaking about the strategic shift embodied in India’s ‘Look East’ policy, ‘most of all it is about reaching out to our civilizational neighbours in Southeast Asia and East Asia’. This outreach was essential if India was to avoid being confined to its immediate subcontinental environs and establish itself as a regional power; it was also necessary if India was to take advantage of the huge economic advances made by the Southeast Asian nations, whose successes in many respects pointed the way for India’s own progress and prosperity. Six of the twenty members of the G20, as the Indian prime minister noted—Australia, China, India, Indonesia, Japan and South Korea—belong to the East Asia Summit. With talk of the twenty-first century being the ‘Asian Century’ as the twentieth was America’s, Prime Minister Manmohan Singh’s vision of an integrated Asia stretching from the Himalayas to the Pacific Ocean, in which one could travel, trade and invest freely throughout the region, is an admirable objective, if still—given geopolitical realities—largely a dream.

  For despite all the encouraging developments, there is still a long way to go. India–ASEAN trade is not yet at $50 billion; with a few exceptions like Singapore, the visa regime between India and ASEAN members remains complicated and difficult; despite the liberalization of air services agreements with ASEAN members, India’s airlines still do not enjoy a comprehensive open skies policy with ASEAN and vice versa; and tourism from ASEAN (and for that matter from East Asian countries like Japan, Korea, China and Taiwan) to India does not begin to compare to that in the opposite direction, reaching barely 10 per cent of Indian travellers to the East. It is startling that the land that gave birth to Buddhism has not been able to attract more Buddhists to places like Bodh Gaya, Sarnath and Nalanda (or for that matter to the much else that India offers, from the Taj Mahal to golden beaches, nature parks and resorts and places of historical interest, none of which has been marketed well in the region). Visa restrictions continue to apply on both sides; tentative moves to promote visas on arrival in India were scuttled after the terrorist attacks of 26/11 revealed the country’s vulnerability to malign outsiders. The kind of cooperative projects being discussed—launching an India–ASEAN health care initiative aiming to provide low-cost drugs, or creating an India–ASEAN Green Fund for Climate Change projects—are underwhelming. In contrast, the China–ASEAN FTA is the third largest regional agreement in terms of economic value, after only the EU and NAFTA. India has also been seen to be considerably less active than China or Japan across the ASEAN region.

  There are, however, some evident Indian comparative advantages that can be leveraged through its ‘Look East’ policy. The excellence of its institutions of higher education, notably the famed Indian Institutes of Technology (IITs) and of Management (IIMs) have given it a reputation in human resource development that makes it an attractive resource not just for developing countries like Cambodia, Laos or Timor-Leste, but even for relatively advanced nations like Indonesia, Malaysia and Singapore, each of which has solicited the establishment of Indian educational institutions on their territories. Information technology remains a key selling point, but by no means the only one.

  While India has never shown a great deal of enthusiasm for exporting its democracy, it remain
s willing to offer technical assistance in such areas of democracy promotion as public administration and the conduct of free and fair elections. As the motherland of much of Southeast Asia’s culture and the crucible of the Buddhism widely practised across the region, India begins with a storehouse of respect that it has sometimes seemed to squander. Where imagination has been allied to public policy and governmental support, the results can be spectacular, as in the Nalanda project, which revives a fabled international university in Bihar, a lodestar for students from the Far East for centuries before Oxford and Cambridge were even dreamed of. The active participation of China, Japan and Singapore in Nalanda’s revival is a noteworthy example of the use of culture to strengthen political relations across the region.

  On the other side of the ledger is the failure to use the scattered Indian diaspora in the region as levers of Indian policy. Unlike the Chinese diaspora, the Indian is less cohesive, more generally working class in origin (going back to the importation of plantation labour by the colonial regime) and less influential in their societies—there is no Indian equivalent of the ethnic Chinese generals in Indonesia or prime ministers in Thailand. The Indian diaspora in Southeast Asia, differing visibly from the indigenes around them, also tends to be more anxious to demonstrate their loyalty to their countries of residence, overtly eschewing any political affinity to their cultural motherland in India. This is gradually changing, though, as India itself is seen as more acceptable to the countries of the region; some prominent Singaporean Indians, for instance, who at one time went out of their way to criticize India sharply and publicly, now speak openly in misty-eyed terms of their Indian origins—a clear reflection of the changing esteem in which the new, post-1991 India is held.