China Factor in India-ASEAN Relations
Mohit Anand and Sandeep Bhardwaj
Research Officers, IPCS
Session I
Chair: Prof. Madhu Bhalla, Head, East Asian Studies, University of Delhi
Speaker 1: Dr. Debashis Chakraborty, Assistant Professor, Indian Institute of Foreign Trade
Speaker 2: Dr. Vibhanshu Shekhar, Research Associate, School of International Studies, Jawaharlal University
Madhu Bhalla
Themes being discussed here cover some of the salient issues facing India in its engagement with ASEAN, which has begun looking at both India and China for reasons significant in the areas of economics and geopolitics. ASEAN has emerged as an important region for India, one where there is tremendous potential for India to successfully utilize its soft power to achieve greater cooperation and integration. There is, however, tremendous scope for India to streamline its integration process in order to effectively realize the potential gains the region can offer.
ASEAN's Economic Relations with India and China: Beyond the FTA's
Debashis Chakraborty
India has begun pursuing a full-fledged regional trading agreements (RTA) approach since 2004. However, India does not stand to gain too much economically from ASEAN-India FTA because of the already low tariff levels maintained by ASEAN with respect to India. Nonetheless, the gains for India have been perceived more in terms of the contribution of the FTA to regional consolidation and concomitant regional peace and security. Being part of an FTA with ASEAN would also offer India greater bargaining power at multilateral negotiations by tying with partner countries through regional commitments.
An important aspect of India's approach towards the FTA is its inclusion of a shorter negative list of goods than China. This element highlights a soft approach followed by India towards the FTA. It is also possible to perceive China's inclusion of a larger negative list as an example of its superior negotiating capabilities as compared to India. Negotiations on the Sino-ASEAN FTA have been much smoother than the India-ASEAN FTA. Further, it is important to note that China's approach towards an FTA with ASEAN includes an emphasis on facing least anti-dumping duties whereas India is imposing greater anti-dumping duties on ASEAN. This highlights a contradiction in the approaches of the two countries. Nonetheless, there is a striking similarity in the approaches of the two countries on non-trade issues.
In the future, gains from the India-ASEAN FTA will be more in the areas of education, movement of professionals, SME products, business services and collaborations and the WTO. India is likely to gain from an integrated production network with ASEAN especially in the automobile industry. India hopes to extend this possibility to other industries and sectors as well. On the other hand gains from the Sino-ASEAN FTA will be from manufacturing, travel and transportation services and integrated production networks of hardware parts.
In the area of infrastructure, India is collaborating with Myanmar extensively to build roads and port infrastructure. This would benefit India by providing greater access to the ASEAN market along with opening up opportunities for the northeast, an otherwise landlocked region. Like India, China too has focused on infrastructure and has common areas of cooperation as listed under India-ASEAN FTA. There is thus to a large extent similarities in the path adopted by both countries to engage in an FTA with ASEAN, with differences arising from the fundamental structural differences in the economies of India and China.
India and China's Institutional Engagements with ASEAN: A Comparison
Vibhanshu Shekhar
The discussion over institutional engagement covers two time-frames. These are - the formative phase (1992-2001) and the Summit Phase (2002 onwards). Three institutional engagements can be identified through which both India and China have been proactively engaged with ASEAN. These are ASEAN Regional Forum (ARF), ASEAN+1 Framework (summit level meetings between ASEAN and India and ASEAN and China), and the East Asia Summit.
Notwithstanding simultaneous entry of India and China into ASEAN, and India's diplomatic edge due to prevailing 'China-threat theory,' China surged much ahead of India both in terms of the nature and level of institutional engagement with ASEAN at the end of the first phase of engagement. China began interacting with ASEAN not only under ASEAN+3 framework but also set up ASEAN+1 summit level meetings in the aftermath of economic crisis of 1997. These two frameworks have facilitated China much greater influence in the ASEAN-centric cooperative deliberations.
The reasons for India's limited engagement with ASEAN can be attributed to India's own national outlook, the domestic paraphernalia, and the strategic resources at its disposal. India's initial engagement with ASEAN was as an economically weak state, strategically insular power, and a government overloaded with bureaucracy. India was not a confident player during the first phase of its engagement with ASEAN, which can be termed as a 'phase of experimentation, confidence building, and learning.' The Indian economic policies were largely protectionist and it failed to offer any viable option in time of economic crisis facing ASEAN in the late 1990s.
It seems that the first phase of learning has paid off during the second phase. India's engagement with ASEAN is much more diverse today. India has become a member of a 16-member East Asia Summit and participates in the annual summit level meetings under the ASEAN+1 framework. Today, India is a more confident multilateral player, a market-driven economy, and willing to take greater initiatives. It seems that the Chinese pre-eminence is also winning India friends. In the ASEAN+1 Framework and the East Asia Summit, there is a greater acceptability from ASEAN for India as a regional player. In essence, the more India improves domestically, the more important stakeholder it will be in the ASEAN-driven cooperative deliberations.
Though the range of India's cooperation with ASEAN shows significant progress during the second phase, India is yet to engage ASEAN as a major power with systemic ambition. First, there are greater degree of efforts by India to deal bilaterally with the nations instead of in the framework of ASEAN. Second, India has to put its own house in order. The time lag and delays in the implementation of the policies indicates a lack of roadmap. Third, the prevailing security mindset also impedes the effective connectivity between the nations. For example, India has to liberalize its visa regime to improve the tourism industry. On the other hand, ASEAN also needs to get its act together. There are several issues, including Open Skies Regime, FTA and Maritime Governance, on which ASEAN is yet to find a collective policy stance.
Discussion
Q. Has India been flexible enough in its FTA Negotiations with ASEAN?
The India-ASEAN FTA negotiation has been a rocky experience that often required political intervention from the top. Though the initial Indian list of 1400 sensitive items highlighted the lack of planning, its eventual scaling down of the list brings forth flexibility shown by the Indian negotiators.
Q. Should India prefer bilateralism over multilateralism?
Ã,
Though India has shown a degree of confusion while participating in the multilateral framework, it should not shy away from such endeavours. Rather India should rather participate more effectively in such deliberations. A close look at the 3rd East Asia Summit reveals that smaller countries like Thailand and Vietnam were much more active than India. India needs to be more active and innovative while taking part in multilateral cooperative frameworks.
Q. What are the components of India's soft power in Southeast Asia?
Ã,
There are three important avenues - education, culture, and multimedia - through which India can make use of its soft power in further broadening its relations with Southeast Asia. China is, of course, increasing its soft power all across Southeast Asia. India, on the other hand, lacks an initiative. The Indian Council for Cultural Relations, which is a nodal agency to project the Indian soft power, has not been able to reach out to wider section of population in Southeast Asia.
Session II
Chair: Mr. R Ravindaran, Chairman, SAEA Group Research Pte Ltd, Singapore
Speaker: Cdr. Gurpreet Khurana, Institute of Defence Studies and Analysis
R Ravindaran,
The rise of India and China is a topic of great relevance not only because of its regional connotations but also because of its implications for the entire globe in terms of what is going to be the role of the two emerging Asian powers in the new global order. The growth of these two giants and their inter-relationship has great implications for the entire Southeast Asian region, given its geographical contiguity to these two powers. But the conclusion that we must reach to is how can the evolving security architecture, whatever it is, bring peace and cooperative prosperity to the region.
Gurpreet Khurana: Sino-Indian Maritime Rivalry in Southeast Asia
The Sino-Indian maritime posturing in Southeast Asia is a component of a larger geo-strategic rivalry between these two powers. Though India and China do not share a maritime boundary, their interests are spreading beyond their immediate periphery to the regional extremities. So, while the immediate security imperative for India lies in Indian Ocean and for China in West Pacific, their strategic spheres of influence have begun to overlap in both these areas.
The Sino-Indian arc of rivalry comprises of three regions - Northeastern Indian Ocean, which includes Bay of Bengal and Andaman Sea, the Malacca Straits and the South China Sea. Southeast Asia lies in the middle of this arc, making the region a concern both in terms of littoral as well as maritime domain. The Northeastern Indian Ocean is important for India because her critical security concern for survival lies here. For China it is vitally important because of its energy imports which are sourced from West Asia and Africa. In the case of a Sino-Indian conflict, China will be highly vulnerable here. Furthermore China's naval presence in this region provides it a significant strategic leverage against India, forcing the latter to resolve the outstanding issues like border disputes. China's defense assistance to Myanmar since late 1980s is very well known, especially building naval facilities all along the coast, including the Coco islands, which is barely 18 kilometers from the northern tip of Andaman Islands. India's upgradation of Myanmar's Sittwe port and its proposal to develop a deep-sea port in Bevai can be considered as India's move to watch over Chinese activities in these littorals.
Second part of the Arc is Malacca Straits, the key choke point passage between the Indian and Pacific Ocean. China's energy supply lines are most vulnerable here. The west-bound shipping of China in this waterway is very important for India to monitor. Sino-Indian rivalry has been going on in subtle and indirect ways. China and India are also subtly contesting for diplomatic influence in this area, which will be of great strategic value. This influence can lead to assurances from the littorals to China that its imports will not be impeded in case of a conflict, while for New Delhi this influence can mean information on China's west-bound naval shipping.
China has maritime boundary disputes with many Southeast Asian countries in the hydrocarbon-rich South China Sea. India has been increasing its naval forays beyond Malacca Straits. In 2000, India held its first ever exercise in South China Sea with Vietnam. In 2005 a joint India-Singapore exercise was also conducted in South China Sea. Events in South China Sea are critical of Chinese security and it believes that it is a revenge of India for China engaging its South Asian neighbors. China also objected to the exploration rights for two blocs given by Vietnam to the ONGC Videsh. However, such moves are only helping in strategic convergence of India and Southeast Asian countries.
In conclusion, the drivers for this Sino-India maritime rivalry are clear. For China it is the security imperative in the Indian Ocean. On the other hand, it is critical for India to balance China's rising power. Not doing so will only curtail its own aim as emerging as a regional power. It would also have serious ramifications on India's national security.
Discussion
Comment: China's String of Pearls Strategy is a result of India's own failure and an over-hyped threat perception
The Coco Islands was given by India to Myanmar. Now to say that China is building a String of Pearls is stating the obvious. India would have done the same had its energy lines been coming from Japan.
Since the beginning of 1990s there were several reports indicating that Chinese presence in Malaysia and Coco Islands is a threat to India. These reports, since then, have been proved to be false. However, the potential remains there, not only for Myanmar but for other pearls of the string also. For example, Gwadar Port in Pakistan has the greatest potential to be used in a manner inimical to India.
Q. Should China and India focus on cooperation than rivalry?
Ã,
Both India and China's rise basically depends on economic growth, which have forced them to look for resources beyond their borders. The mutual hunger for resources is going to make the relationship more competitive at least in the medium-term timeframe. In fact, India is now also seeking its energy resource from Sakhalin in Russia leading it to the same situation as China is in. The long-standing boundary issues further complicates the relationship.
Q. Can India contribute to the maritime governance in Malacca Straits?
Ã,
The maritime governance is basically what the navy calls maritime domain awareness. India's security is linked to the Malacca Straits in terms of low-intensity conflicts like gun running and piracy. The northwest entrance to the straits is essentially Indian waters. So, any exchange of information regarding shipping with involved littorals will be of considerable help in terms of maritime governance. In fact, there is no need for physical patrolling of the Malacca Straits by the Indian navy; all it needs to do is grid the communication networks with other countries.
http://www.ipcs.org/article_details.php?articleNo=2752