Looking South-East

By hosting a two-day ASEAN-India summit in New Delhi, India underscored its strategic partnership with the grouping. But it is still China that has the upper hand in investments and trade in the ASEAN member states.

An ASEAN-India tableau rolling down Rajpath during the 69th Republic Day celebration in New Delhi this year.

In a diplomatic coup of sorts, the Indian government got the heads of state of all Association of Southeast Asian Nations (ASEAN) members to attend India’s 69th Republic Day celebrations. The government of Prime Minister Narendra Modi specialises in hosting grand diplomatic events. A couple of years ago, it got together African heads of state for a summit in New Delhi, though not every one of them attended it. That was not the case for the India-ASEAN Commemorative Summit. All the ASEAN heads of states were present for the two-day meeting.

In 2017, India and ASEAN completed 25 years of partnership. For the past 15 years, there have been annual interactions between the regional grouping and India. The relationship was raised to the status of a strategic partnership five years ago. Currently, India and ASEAN are in the process of finalising the Regional Comprehensive Economic Partnership (RCEP), the negotiations for which started way back in 2012. It is envisaged that the RCEP will be one of the world’s largest trading blocs as it proposes a free-trade agreement between ASEAN and six other countries in the Asia-Pacific region, including India, China, Japan and South Korea. India still has some misgivings about opening up its economy to unfettered free trade, and hence the delay in signing the RCEP. In 2012, India made a committment to trade worth $100 billion with the ASEAN bloc by 2017. That figure currently hovers around $70 billion.

Delhi Declaration

The Delhi Declaration issued at the end of the summit reaffirmed the commitment of India and ASEAN “to work closely together on common regional and international security issues of mutual concern and ensure an open, transparent, inclusive and rules-based regional architecture through existing ASEAN-led frameworks and mechanisms”. Paragraph 6 talks about the importance of the maintenance and promotion of “peace, stability, maritime safety and security, freedom of navigation and overflight in the region and other lawful uses of the seas and unimpeded maritime commerce”. This part of the declaration seems to be China specific as many ASEAN members continue to be embroiled in maritime territorial disputes with China. Under the Modi government, India has adopted an even more overtly anti-China position than previous administrations. The declaration also mentions the need for “disrupting and countering terrorists” and “countering cross border movement of terrorists”.

Origins of ASEAN

ASEAN originated in 1967 as a small grouping of five pro-Western states. It was intended to be a bulwark against the spread of communism. The founding members were Indonesia, Malaysia, Thailand, Singapore and the Philippines. After the end of the Cold War, ASEAN lost much of its ideological moorings as it expanded to include communist countries such as Vietnam, Laos and Cambodia and army-controlled Myanmar. ASEAN is now considered one of the most effective regional groupings in the world along with the European Union (E.U.). The member states, despite their different internal power structures, have been able to get along by adopting a consensual approach to solving bilateral issues. Until the 1970s, South-East Asia was a bitterly divided region. Indonesia and Malaysia were on the brink of a full-fledged war. Many of the countries in the region were recovering from the after-effects of military occupation and civil wars.

The core group of ASEAN no longer viewed China with suspicion after it embraced a market economy. China today is the biggest investor and trade partner of the countries in the ASEAN grouping. Currently, ASEAN is China’s third biggest trading partner. The grouping may soon overtake the E.U. and become China’s number one trading partner. All ASEAN member states are also enthusiastic supporters of China’s ambitious Belt and Road initiative. South-East Asia is central to China’s “21st Century Maritime Silk Road”. The China-Indochina Corridor for International Economic Cooperation is one of the six major corridors that will be constructed under the Belt and Road project. The China-ASEAN Investment Cooperation Fund plans to raise $3 billion investment for the Belt and Road initiative.

Even countries such as the Philippines and Vietnam that have serious maritime border disputes with China are avid backers of the Belt and Road initiative. The Philippines had even won a favourable ruling in an international tribunal over its maritime dispute with China in the South China Sea. But with the coming to power of Rodrigo Duterte in 2016, the Philippines, which was thrust to the forefront of the dispute with China by the Barack Obama administration, changed tack. It is now calling for a diplomatic solution. Although South-East Asian nations would prefer a negotiated settlement to the dispute in the South China Sea, the United States and its allies such as Japan want the dispute to fester, claiming that China is posing an imminent threat to the freedom of navigation.

Modi, in his speech to the ASEAN leaders assembled in New Delhi, said that India shared “ASEAN’s vision of peace and prosperity through a rules-based order for the ocean and the seas. Respect for international laws, notably UNCLOS [United Nations Convention on the Law of the Sea], is critical for this.” China had rejected the UNCLOS mediation in its dispute with the Philippines. Modi said that India was committed to working “with ASEAN to enhance practical cooperation and collaboration in our shared maritime domain”. There was no mention of the Indo-Pacific region in the Delhi Declaration or by the ASEAN leaders.

In his speech, Prime Minister Lee Hsien Loong of Singapore, the current ASEAN Chairman, said that India was a major regional player which had helped “keep the regional architecture open, balanced and inclusive”. Singapore, while enjoying close commercial links with China, is tied strategically and militarily to the West. In 2017, Singapore and India signed a maritime security agreement to enhance security in the strategically located Straits of Malacca, through which much of China’s energy imports flow. China was not happy with this development and had even issued a “demarche” to Singapore.

The India-ASEAN summit took place after India had once again decided to be part of the quadrilateral military alliance (the Quad) and hold joint military exercises in the Asia-Pacific region with the U.S., Japan and Australia, the other members of the alliance. Many ASEAN countries are not happy with the growing militarisation of their region spurred by the rivalry between the U.S. and China. The ASEAN leaders were no doubt aware that India’s decision to host the two-day “commemorative summit” was to a large extent motivated by the growing Chinese economic and military presence in the region.

Vietnam is one ASEAN country that has encouraged India to play a more proactive role in the region. The two countries have close military ties. There was talk of India even supplying Vietnam with the Brahmos missile, one of the most lethal weapons in the country’s defence armoury. But these days, even Vietnam is taking a more pragmatic approach towards China. This is not surprising as China is the country’s biggest trading partner and investor. Vietnamese Prime Minister Nguyen Xuan Phuc told an Indian newspaper that there had been “positive and commendable signs” of thawing of tension between ASEAN and China. He said that India’s primary focus should be on “trade and investment” and stressed that this should be the priority of the Indian government for strengthening ties with ASEAN.

The Modi government announced an ambitious “Act East” policy as soon as it took over. The policy was supposed to enhance the “Look East” policy the P.V. Narasimha Rao government embarked on in the last decade of the 20th century. With the National Democratic Alliance government having lost interest in the South Asian Association for Regional Cooperation (SAARC) grouping, its focus has shifted to the Bay of Bengal region, and it has given more emphasis to the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). Myanmar and Thailand are the two ASEAN members within the BIMSTEC framework, and India hopes to forge a special relationship with them. But in these two countries too, it is China that has the upper hand in investments and trade. India is far behind. All the same, many ASEAN countries want another Asian country to play the role of a balancing power vis-a-vis China. The political elites in countries such as Indonesia and Myanmar have historically viewed China with suspicion. India is committed to building a highway connecting its north-eastern region to Myanmar and Thailand. It will connect Manipur to Mae Sot in Thailand. India hopes to expand this road all the way to Vietnam. Kenichi Yokoyama, the India Director of the Asian Development Bank, said recently that Assam could emerge as the hub of commerce and trade between India and ASEAN. He gave the example of the Chinese province of Yunnan. “Strong trade relationship with neighbouring countries enable[d] Yunnan reach what it is today in terms of growth. A similar growth trajectory is possible for Assam, provided it is replicated here,” he said.