India-ASEAN Relations.

ajtr

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With increase in volume of trade and close defence related relationship with ASEAN countries .it deserve a separate thresd.so mods can make this as sticky.

The Indo-Vietnamese Strategic Partnership.

Over the past year, a chill wind has been blowing over the South China Sea, and the waters lapping the coast of Vietnam have grown choppy with tension. A distinct increase in the level of Chinese assertiveness in the region has led to multinational companies being pressured out of participating in offshore energy ventures with Vietnam, to the routine rounding up of Vietnamese fishermen by Chinese patrol vessels for ‘fishing in Chinese waters’, as well as to a steady ramping up of Chinese naval activity which has, in some instances, led to tension-fraught stand-offs with the US Navy.



This upsurge in Chinese naval self-confidence has sent ripples of unease across Southeast Asia, and most particularly in Vietnam, which has been embroiled in a bitter territorial dispute with China over the possession of the Spratly and Paracel islands for several decades. Vietnamese officials, when in private, frequently lament what they perceive to be Vietnam’s relative isolation on the diplomatic scene, and fear for the future. When discussing these issues recently in Paris with someone with close ties to the Vietnamese leadership, I was issued with the following dire prediction: “We think that the Chinese will press for a final resolution of the sovereignty dispute over the Spratly and Paracel Islands in the next ten to twenty years. If Vietnam has not reinforced its strategic partnerships by then, while simultaneously strengthening its Navy, China will be able to just seize the islands without anyone abroad lifting a hand in protest or even batting an eye-lid. ”

Vietnamese dignitaries seem to believe that their window of opportunity to press an advantageous deal with China is rapidly closing and this has instilled their military diplomacy with a new sense of urgency.

Having taken tentative steps to reinforce its ageing and minute fleet, most notably by ordering a flotilla of six Kilo-class submarines from Russia, Hanoi has also been endeavouring to reinforce its defence ties with several other regional powers such as Singapore, Japan, Australia (which Secretary General Nong Duc Manh paid visit to only a few weeks ago) and India.


A Partnership Grounded in History:


Vietnam’s relationship with India goes back a long way. Indeed, one could say that India, along with ex-Soviet Russia, has been one of Vietnam’s staunchest allies over the years. The Indian Prime Minister Jawahrlal Nehru was the first foreign leader to visit the newly independent North Vietnam in 1954, and throughout most of the Cold War, India and Vietnam were strong political allies. Both had very close ties to the Soviet Union, and both bore the brunt of Chinese border invasions; India in 1962, and Vietnam in 1979. India’s support of Vietnam during the Vietnam war and during its invasion and occupation of Cambodia in the 1980s came at a high political cost, injecting bitterness into Delhi’s difficult relationship with Washington, as well as delaying the process of Sino-Indian normalisation by almost a decade. In return, Vietnam supported India in its conflicts with Pakistan, and was one of the first countries in the world to recognize newly independent Bangladesh in 1971.


The Indo-Vietnamese relationship throughout the Cold War, however, remained mostly diplomatic and political in nature. Bilateral trade was minimal, and the security component of their rapport limited itself, by and large, to information sharing protocols. It was only with the profound restructuring of Asia’s security environment at the end of the Cold War, and the advent of India’s “Look East Policy” in the early 90s that the relationship gradually evolved into a genuine strategic partnership.


The Burgeoning of a Wide Ranging Strategic Partnership:


The abrupt disintegration of the Soviet Union at the end of the Cold War had an enormous impact on both countries’ diplomacies. Almost overnight, both Hanoi and Delhi lost their most reliable strategic guarantor in Asia. Both countries reacted to this radically new security environment by opening up to the world, liberalizing their economies, and taking steps to normalize their relationships with their neighbours, while making an effort to diversify their strategic partnerships. The end of Vietnam’s occupation of Cambodia facilitated its integration into ASEAN in 1995, and in the early 90s India launched what it termed its “Look East Policy”, which heralded a new era of engagement,both diplomatic and economic, with Southeast Asian nations.

It was only with the advent of an intensely nationalistic government in Delhi in the late 90s, however, that bilateral ties began to really pick up speed and take on a genuinely strategic turn. With the nuclear explosions of Pokhran II, in 1998, the BJP governement of Atal Behari Vajpayee signalled to the world, and more particularly to China, that India had become a hard power to be reckoned with.Vietnam, for its part, was intent on extricating itself from an excessive dependence on its timeold Russian partner in terms of both arms procurement and military-to- military diplomacy .Leaders from both countries also recognized that, despite significant progress in their relations with Beijing, both India and Vietnam still share a natural strategic congruence on the need to restrain China.


Since 1998, both countries have thus been steadily shoring up their ties, whether it be on the military or on the diplomatic front.

Vietnam has come out in support of India’s bid for a permanent seat at the UNSC, has lobbied in favour of India’s presence at the first East Asian Summit in 2005, and helped block Pakistan’s inclusion in the ASEAN Regional Forum. India, in return, was in favour of Vietnam’s accession to the World Trade Organization, and helped Vietnam secure a temporary seat at the UNSC in 2007. Bilateral trade has also grown extremely rapidly, surging from little more than 72 million dollars in 1995 to more than two billion in 2008. Indian multinationals such as Tata Steel and ONGC Videsh Limited have started to heavily invest in Vietnam, in what many hope is just the beginning of a new trade pattern in Asia.


The aspect of the Indo-Vietnamese partnership that has known the most progress, however, is on the military one.

Strategically placed on the eastern fringe of Southeast Asia, Vietnam is viewed by India as the main obstacle to China’s southwards expansion. Much as China has attempted to constrain India by forming a military nexus with Pakistan, New Delhi has been involved in defence cooperation with, and provided military assistance to its rival’s smaller, militaristic neighbour.

In 2000, George Fernandes, the BJP government’s Defence Minister signed a 15-point Defence Protocol with Vietnam, which promised to provide Vietnam with assistance in the modernization of its armed forces and to intensify defence cooperation between the two countries. Three years later, India and Vietnam stepped up their military cooperation by signing a “Joint Declaration and Framework of Comprehensive Cooperation between the Republic of India and the Socialist Republic of Vietnam as they enter the 21st century.” In 2007, this was followed up by a formalized Strategic Partnership.

India has been providing Vietnam with assistance in the shoring up of its naval and air capabilities in an attempt to deny China total supremacy in the South China Sea. This is greatly facilitated by the fact that Vietnam’s Air Force and Navy’s military hardware have the same Russian origin as their Indian counterparts, which has enabled the Indian armed forces to frequently help their Vietnamese partners overcome their operational difficulties by supplying them with spare parts and by providing advanced repair and maintenance services. New Delhi has repaired and upgraded 125 Mig 21 planes of the Vietnamese Air Force, and supplied them with enhanced avionics and radar systems. Indian Air Force pilots have also been training Vietnamese fighter pilots, and in 2005 the Indian Navy dispatched more than 150 tonnes of spares to Hanoi for its Russian Petya and OSA-11 class missile boats. The Indian and Vietnamese coast guards have engaged in joint patrols, and both navies participated in a joint exercise in 2007.


Indo-Vietnamese military cooperation also extends to their respective ground forces; as both countries have engaged in joint exercises, and Indian army officers have benefited from Vietnamese expertise in jungle warfare and counter-insurgency.

In return, the Vietnamese have been supplied with advanced light helicopters (the Indian made AHLs) at “friendly prices”, and Vietnamese officers have been provided with English lessons at an Indian Language Institute.


A Feeling of Unfulfilled Potential:


Despite all this, there is a feeling, both in India and in Vietnam, that the partnership is far from having achieved its potential, and, what’s more, has started to lose its momentum.

Hanoi has been particularly disappointed in India’s unreliability as a weapons procurement partner. Although India has engaged in some token efforts to help modernize Vietnam’s military, the Vietnamese are frustrated by the fact that New Delhi seems so reticent to supply it with some of the missile systems it had initially promised. Indeed, in 2000 and at several occasions during the BJP governnment’s tenure, India had vouched that it would gift Vietnam with the Prithvi and BrahMos missile systems. The Prithvi is an SRBM (Short Range Ballistic Missile), with a maximum range of approximately 200-350km,whereas the BrahMos Cruise Missile, co-produced by the Indians with the Russians, is a very advanced anti-ship missile, based on the Russian Yakhent anti-ship missile, which has a range of more than 300km and that can fly at more than twice the speed the sound. If the Vietnamese Navy were to acquire such a weapons system, it would prove to be a major challenge to Chinese naval dominance in the South China Sea, and greatly aid Vietnam in its strategy of sea denial and coastal defence. Various theories have been put forward to explain India’s failure to provide Vietnam with the Prithvi and BrahMos. Some claim that India’s Congress government, which has increasingly focused on economic rather than military cooperation with Vietnam, does not want to run the risk of antagonizing China. Others blame it on traditional Indian bureaucratic sloth or have stated that, in the case of the BrahMos, it must first be fully inducted into the Indian Armed Forces before a surplus can be generated for friendly states such as Vietnam. Most analysts concur in saying that Vietnam will probably obtain the Prithvi system in the long run. When it comes to the vaunted BrahMos, however, things are far from certain.


It is believed that frustration at this, as well as at successive delays in amrs deliveries, is what led the Vietnamese Ministry of Public Security to purchase sub machine guns and sniper rifles from Pakistan in 2007, in a veiled but nevertheless significant expression of its displeasure. The Indians for their part, are somewhat disappointed that the possibility of the Indian Navy gaining permanent berthing rights at the Vietnamese deep sea port of Cam Ranh Bay now seem to be increasingly remote. While the Vietnamese aired this possibility at the turn of the century, Vietnamese Foreign Minister Nguyen Dy Nien declared in 2004 when questioned on the matter that Cam Ranh was “no longer a military port”. Most analysts now concur in viewing Cam Ranh Bay as Vietnam’s strategic trump card, that it occasionally brandishes to balance China, but that it will most probably refuse to give up to a foreign power, unless it is compelled to in extreme circumstances.


Things are also far from perfect on the economic front. Indeed, while bilateral trade has grown substantially over the past decade, it is also increasingly unbalanced in nature, with Vietnam suffering from a crippling one billion dollar trade deficit with India. As a net benificiary of this imbalance, India has politely brushed aside the Vietnamese proposal to establish an FTA and has refused to grant tax reductions and exemptions to Vietnamese products.


An Uncertain Future:


While it is clear that ties in-between India and Vietnam have strengthened over the past few years, particularly in the field of defence, it is equally apparent that for it to endure it needs to be put on a more equal footing.

India should consider lowering its trade tarriffs and opening its markets to some Vietnamese products, and should encourage more Indian companies to invest in Vietnam. Indian policy makers that hesitate to provide Vietnamese ships with BrahMos cruise missiles should maybe wonder whether China was beset by the same moral qualms when it supplied Pakistan with its first state-of-the-art F-22P frigate this summer.

Last but not least, the future of the Indo-Vietnamese partnership will increasingly depend on both states’ attitude towards China. India’s Congress government, which has generally shown a slightly more conciliatory attitude towards Beijing than its BJP predecessor; is currently facing renewed tensions along its 4,057 km with China. It may not wish, therefore, to durably aggravate its transhimalyan neighbour by strengthening the military facet of its ties with Vietnam.

Vietnam’s leadership, for its part, is currently riven by factional in-fighting as a prelude to the 11th National Congress in 2011. The recent crackdown on nationalist Vietnamese bloggers and journalists seems to indicate that the China-aligned fringe of the Party, which controls domestic intelligence gathering via the military intelligence unit General Department II, is gradually gaining ascendancy in the struggle in-between conservatives and liberals. If the pro-China conservatives win this subterranean battle for power and influence, it will undoubtedly have a highly negative impact on the Indo-Vietnamese partnership.
 

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A brilliant espousal of Asia-centric world economic architecture

Looking East to Look West: Lee Kuan Yew’s Mission India; Sunanda K Datta-Ray, Penguin Books, Pp 384, Rs 499.00

SINGAPORE is a tiny dot on the map of South East Asia; it is a city state which separated from Malaysia and has its own distinct identity. It is strategically located. It is the first stop eastward on the road from India to the United States which will explain the title of the book. India and South East Asia are connected "integrally in their political, social and economic life".

Singapore was administered from Calcutta between 1819 and 1867. It has been in the past spelt as Sinhapur -Lion City -or just Singapur, which is the same thing. Singapore is in fact becoming the new United States for Indians, with this difference: while only top and professionals go to the United States, Indians from both extremes of the social spectrum can be found in Singapore and, importantly, it is not resented by the local people. The city’s former Prime Minister, Lee Kuan Yew’s standing invitation to India is that it should treat Singapore as the hub of its interests and activities in the region. He has, according to Sunanada Datta-Ray, "never wavered in his conviction that South East Asia needs India to cope with China" -and a greater tribute to India cannot be expected from anyone.

India, a huge country and Singapore, only a city state, nevertheless have much in common. Both are multiracial, multi-religious, multi-lingual democracies, members of the Commonwealth, non-aligned and G-77 Clubs. Lee is firm in his belief that India’s cultural heritage is "still glowing like a jewel in Malayam folklore, language, customs, court trials, dance and music". What is even more fascinating is that the former Prime Minister, an ethnic Chinese born of immigration stock and not a natural heir to the Suvarnabhoomi tradition, should so ardently court India.

There is so much Indian influence in Singapore and Malaysia that it comes as a pleasant shock. Once there was a street in Singapore called Kling Street. It turns out that the word ‘Kling’ came from Kalinga. Another street is named Chulia Street. ‘Chulia’ is derived from ‘Chola’, the Tamil dynasty. For more than 2,000 years words of Indian origin have been insinuating themselves into the Malayam language. Lee has visited India some eighteen times and he has been quoted as saying: "The Indians are my friends and I stand by them". Despite all that, India for years seemed hesitant to help Singapore in its security concerns. Lee always wanted India to assume a role as "guardian of South East Asia" and he once told journalists that India would be the power to enforce a "Monroe Doctrine for Asia" because it has been following a foreign policy "on the basis of equality and not on a basis of power relations". That is another tribute to India which, unlike China, has never had imperialist ambitions. This is what is rally intriguing.

Poor Lee during his Prime Ministership and even after trying to persuade one Indian Prime Minister after another to help protect Singapore because it is "the only possible Asian power that has the potential to stabilise the region against China and the Communists" did not succeed. Why? Because India does not want to take responsibility for the safety of another state, especially a small one which is easily susceptable to attack as was evident when Japan, during World War II sought to do? No explanation has been given. China would be only too glad to take Singapore over. In such matters it has no scruples. In such circumstances, why is India hesitating to stand guarantee to Singapore’s freedom? Because it may cost India more than it can afford? Singapore is the gateway to the East and thereafter to the West. India must safeguard Singapore’s interests against hegemonic-minded predator countries.

This book is about the tremendous-and often main-efforts made by Lee Kuan Yew and his contemporaries and later, followers in the Prime Ministerial chair, to interest Indian leaders in Singapore. Happily, it seems, things are improving. India must invest heavily in Singapore. It would appear that now as many as 300 Indian IT companies have already set up software development operations in Singapore where about 1,500 Indian companies already have bases. Through the help and good offices of Singapore one believes India has now linkages with Myanmar and Thailand by way of a trilateral highway project.

India must re-establish its ancient cultural affiliations-in contrast to China’s imperial aggressiveness-with South East Asia. Thailand calls itself Suwanna phome, a word derived from Suvarnabhoomi. To the people of Laos the land is Suwannaphong! The word ‘Mekong’ is an apabramsh (distortion) of Mahaganga. In such a context India must welcome South East Asia’s warm invitation to be part of it. Geopolitics demands it and China’s imperial aggressiveness makes it a necessity.

Sunanda Datta-Ray has done service to India by providing us the background to South East Asia’s needs. Of course, Lee has pointed out that "future mingling" between India and South East Asian nations will not be the same as in ancient times, which is understandable and obvious. History does not repeat itself. But considering that China is rapidly increasing military and maritime links with countries like Myanmar, Bangladesh, Sri Lanka, Maldives, Seychilles, Mauritius and Madagascar, India must not hesitate to strengthen its ties with Singapore, Malaysia, Thailand, Vietnam, Cambodia and, of course, South Korea, Japan, Indonesia and Australia. China should not be allowed to bully any country the way it has been trying to bully India on the Arunachal Pradesh issue.

Datta-Ray quotes Lee as saying: "As the Indian economy revives and opens up to the globalised world, India’s impact on the region and the world will grow... India’s engagement with the region has been episodic after World War II. Singapore will continue to facilitate India’s links with the region. It is in Singapore’s interest that India succeeds and deepens it engagement with ASEAN." That, indeed, is the theme of this book. Datta-Ray has used Lee to make a point that has long needed to be made. There is no need for India to be confrontationist in its deals with China but China must be given to understand that in cooperation with India lies the prosperity of both. As Lee has put it bluntly, if confrontation is avoided India and China can together regain 45 to 50 per cent of the global gross domestic product they enjoyed before the West’s Industrial Revolution stole a march on Asia. They are words of wisdom. But is Beijing listening?
 

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Malaysia expects 650,000 visitors from India in 2010

Following a 7.1 per cent growth in revenues from Indian tourists in 2009, Malaysia expects 650,000 visitors from India this year.




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"We grew from 132,127 visitors from India in 2000 to 550,738 in 2008 and over 589,838 in 2009, which is an annual growth rate of 25 per cent each year for a decade. Tourism Malaysia has a set a target of 650,000 visitors from India in 2010. This represents a growth of 10 per cent over 2009. The focus also includes increasing room nights. Besides, the tourists' receipts have increased from 1496.1 Ringgit Malaysia (RM) million in 2008 to 1601.8 RM million in 2009. We expect an increased growth this year," Dato' Mirza Mohammad Taiyab Beg, Director General of Malaysia Tourism said at a press conference in Ahmedabad today.

The total number of global visitors to Malaysia was 22,052,488 tourists in 2008 as compared to 23,646,191 tourists in 2009, with tourism reciepts of 49561.2 RM million in 2008 to 53362.7 RM million in 2009. However, the year-on-year growth in tourist arrival from India was 30.4 per cent in 2008 as compared to 7.1 per cent in 2009.

India is one of the top five ranked markets for Malaysia and is just below China in the non surface markets category.

According to Dato' Mirza, the profile of tourists from India too has been changing rapidly with almost 50 per cent tourists being in the age group 25 to 34. "From the initial family holiday for two nights to Kuala Lumpur, the destination has grown to 6.6 room nights average stay per person in 2009. This means Malaysia has graduated from being just a shopping stop that is part of a package tour to being a multi-location destination. In addition, over 25 per cent of the tourists from India to Malaysia are repeat visitors. Almost 50 per cent of Indians visiting Malaysia are between the age group 25 to 34. These travelers are conscious of a budget, but have an agenda. The Indian outbound tourists especially youngsters are evolving. Besides, we provide an ideal shopping destination, a vibrant night life and there is lots for adventure tourism, ecological tourism, etc which caters to the youth. We have a number of tourists who visit Malaysia as a part of their honeymoon travel. Especially the exotic beaches like Redang, Langkawi, Penang, Cameroon Highlands, etc are a perfect honeymoon destination,," Dato' Mirza added.

Malaysian Tourism expects a year-on-year growth of 15-20 per cent for the next five years. "With the advent of Air Asia as a carrier from select cities (Kolkatta, Cochin, Trichy and Trivandrum at present, and with plans to commence Mumbai, Delhi and Bangalore in the near future), and Malaysian Airlines flying a daily service from five cities, we expect a growth of 15 to 20 per cent," Dato' Mirza said.

Keeping the Indian tourist in mind, Tourism Malaysia has developed an integrated plan to showcase newer locations like Kuching, Taman Negara, Johor Baru, Cameroon Highlands, Kota Kinabalu, Kelantan, Terengganu, Redang, Pahang, Perak, and Malacca.
 

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To Stir With Love: Indonesia needs India, but India also needs Indonesia

"Indonesia is grounded in India. The Mahabarata and the Ramayana originated here. There is no doubt that India has an impressive cultural background. It is a cultural superpower".

Andi Ghalib, Indonesia's ambassador to India, sips on hot tea and chats about his time in India, a country where "unity in diversity" is stretched to the absolute limit.

With almost two years of ambassadorial duties under his belt in New Delhi and a hectic schedule of duties at that, he has seen a generous chunk of Indian life, at a time when India is beginning to sparkle like the legendary Koh-i-noor diamond.

I wanted to glean the ambassador's impressions of India; the differences between Indonesia and India and what India means for Indonesians and vice versa.

We are sitting in the uber-modern Meridien Hotel cafe in New Delhi, sipping on rainbow-colored juices and eating Caesar salad, pondering over the beauty and the beast that is India.

As A.A. Gill states, "Always in India you're confronted with these juxtapositions of wealth and poverty; power and hopelessness; of sublime beauty and shocking ugliness. Everywhere you look there is binary metaphor, an encyclopedia of contradiction, dichotomy and counterpoint".

"India is one of the fastest growing economies in the world. It is the largest democracy after the United States. Indonesia is the third."

Well-dressed businesspeople surround us while we converse. There is no colonial d*cor at the Meridien. Muted shades, old-fashioned teacups, faded photos of Maharajas on the walls, even cucumber sandwiches have no place here.

The message is modern. India, the face of the future. Low-fat starred meals for the weight-conscious waif are featured on the menu alongside a selection of eclectic and global culinary creations.

Smart waiters dressed in black glide between the tables with the confidence of a "fast-bowler" cricketer. Elegant young Indians and other glam folk sip on chilled wine and cocktails and chat in that "loads of money" kind of way.

Deals are being clinched as we speak. Outside the lobby, impressive five-star cars zoom in and out, dropping off equally impressive guests.

"It is predicted that India will take over the world economy by 2050. Our target of trade between India and Indonesia for 2010 was reached before the end of 2009. We are very proud of this achievement."

The ambassador's role is not only to represent Indonesia in India but also to increase the level and intensity of bilateral relations and cooperation between Indonesia and India.

"What does this mean for Indonesia? " I asked curiously.

"As the world's fourth-largest population, Indonesia needs to cooperate with India."

"How is this going to happen?" I ask, in between marveling at the glorious dressing of the Caesar salad.

"India and Indonesia need to explore their capabilities by collaborating. India holds a very important position in the world economy and Indonesians need to see this and change their way of thinking about India. But India also has to change their view of Indonesia. Indonesia needs India, but India also needs Indonesia. You can't clap with one hand!" he chuckled, throwing his hands around in a loose, somewhat awkward, demonstration.

So what do you think of India, I asked.

"I am very impressed. I have visited and met with leaders of almost 20 states in India, more than half the country. I intend to meet with the rest of the states and union territories by the end of next year, if possible. I like to see the cultural movement of the people."

And what about the food, I asked, thinking dreamily about dosas, idlis, mint chutney and naan. Can you imagine a life without Indian food or the UK without Rogan Josh?

"I like the food. There is a lot of variety, especially between the cuisines of the north and south. But then my background is in the military so I can eat anything!" More laughing followed while I ponder over this statement.

What are your thoughts about Gandhi, I continued. I am a huge fan of Gandhi and his presence in India is felt everywhere.

Quotes such as "an eye for an eye will only make the whole world blind" and countless others are plastered on walls.

His image is seen on every rupee, buildings, just about everything. The photo of Gandhi spinning cloth or home-spinning is one of my all-time favorites.

Albert Einstein's memorable tribute to Gandhi sums up his grandeur: "Generations to come, it may be, will scarce believe that such a one as this ever in flesh and blood walked upon this earth."

"Gandhi is very important for the people of India. I believe he is part of the success of India now. He is the symbol of the nation and they all respect him."

"So why do you think Indians are so successful?"

"No matter where you are in the world you will always find Indians *and Germans, I thought to myself*. They speak English, read English and are well-educated. If they go abroad, they never forget their country. Their national pride is high. Nowadays, Indians are taking up all the top positions in the world."

An hour or two later, we pulled out of the Meridien into the dusty, wide streets of this bustling town. We pass a few equally dusty small children begging cheekily at the traffic lights, streams of people walking or on bicycles, India's own car, the Ambassador, vying for a place amid Mercedes and other vehicles.

We stop at the lights and there is a tap at my window. "Would you like to buy a book, madam?" and the seller presents we with a pile of Booker Prize-winning novels and other best sellers. The authors, of course, are Indian.

"How about this one?" he hands me The White Tiger by Aravind Adiga. Ah, there is more to India than meets the eye.
 

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India-ASEAN FTA: Implications for India's NorthEast

Abstract

Expectations run high after the successful conclusion of the India-ASEAN FTA negotiations that had been dragging on for years. Considering the total population of India and the ASEAN countries, the volume of trade between them, the enormity of their GDP and the imagined potentialities, this FTA could certainly be a major agreement between two emerging Asian economic powerhouses.

But what happens to the long-neglected India's Northeastern states in the wake of such an important agreement? What are the prerequisites needed to accentuate this important FTA in relation to these Indian states? Will this region benefit much from it since it shared a 1643 km long border with Myanmar?

Or will it be yet another hyperbole judging by the past agreements, plans and proposals for development, progress, trade and investments that had conveniently eluded these states? This paper investigates the AIFTA and the circumstances related to its conclusion and delve into the implications it could have on the north eastern states of India.

The paper surmises that unless the whole economic, political and security structure and the whole network of transport and communication facilities are rethought, revamped and redeveloped, this FTA will become just another statistics for the people of India's Northeast.


Introduction

India and the Association of Southeast Asian Nations (ASEAN) have concluded negotiations for a Free Trade Agreement (FTA) after years of difficult negotiations. This agreement will be signed into a treaty at the India-ASEAN Summit to be held in Bangkok on December 2008 and will come into force from January 1, 2009 if everything goes as planned.

Expectations from the India-ASEAN FTA are high. The Joint Media Statement of the Sixth ASEAN Economic Ministers (AEM)-India Consultations stated that "the AIFTA could be a major avenue in harnessing the region's vast economic potentials towards sustained progress and improved welfare not only for ASEAN and India but for the greater East Asian region as well."[ii]

The India-ASEAN FTA is the result of many international and domestic factors. On one hand, the trend of international regionalisation and the proliferation of FTAs and the failure of the Doha round of multilateral talks to yield concrete results led both India and the ASEAN countries to consider alternative solutions towards freer trade. On the other, the adoption of policies by India and ASEAN to develop better cooperation with their immediate neighbours in recent years has helped accelerate this negotiation.

In this context, India's Northeast came to be seen in a new light. Several steps have been taken to improve relations with India's immediate neighbour Myanmar. India has also trade relations with Thailand and Singapore. India and Myanmar shared a 1643 km long border. Myanmar being a member of ASEAN, the north eastern states of India become an important link between the two parties.

This paper is an attempt to analyse what forebode India and its Northeast states in the light of the much-hyped India-ASEAN FTA. It will start by looking into the relationship between India and ASEAN and culminate with the present agreement.

After that, the paper will analyse the implications the AIFTA can have on the north eastern states of India. It will, however, not delve into the security-insurgency dimension that has almost become an anthem for most writers on north eastern India except in giving some passing remarks.

It will, instead, try to highlight the many projects, plans and proposals that has been undertaken in the north east during the past few years and explore possible opportunities, problems and solutions for this region and for the FTA.

India and ASEAN: Shared ties, divergent policies and convergence?

Although India and ASEAN countries have shared cultural and historical ties, India's interactions with ASEAN countries was quite limited during the Cold War as the two pursued policies which were not very conducive to deep rooted interactions and commitments to each other.

Soon after the end of the Second World War, India championed the process of decolonisation and drew recognition and appreciation from different parts of the world. It became one of the founding members of the Nonaligned Movement (NAM). Even though Indonesia was also a member of NAM alongside India, this relationship did not extend beyond that.

The arrival of bipolar politics in Southeast Asia, the Vietnam crisis and India's close ties with the Soviet Union led to the adoption of divergent policies by both India and ASEAN. ASEAN was formed in 1967 during the Vietnam War primarily to diffuse regional conflicts and to promote better relations between members.

Communist victories in Vietnam, Laos and Cambodia soon worsened the already fragile security situation of Southeast Asia. Thus by 1976, ASEAN was forced to contemplate to become an association with security as its main concern. The reunification of Vietnam and the Vietnamese invasion of Cambodia created another security dilemma.

While ASEAN chastised Vietnam, India supported Vietnam. ASEAN's suspicions of the Soviet Union and the paranoia it had with anything communist led many, including India, to regard ASEAN as allies of the capitalists or a pro-American bloc. Suspicion was so high during this time that India refused to hold dialogues with ASEAN twice in 1975 and 1980.

But with the end of the Cold War, interactions between India and ASEAN became more frequent; and relations between the two began to improve at a very fast pace. Following the end of the Cold War and the collapse of the Soviet Union, India began to adopt liberalisation policies.

Meanwhile, ASEAN had also emerged as an important regional organisation with great potentials and opportunities for growth. The transformation of the international system and new outlooks led to the adoption of the Look East Policy by India. When India initiated its Look East Policy in 1991, it marked a strategic shift in its foreign policy and perceptions towards its eastern neighbours.

ASEAN's strategic importance in the larger Asia-Pacific region and the potentials it has in becoming India's major partner in trade and investment also added an impetus to India to develop closer ties with it.

In addition, considering that the proposed South Asian Free Trade Area (SAFTA) is unlikely to produce any solid outcome, this policy shift and agreement on the part of India is as strategic as it is important. The Indian Prime Mister Manmohan Singh commented thus, "This was not merely an external economic policy; it was also a strategic shift in India's vision of the world and India's place in the evolving global economy. Most of all it was about reaching out to our civilizational neighbours in the region." [iii]

In continuance of India's Look East Policy, the process of interregional cooperation was institutionalised with India becoming a sectoral dialogue partner of ASEAN in 1992; a full dialogue partner in 1995 and member of the ASEAN Regional Forum (ARF) in 1996.

India became a summit-level partner of ASEAN in 2002 and concluded the ASEAN-India Partnership for Peace, Progress and Shared Prosperity in 2004.

India also became engaged in regional initiatives such as the Mekong-Ganga Cooperation (MGC) and the Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation (BIMSTEC). India has now become a member of the East Asia Summit (EAS) since December 2005.

The deepening of relationship between India and ASEAN is reflected in the buoyancy of trade figures between the two. During April-September 2007-2008, trade grew from US$ 15.06 billion to US$ 17.02 billion, that is, trade grew by 13 per cent. India's Foreign Trade with ASEAN, according to the Directorate General of Commercial Intelligence and Statistics (DGCIS), is also on the rise.

During the period 2005-2006 to 2006-2007, India's exports to ASEAN registered a growth rate of 20.67 per cent. Similarly, India's imports from ASEAN during the same period registered a growth rate of 66 per cent. India-ASEAN trade stood at US$ 38.37 billion in 2007-2008 and is projected to reach US$ 48 billion during 2008-2009. [iv]

At the first India-ASEAN Summit held at Phnom Penh on November 5, 2001, India called for an India-ASEAN FTA within a 10-year time frame. In this context, the second India-ASEAN Summit held at Bali on October 8, 2003 was a significant landmark in India-ASEAN relations. This Summit saw the signing of the Framework Agreement for Comprehensive Economic Cooperation between India and ASEAN.

This agreement envisaged the establishment of an FTA within a period of ten years. In March 2004, an ASEAN-India Trade Negotiations Committee (AI-TNC) was established to negotiate the implementation of the provisions of the Framework Agreement. India has, since then, entered into numerous agreements with ASEAN.

At the sixth India-ASEAN Summit held at Singapore on November last year, India proposed to increase its bilateral trade with ASEAN to the tune of US$ 50 billion by the year 2010. The latest agreement is therefore, the result of many years of tactful policies that led to the thawing of the ice between these two important emerging economic powers in Asia.

In addition to these agreements with ASEAN, India has also made consistent efforts to develop bilateral ties with ASEAN members. With Thailand, India has 61 years of diplomatic relations. India also has a Free Trade Agreement with Thailand that was signed in 2004. The framework agreement on bilateral FTA of 2003 was the basis of this FTA with Thailand. Trade between the two increased from a mere US$ 606 million to US$ 3.14 billion in 2006-2007.

With the CLV countries (Cambodia, Laos and Vietnam), India entered into a number of bilateral agreements for cooperation in the fields of trade, science and technology , agriculture, defence, visa exemption, tourism, IT and culture. India has major projects in the fields of education, entrepreneurship development and IT in these three countries. In 2004, India extended a credit line of US$ 27 million to Vietnam.

Malaysia is a major source of Foreign Direct Investment (FDI) for India, particularly in the areas of LPG, power plants and highway constructions. Trade between the two rose from US$ 2.2 billion in 2002-2003 to US$ 6.6 billion in 2006-2007. Indian public sector undertakings such as BHEL and IRCON have also undertaken and completed a number of projects in Malaysia.

Presently, after the India-ASEAN FTA negotiations, it is reported that about 150 Indian engineering firms are eying to diversify their export base in ASEAN markets and are planning to make Malaysia the regional hub to penetrate the region.[v] Many of these companies are exploring the possibilities of joint ventures, technology transfers and investment opportunities.

It was mainly because of the insistence of Indonesia that India became a part of the East Asia Summit in 2005. Relations between the two had been very good for many years. Bilateral trade between the two increased by 44 per cent from 2005-2006 to 2006-2007.

India has a Comprehensive Economic Cooperation Agreement (CECA) with Singapore since 2005. This agreement included bilateral investment promotion treaty, double taxation avoidance agreement, an air services agreement and an FTA. Singapore, along with Indonesia had been an important factor for India's inclusion into the East Asian Summit.

In addition, it was Singapore's role that paved the way for India's association with the ARF. Singapore is the biggest source of FDI for India among ASEAN countries. During the period 2000 to 2008, the cumulative FDI of Singapore into India was worth a whooping US$ 4.35 billion. Concurrently, over two thousand Indian companies were based in Singapore.

India also has plans for a free trade area with Brunei, Indonesia and Malaysia by 2011 and with the remaining ASEAN countries by 2016. Since 1995, India had actively engaged Myanmar in trade. It has signed several agreements and MOUs including the Tripartite Maritime Agreement with Myanmar and Thailand, Border Trade Agreement and for cooperation between civilian authorities between India and Myanmar.

Since 2000, a number of high level visits have taken place. During these visits, several agreements and MOUs have been signed in areas ranging from hydroelectric projects on the Chindwin River and IT cooperation to cultural exchange programmes.

In the year 2003 alone, seven Agreements/MOUs were signed to promote trade and communication facilities. By 2006-2007, bilateral trade between India and Myanmar reached US$ 650 million as compared to US$ 341.40 million in 2004-2005.

India-ASEAN FTA, Look East Policy and the Northeast

The announcement came after the conclusion of the 6th ASEAN AEM-India Consultations held at Singapore on 28 August 2008. The text of the India-ASEAN Trade in Goods Agreement will be finalised before the India-ASEAN Summit to be held in December 2008 at Bangkok where it will be formally signed into a treaty and will come into force from January 1, 2009. This Summit will be attended by the Indian Prime Minister Manmohan Singh.

This agreement, it is expected, will bring a free trade regime to about two billion people from 11 countries with a combined GDP of $2,381 billion as of 2007. The agreement covering billions of dollars in trade in goods but not in services was supposed to have been concluded last year but talks were bogged down because of differences over products that India wanted excluded from tariff cuts.

India had submitted a list of 1,414 products but ASEAN's target was only 400. In the end, the agreement permits India to have 489 products in the 'exclusion list' and 606 sensitive goods that will come under partial duty reductions.

This agreement is to be viewed against the backdrop of the long drawn-out Doha round of multilateral talks. As the Doha talks continue to drag on, this agreement between India and ASEAN can be seen as a natural course of action for countries refusing to entangle themselves in the protracted Doha round of talks. This agreement, along with the comprehensive FTA between ASEAN, Australia and New Zealand (AANZ FTA), became the first major trade agreement in the post-Doha era of trade policy negotiations.

The India-ASEAN FTA is also the result of recent changes in ASEAN's policy towards its immediate neighbours and other important trading partners all over the world. In recent years, ASEAN has been involved with its major trading partners in concluding FTAs.

In 1999, the ASEAN+3 [vi] was formed for the establishment of a common market and a currency. China was the first to conclude an FTA with ASEAN followed by Japan and South Korea. The present FTA between India and ASEAN, and the AANZ FTA completes this trend. ASEAN will now be able to strike a fine balance in trade among its immediate neighbours.

The India-ASEAN FTA also needs to be viewed in the broader context of global trends towards regional or bilateral trading arrangements (RTAs/FTAs). Out of the 108 RTAs notified to the General Agreements on Tariffs and Trade (GATT) over the period 1948-1994, 33 of them had been established in the early 1990s.

By the year 2000, almost half of the 220 RTAs notified to the World Trade Organisation (WTO) are initiated after the Cold War. Such is the importance accorded to RTAs or FTAs in recent times that no country can ill afford to ignore it. Till July 2007, some 380 RTAs have been notified to the WTO. [vii]

For India, this agreement will be a major milestone in its Look East Policy that began after the collapse of the erstwhile Soviet Union. The current agreement will take India far beyond its existing trade agreements with Myanmar, Thailand and Singapore.

It is in these contexts that India's Northeast came to be seen in a new light. Rajiv Sikri, the Secretary East of the Ministry of External Affairs remarked that the Look East Policy "envisages the Northeast region not as the periphery of India, but as the centre of a thriving and integrated economic space linking two dynamic regions with a network of highways, railways, pipelines, transmission lines crisscrossing the region." [viii]

Myanmar, now being a member of ASEAN and having shared a 1643 km long border with India, is now becoming the major link between India and ASEAN countries. The Northeast states of India have now also been seen as the 'gateway' to the ASEAN countries.

One early outcome of the Look East policy was the Indo-Myanmar Trade Agreement signed in 1994. According to this agreement, border trade between the two is to be conducted through Moreh in India and Tamu in Myanmar; Champhai in India and Hri in Myanmar and other places that may be notified by mutual agreement. Several Indian companies are also engaged in oil and gas exploration in Myanmar.

In 2001, India upgraded the 160 km long Tamu-Kalewa-Kalemyo highway. Plans for a 1400 km long trans-Asian highway that will connect India, Myanmar and Thailand is now being finalised. A railway link that will extend up to Imphal in Manipur in the first phase and up to Myanmar in the second phase is also being planned. Bilateral trade between India and Myanmar has also been expanding at a significant rate since 2001.

India has extended a number of general and project-specific credit lines in the last few years. Some major projects between the two, besides the ones already mentioned include the Rhi-Tiddim and Rhi-Falam Roads in Myanmar, the Kaladan Multimodal Transport Project and the Tamanthi Hydro Electric Power Project.

The Kaladan Multimodal Transit-cum-Transport project agreement was signed in April this year. Jairam Ramesh, the Minister of State for Commerce said that the Rs. 548 Crore project will help increase connectivity between the two countries. This project will link Kolkata and Sittwe, Kaleutwa in Myanmar by road and would go through Mizoram in India. It also envisages the development of a 225 km waterway on the Kaladan River and the construction of ports along the way.

The minister said that north eastern India will be able to boost its border trade with Myanmar. We will also consider opening up of trading points in Mizoram, Arunachal Pradesh and Nagaland. At present, we have only one trading point at Moreh in Manipur.

This project will also help India to effectively integrate with the ASEAN region through Myanmar. [ix] Plans to allow free movement of Myanmarese citizens up to Moreh town in Manipur is also afoot. The Manipur Government has also submitted a Rs. 200 Crore project proposal to the Central Government to develop infrastructure at Moreh.

In 2006, a proposal for a bus service between Imphal and Mandalay was considered and accepted by the Indian Government. But till now, no such service has been undertaken. But during the September 2008 visit of a 17-member trade delegation from Myanmar at Imphal, the Myanmar trade delegation expressed their desire to implement the proposed Imphal-Mandalay bus service definitely.

This visit was a reciprocal visit after a trade delegation from Manipur visited Mandalay during the month of April 2008. After holding a series of meetings, both the sides agreed to put pressure on their respective governments to improve the existing border trade between India and Myanmar.

Earlier in April 2008, after the visit of a strong Myanmar official and business delegation to India, both the two countries had agreed to increase border trade that is restricted to only 22 items, all being agricultural products. There are now plans to free more items including life saving drugs, fertilizers, garments, x-ray papers and motor parts.

The latest agreement signed between India and Myanmar is the four-point economic cooperation agreement signed in June this year. This agreement was signed by the Indian Minister for Commerce and Power Jairam Ramesh and the Myanmar Minister for National Planning and Economic Development U Soe Tha.

First, the Bilateral Investment Promotion Agreement (BIPA) was signed to encourage investment between the two countries. Second, a credit line agreement between the Exim Bank of India and the Myanmar Foreign Trade Bank was signed to finance three 290 kv transmission lines in Myanmar. This US$ 64 million project will be executed by the Power Grid Corporation of India.

Third, a credit line agreement for US$ 20 million between the Exim Bank of India and the Myanmar Trade Bank was signed to finance the establishment of an aluminium conductor steel reinforced wire manufacturing facility. This facility will be used for the expansion of power distribution network in Myanmar.

Fourth, the United Bank of India (UBI) and the Myanmar Economic Bank signed an agreement to encourage border trade through Moreh. There are also plans to expand trade centres to include Arangkhu and Lungwa in Nagaland, Zokhawthar in Mizoram, Pangsan Pass in Arunachal Pradesh and Behiang, Skip and Tusom in Manipur. [x]

At present, only Moreh border trade centre in Manipur is functional with other centres becoming non-functional.

Till now, results are far below expectations, especially for the Northeast. In practice, the agreements between India and Myanmar do not extend much beyond granting formal sanctions to the already existing exchanges between the local people. In effect, border trade remains insignificant and did not contribute much towards economic growth for neither country.

Among the many problems faced by both countries, security concerns and the poorly developed infrastructure for trade are the most acute. For trade and commerce to flourish, the entire network of transport and communication, industries and agriculture throughout the Northeast also needs to be revamped and developed. Unless this is done, the much touted India-ASEAN FTA will be just another statistics in the minds of a very few researchers, academicians, scholars and administrators in Northeast India.

An important point to note is that although trade performance has improved with India's eastern neighbours, many of these exchanges had been done through seaports, leaving the northeast states in the lurch. If the northeast is to benefit from any improved trade relations or any present or future FTAs, the numerous plans and proposals that has been put forth and are in paper only must be implemented and brought to fruition first. The very few roles that the northeast states are playing right now should also be promoted to a more central role so that the north east states could reap the fruits of its own fields.

In a nutshell, Northeast India, a storehouse of great natural resources but very backward economically, needs to be built up and readied if it is really going to be the 'gateway' or 'centre' of trade between India and East Asia. Unless the region is developed to catch up with the rest of the country in its growth rate and development, it will be hard to achieve what the people aspired for peace, security, prosperity and all round development.

To make this possible, substantial investment in infrastructure, construction of roads, bridges, communication networks, harnessing of the region's vast natural resources and other physical infrastructures that will facilitate trade and economic progress needs to be developed.

With the impending AIFTA, India's Northeast region has suddenly become the centre of focus once again. But this region has been lacking behind other Indian states in most respects in spite of its vast natural resources and strategic position as a link between India and Southeast and East Asian countries. The main reasons why this region remains backward are the lack of any infrastructure that could facilitate any development in the region, poor market access and, to some degree, security issues.

The Indian government also concedes that the Northeast has a long way to go to achieve the national growth rate of nearly 9 per cent. The growth rate of Northeast is only 4 per cent. To increase the growth rate and economy of this region will be an important step because herein lies many solutions to some pressing political and security problems.

Therefore, in the context of the present FTA, the author is of the opinion that unless the Northeast region is developed wholeheartedly, neither India nor ASEAN will really benefit from it.

Concluding Remarks

Lately, there has been a flurry of activities that are of great importance to the north east states with some conscious efforts being made to develop this region. The Union Minister for the Development of North Eastern Region (DoNER) Mani Shankar Aiyar said that the Centre is aiming to promote the region as a major FDI destination and an export centre.

The minister added that these are all attempts to make the region the arrowhead of India's future economic growth. On July 2, 2008, the Indian PM released the North Eastern Region Vision 2020 document which contained detailed reports for the development of the north eastern region.

The PM gave his assurances that the visions contained within this document will be made a reality. To quote him extensively, he said, "Infrastructure deficiency remains a major concern of the Government. You will be happy to know that we have decided to link all State Capitals with railway lines. These projects have been given the status of National Projects with a special funding pattern. Airports are being modernized and new ones are being built.

An ambitious programme of road building has been taken up under the Special Accelerated Road Development Programme for the North East (SARDP-NE) and an amount of Rs. 31,000 Crore is being invested on roads in the 11th Five Year Plan. There are relaxed guidelines for rural roads under the Pradhan Mantri Gram Sadak Yojana (PMGSY) so that even the farthest hamlets on the border are linked by road. Within the 11th Plan period, these interventions will begin to show positive results. To bridge the infrastructure gap in the region, our Government has taken several initiatives.

Work on the Tipaimukh and Loktak Downstream Hydro Electric Projects, costing about Rs.6,000 crores and Rs. 800 crores respectively, has been expedited. The 726 MW Palatana Gas based Power Plant, with an outlay of Rs.3,000 crores, a 750 MW Thermal Power Plant at Bongaigaon with an outlay of Rs. 4375 crores, and the Assam Gas Cracker Project have all broken ground. The Kumarghat-Agartala railway line has been approved as a National project, with an outlay of Rs. 750 Crores. The Jiribam-Tupu-Imphal railway line, which will put the Manipur valley on the rail map of India, has also been sanctioned as a National project for Rs. 727 Crores." [xi]

On September 12, 2008, Lt. General ML Naidu visited Imphal and discussed with the Manipur Chief Minister issues pertaining to security, law and order situation in Manipur. It is still not clear if this visit has any significance in the context of our current discussions, but is certainly significant if we take into account the timing of the visit and the rank of the visitor.

During September 15-16, 2008, the fourth Northeast Business Summit was held in Guwahati, Assam. Besides delegates from the eight states of the Northeast, a high number of foreign dignitaries, including those from ASEAN, were present at the Summit.

Inaugurating the Summit, Indian Vice President M. Hamid Ansari said, "This Summit is as much about business as it is about politics, both domestic and external. It is about correctives. The effort today is as much to overcome the physical and commercial isolation of this region, as it is to set aside its 'geo-political isolation and put it on the path of accelerated and inclusive growth." [xii]

During the Summit, several MOUs and agreements were signed for the establishment of joint venture projects and technical assistance. This Summit attains great significance as this meeting comes immediately after the conclusion of the AIFTA and as several ASEAN diplomats attended this meeting.

What results will these recent developments have on the Northeast states is now the big question. As it is too early now, what we can do is to wait and see what unfolds.
 

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ASEAN-INDIA DIALOGUE RELATIONS

Introduction

1. ASEAN-India dialogue relations have grown rapidly from a sectoral dialogue partnership in 1992 to a full dialogue partnership in 1995 and subsequently to a Summit level interaction, with the First ASEAN-India Summit being held in 2002, all of which took place in a decade. This reflects the confidence both ASEAN and India have in the dialogue partnership which is reflected by the expanding and intensifying dialogue and cooperation in many sectors.

2. ASEAN-India cooperation covers the economic, political and security, and development cooperation dimensions with a number of mechanisms established to promote dialogue and cooperation in these areas. In recent years, sectoral cooperation has been gaining strength with the establishment of working group level meetings in science and technology, transport and infrastructure, and small and medium scale enterprises.

Political and Security

3. India has been an active member of the ASEAN Regional Forum (ARF) since July 1996. It views the ARF as valuable in promoting stable relationships between the major powers, and as a useful complement to the bilateral alliances and dialogues which are at the heart of the region's security architecture. ASEAN and India committed themselves to jointly contribute to the promotion of peace, stability and development in the Asia-Pacific region and the world, and respond positively to the challenges of a dynamic regional and international environment.

4. ASEAN and India are now intensifying their political and security dialogue to add a new dimension to a mutually beneficial economic and commercial relationship. Reflective of India's interest in intensifying its engagement with ASEAN, both sides now are in the process of jointly developing an India-ASEAN Vision 2020, as a roadmap to mutually desired objectives.

5. In embarking on concrete initiatives to step up cooperation mechanisms between ASEAN and India in the international fight against terrorism, India has proposed the signing of an ASEAN-India Joint Declaration for Cooperation in Combating International Terrorism. India presented a draft text for the consideration of ASEAN during the Fifth Meeting of the ASEAN-India JCC on 22-23 April 2003 in New Delhi. The Meeting agreed that the draft would considered by the ASEAN Senior Officials on Transnational Crime and the ASEAN-India SOM. The finalised text would be presented to the leaders at the Second ASEAN-India Summit in Bali.

6. On TAC, India’s accession to the TAC will further add significance to the treaty as a key document in ensuring peace and security, stability and development in Southeast Asia.
Trade and Investment Relations

7. Volume of trade and investment flows between ASEAN and India remained relatively low compared with other dialogue partners of ASEAN. Between 1993 and 2001, two-way trade between ASEAN and India has more than doubled from USD2.9 billion to USD9.9 billion, which is equivalent to a compounded annual growth rate of 16.5 per cent. Although trends in economic interaction are positive, the volume of trade and investment remains low. India accounts for less than 2.0 per cent of ASEAN’s total trade and 0.2 per cent of FDI in the region.

8. Acknowledging this trend and recognising the economic potentials of closer linkages, both sides started economic consultations at the ministerial and senior official levels. As a result of these consultations and the recommendations of the Joint Study on AFTA-India Linkages for the Enhancement of Trade and Investment, both sides are now working on an ASEAN-India Framework Agreement on Comprehensive Economic Cooperation. The Framework Agreement is being drafted by the ASEAN-India Economic Linkages Task Force (AIELTF). The volume of trade and the trend of investment are expected to improve when initiatives under the Framework Agreement are eventually implemented.

Development Cooperation

9. Since the establishment of the ASEAN-India dialogue relations, development cooperation activities/areas have grown in strength and number. In terms of sectors, ASEAN-India cooperation covers the following: trade and investment, science and technology, human resources development, tourism, transport and infrastructure, health, small and medium scale enterprise and people-to-people contact. Science and technology has been one of the most prolific areas with significant outputs. However, there have been delays in implementing cooperation activities and both sides are now actively working through the ASEAN-India Working Group to take stock and improve project formulation, coordination and implementation.

10. In this regard, it is important to note that India had contributed USD2.5 million in October 2002 to the ASEAN-India Cooperation Fund to further enhance cooperation. Thus far, limited activities have been identified to utilise the funds and India has expressed its strong desire to see the effective utilisation of the Fund by undertaking new cooperation activities. The balance of ASEAN-India Cooperation Fund as of 31 March 2003 was USD2,800,102.49.

11. During the 5th ASEAN-India JCC, India proposed a new sector of co-operation – agriculture- and would be submitting a concept paper to ASEAN on the modalities and areas to forge co-operation in the sector.

Future Direction

12. It is a fundamental fact of geography that India is in the immediate neighbourhood of ASEAN. Both share land and maritime borders with Myanmar, Indonesia and Thailand. The vital commercial sea lanes between West Asia and South East Asia straddle the Indian mainland and its island territories.

13. India's relations with ASEAN have grown considerably over the last decade, but a vast potential still remains untapped. Apart from economic cooperation, there is much more that the two sides can work for together.

14. With the convening of the First ASEAN-India Summit, the dialogue relations have been elevated to the highest level. While it demonstrated the commitment of ASEAN and India to work closely in the areas of mutual interest, both sides must now increase the level of cooperation. In order to facilitate a more balance and comprehensive cooperation, ASEAN and India could develop a Work Programme to prioritise activities with specific timelines for implementation.

15. To give greater visibility to cooperation, both sides should embark on a programme approach with clear strategic thrusts. Such programmes would comprise a number of projects to meet the objectives of the relations and could be multi-year in nature thereby having high impact on ASEAN-India development cooperation. Such programmes will tap on the strengths of the relations and the synergies within the programmes. The programmes could focus on S&T (including IT), HRD and capacity building and people-to-people contacts.

16. Two way trade and investment between ASEAN and India remain low, although both sides are of the view that opportunities for collaboration are yet to be fully tapped. The ASEAN-India Framework Agreement on Comprehensive Economic Cooperation, once agreed and implemented, could facilitate greater flow of trade and investment. In addition, ASEAN and India should encourage their respective private sectors to tap on the huge market potentials that both sides have to offer. The current international situation also presents a case for ASEAN and India to collaborate more closely.

17. India has expressed keen interest in forging closer cooperation with ASEAN in combating international terrorism. In this regard, there are potentials for both sides to cooperate. At the initial stages, both sides could focus on exchange of information and best practices as well as training. Seminars and workshops on counter-terrorism and related areas could be initiated to better appreciate the situation on the ground and how both sides are tackling the problem as well to identify possible areas for joint cooperation and action.

18. ASEAN also welcomes India’s interest to develop a network of relations with ASEAN through other means of cooperation frameworks as it would complement the larger goal of enhancing ASEAN-India ties. In this regard, ASEAN could encourage India’s active participation in the Mekong-Ganga Cooperation and the five-member sub-regional grouping of Bangladesh, India, Myanmar, Sri Lanka and Thailand-Economic Cooperation (BIMST-EC).
 

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India & ASEAN

Since its beginning about a decade ago, the partnership between India and the Association of South East Asian Nations (ASEAN) comprising Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam has been developing at quite a fast pace.

India became a sectoral dialogue partner of ASEAN in 1992. Mutual interest led ASEAN to invite India to become its full dialogue partner during the fifth ASEAN summit in Bangkok in 1995. India also became a member of the ASEAN Regional Forum (ARF) in 1996. India and ASEAN have been holding summit level meetings on an annual basis since 2002.

India signed a Free Trade Agreement (FTA) with the ASEAN members in October 2009 in Thailand.

Under the ASEAN-India FTA, the ASEAN member countries and India will lift import tariffs on more than 80 per cent of traded products between 2013 and 2016.

Also, tariffs on sensitive goods will be reduced to 5 per cent in 2016, while tariffs will be maintained on up to 489 items of very sensitive products.

India and ASEAN are currently negotiating Agreements on Trade in Services and Investment. The services negotiations are taking place on a request-offer basis, wherein both sides make requests for the openings they seek and offers are made by the receiving country based on the requests. There are four meetings scheduled between January and July and the deal is expected to be finalised by August 2010.

India has made requests in a number of areas including teaching, nursing, architecture, chartered accountancy and medicine as it has a large number of English speaking professionals in these areas who can gain from job opportunities in the ASEAN region. India is also keen on expanding its telecom, IT, tourism and banking network in the ASEAN countries.

Trade

The deepening of ties between India and ASEAN is reflected in the continued buoyancy in the trade figures. The trade grew by 13 per cent during April-September 2007-08 to US$ 17.02 billion as against US$ 15.06 billion during the same period in 2006-07. ASEAN is India’s fourth-largest trading partner after the EU, US and China. Indo-ASEAN trade, which has been growing at a compounded annual growth rate (CAGR) of 27 per cent since 2000, stood at US$ 38.37 billion in 2007-08. The bilateral trade between India and the ten-member ASEAN now stands at US$ 48 billion annually.

Singapore

The growing bilateral economic relationship is reflected in the rapidly rising bilateral trade between Singapore and India. The cumulative FDI inflow to India from Singapore during April 2000-April 2009 was around US$ 7.9 billion. Singapore continues to be the single largest investor in India amongst the ASEAN countries with FDI inflows into India and the second largest amongst all countries, rising to US$ 3.45 billion in 2008-09. FDI inflows from Singapore between April-July 2009 stood at US$ 759 million, taking the cumulative inflows from April 2000 - July 2009 to US$ 8.57 billion.

The total bilateral trade during 2007-08 was US$ 15.49 billion and India exported goods worth US$ 6.6 billion in April-December 2008-09.

ICICI Bank is all set to become the second Indian financial institution to get a full-fledged banking licence in Singapore, which will allow it to set up branches, ATMs, take deposits and disburse loans like a local bank. State Bank of India is already a fully recognized bank in Singapore.

Malaysia

The bilateral economic relationship between India and Malaysia has been steadily moving ahead. Malaysia has been a huge source of FDI for India. In fact, Malaysia is the twenty-fourth largest overall investor and second largest investor among ASEAN countries with a total inflow of US$ 233.74 million during April 2000-July2009.

Bilateral trade among the two countries amounted to US$ 10.5 billion during 2008-09. During the same period, US$3 8.7 million worth of Malaysian investments in India were primarily in sectors like construction, real estate and business services.

India is the ninth-biggest investor in Malaysia. However, there is huge potential for collaboration in the automotive, ICT, pharma and biotechnology, machinery and supporting engineering industries and services sectors like education and tourism.

Myanmar

During the period April-December 2008-09, India exported goods worth US$ 173.28 million to Myanmar comprising mainly of iron and steel and pharmaceuticals. FDI inflows from Myanmar into India totalled to US$ 8.96 million during April 2000-July 2009. Bilateral trade stood at US$ 995.37 million during 2007-08.

In April 2008, India and Myanmar signed the Double Taxation Avoidance Agreement, which will enable both nations to prevent tax evasion and ensure that business profits are taxed only in the country where the company has a permanent establishment.

Indonesia

During the period April-December 2008-09, India exported goods worth almost US$ 1.82 billion to Indonesia, comprising mainly of organic chemicals, mineral fuels and ships and boats. The trade target likely to be achieved by 2010 is US$ 10 billion. FDI inflows from Indonesia into India totalled to US$ 51.90 million during April 2000-July 2009.

Moreover, India and Indonesia have signed a memorandum of understanding (MoU) for cooperation in the field of agriculture and allied sectors.

Thailand

Bilateral trade between the two countries touched US$ 4.11 billion in 2007-08, as compared to US$ 3.18 billion in 2006-07, registering a growth of 28.97 per cent. During the period April-December 2008-09, India exported goods worth almost US$ 1.44 billion to Thailand. Total FDI inflow during April 2000-July 2009 from Thailand was US$ 55.36 million. The sectors that have witnessed Thai investment are telecommunication, hotel & tourism, food processing, trading and chemicals.

With the signing of the free trade agreement (FTA) between India and ASEAN countries, Thailand is targeting US$ 10 billion bilateral trade in 2010.

Vietnam

Bilateral trade grew to US$ 1.77 billion in 2007-08 from US$ 1.14 billion in 2006-07. During the period April-December 2008-09, India exported goods worth almost US$ 1.13 billion.

Philippines

Bilateral trade between India and Philippines was worth US$ 823.69 million in 2007-08. During the period April-December 2008-09, India exported goods worth almost US$ 574.22 million to Phillipines.

Cambodia

During 2007-08, bilateral trade between the two countries stood at US$ 56.32 million in 2007-08. India exported goods worth US$ 35.94 million in April-December 2008-09, chiefly comprising pharmaceuticals, coffee, tea, spices and cotton.

Road ahead

The ASEAN countries with large populations and consumption patterns are important drivers of growth. With a combined Gross Domestic Product (GDP) of US$ 2.3 trillion as of now, they together will create a new free trade area of 1.7 billion people and cover 11 countries.
 

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INDIA-ASEAN RELATIONS:Analysing Regional Implications

AN OVERVIEW
India has shared a close relationship with ASEAN countries since the time of its independence. It started expanding its influence in the Southeast Asian region during the 1950s by supporting the Indonesian struggle for independence and involving itself in the Indochina crisis in the 1960s. It also signed friendship treaties with Indonesia, Myanmar and the Philippines and consolidated its bilateral and diplomatic relations with them.However, with the signing of an “India-Soviet Peace and Friendship Cooperation Treaty”, relations between India and ASEAN took a downturn. The ASEAN members’ perception of the Soviet Union
was far from benign and the signing of the treaty made them suspicious of India’s intentions.1 Further, under the influence of the Soviet Union, India recognized the People’s Republic of Kampuchea regime
that was propped up in Vietnam in July 1980 and through the decade, built strong political and military relations with Vietnam. This was contrary to the ASEAN view which condemned the Kampuchean regime and resulted in the worsening of relations between India and ASEAN.2Through the 1980s, relations between India and ASEAN were uncertain and plagued by various political and diplomatic differences which resulted in a compromise of economic relations between them. However, with the collapse of the Soviet Union, India embarked on re-orienting its foreign policy priorities. India initiated its
 

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India offers Vietnam $ 100-million credit for military ware

In a first, India has offered a $ 100-million credit line to Vietnam to purchase military equipment. It will be used for purchasing four patrol boats.

The credit line was agreed upon around the time India once again expressed its resolve to remain involved in oil exploration activity in the Phu Kanh basin of the South China Sea. Vietnam says it is within its rights to invite India to explore for oil in this area. But China claims that this basin is within the "nine dotted line" or its zone of influence. The credit line is likely to be finalised by the time the General Secretary of the Communist Party of Vietnam visits India towards the end of the year.

Vietnam and India have long enjoyed strategic ties that include cooperation in the civil nuclear sector, training slots for Vietnamese military officers and frequent exchange of visits.

But this is one rare occasion when India is offering a defence-related credit line so far upfield. Usually, near neighbours squarely in India's zone of direct influence have been the beneficiaries of New Delhi's credit lines for the defence sector. For example, Mauritius, whose air force and navy have Indian defence hardware, was given credit lines to buy Indian patrol boats and Dhruv helicopters.

India has wanted to expand its defence ties with Vietnam to military hardware and one of the top- most items on the Vietnamese wish-list is the Brahmos missile, jointly produced with Russia, which, however, has close ties with both Vietnam and China and would not want to antagonise either.

Sources in the government wanted the credit line to be seen from the context of the overall drive to improve ties with South East Asian nations of which Vietnam's close ties with India predate the Cold War. There has been a heavy traffic of high level visitors between the two countries that has led to a $ 45-million credit line for a 200-MW hydel project built by BHEL, offer of export of the Param supercomputer and a breakthrough for the Indian corporate sector though its Vietnamese counterparts have struggled.

The sources pointed out that India was beefing up security ties with all countries beyond its eastern flank as one of the vital components of its Look East policy. India and navies of some South East Asian countries have for long conducted the Milan series of naval exercises. The Indian Navy also conducts coordinated patrols with Thailand and holds joint exercises with Singapore and Japan.


India offers Vietnam $ 100-million credit for military ware | idrw.org
 

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India should immediately some 3 C-17s & 2 C-130Js with aid to Phillipines, it is time to form a strong partnership by being a friend when they really need it. They could be an invaluable ally in the region. Moreover with the C-17, we could really be a very helpful hand.
 

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India's Look East Policy And South China Sea: Politico-Strategic Dynamics – Analysis

Introductory Observations

Politico-strategic and economic imperatives impelled India to launch its 'Look East Policy' in 1992. From the initial political and economic underpinnings, two decades later, India's 'Look East Policy' has matured into a comprehensive political, economic, and strategic and defence relationships between India and ASEAN and India and East Asia.

In the two decades of India's 'Look East Policy' existence, the politico- strategic dynamics stand significantly transformed. The first decade marked India's concerted efforts to integrate itself with ASEAN and East Asia economically and politically. India was adapting to the post-Cold War era and its economy badly needed repair and resuscitation.

Politico-strategic dynamics in play in the Asia Pacific in the second decade hastened the process of the strategic discovery of each other between ASEAN and India and between East Asia and India.

In the second decade of India's 'Look East Policy' the politico-strategic dynamics in play need to be briefly stated. In the opening years of this Century, India stood tall as an economic power and a military power. India's nuclear weaponisation had taken place. The United States made a political and strategic reach-out to India and forged the US-India Strategic Partnership.

Contextually, the Asia Pacific by middle of the last decade witnessed the phenomenal rise of Chinese military power and naval build-up. The use of this power for conflict escalation and military brinkmanship by China created strategic distrust in East Asia and ASEAN about the not too benign strategic intentions of China.

Both in East Asia and in ASEAN there were growing expectations that India should emerge as the strategic regional balancer and hence the moves for strategic engagement by both sides.

On the verge of the third decade of India's 'Look east Policy' , ASEAN accepted India as a full-fledged "Strategic Partner" at the 11th India –ASEAN Summit held in New Delhi in December 2012. The validity of India's 'Look East Policy' and its record of 'Act East' stood validated.

India's 'Look East Policy' initiated in the early 1990s was a well-crafted and visionary foreign policy strategy initiated by then Indian Prime Minister P V Narasimha Rao. To him and him alone goes the credit of reversing India's economic and foreign policy directions which put India on the path of economic liberalisation and divesting India of its erstwhile idealistic foreign policy mind-sets.

India's 'Look East Policy' fortunately enjoyed consistent political support of all political dispensations that followed the Late Prime Minister P V Narasimha Rao.

Ordinarily, a presentation on India's 'Look East Policy' and 'Act East' initiatives would have sufficed with enumeration of statistical data and listing the political and economic achievements of the last twenty years. Thee in any case stand well documented in writings by policy analysts.

But now that the strategic component in India's 'Look East Policy' is gaining salience, as this policy enters the third decade, it would be appropriate to dwell more on this aspect.

In politico-strategic terms, in the pursuance of its 'Look East Policy', India without much diplomatic flamboyance, has established substantial and comprehensive politico-strategic linkages in East Asia with Japan and South Korea and in South East Asia with the entire group of countries comprising the ASEAN Region. That now provides the bedrock of more substantial strategic openings as ASEAN and East Asia nations seem to be investing in India's reputation as a benign emerging power not only in the Asia Pacific but also the Indo Pacific.

The broad template having been laid of the main theme, a closer examination is merited of India's Look East Policy, India's record in terms of "Act East' and India's policy approaches to the South China Sea disputes. A look is also being given to the global and regional acceptability of this Policy.

CONTINUED--
 

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India's 'Look East Policy': The Politico-Strategic Dynamics of the 1990s

India's Look East Policy crafted and given impetus by India's Prime Minister Narasimha Rao in the early 1990s merits to be qualified as one of the masterstrokes of Indian diplomacy. The persistent pursuance of this Policy by subsequent political dispensations in power in New Delhi highlights India's long term interest and commitments to South East Asia and East Asia.

Politico-strategic dynamics in play in the 1990s, the first decade of India's 'Look East Policy' need to be viewed in two separate time frames, namely the early 1990s and the closing years of that decade.

India's 'Look East Policy' needs to be viewed as a logical reawakening of India to the strategic reality in the post-Cold War era that India had 'Other Neighbours' too, besides South Asia. The ASEAN neighbourhood had gained both political and economic salience in regional and global affairs. While India shared land borders with only Myanmar, India shared maritime boundaries with many ASEAN countries like Myanmar, Singapore, Thailand and Indonesia.

ASEAN Region therefore offered an attractive proposition for an Indian political and economic reach-out. Politically it offered India wider openings to ASEAN countries and East Asia as a whole. Economically, India could benefit with this economically dynamic and vibrant region for its own economic ascendancy with economic liberalisation having already being initiated.

India's initial thrusts in its Look East Policy were primarily political and economic, and one could say that the emphasis was on the latter.

The point that needs to be emphasised initially itself is that India had maintained good relationships with South East Asian countries and also in East Asia with Japan even before it initiated its 'Look East Policy'.

India's 'Look East Policy' progress in the initial years may seem slow to many policy analysts but then it needs to be remembered that this was the time of India and ASEAN and East Asia politically discovering each other and sizing-up each other. This was also the period when ASEAN was focussing more on integrating China into various ASEAN mechanisms.

India's 'Look East Policy' gained more traction as the decade of the 1990s was coming to a close due to a combination of prevailing politico-strategic dynamics. By 2000 India had emerged as a rising power both economically and militarily. Economically, India had registered strong economic growth rates and India now presented an attractive destination for economic investments. With its nuclear weaponisation in 1998 and its advanced missiles programmes India's military strengths were on display.

At the turn of the Millennium, India's power potential and attributes of power stood recognised by the United States which prompted it to forge the US-India Strategic Partnership. India's 1.2 billion domestic markets in a liberalised economy and India's growing defence purchases programme provided the stimulus to United States recognition of India after shunning it in the Cold War era.

The unstated factor in United States recognition of India's power potential and its courting India were the balance of power considerations in Asia Pacific in relation to China's disturbing military rise

Politico-strategic dynamics had propelled India on an upward strategic trajectory in the Asia Pacific. This had a two way effect on the maturing of India's 'Look East Policy'.

East Asian countries like Japan and South Korea tied in security relationships to the United States found it easier to move closer to India in terms of openness to strategic partnerships and economic cooperation.

Similarly, ASEAN Region nations were moved to make strategic openings to India in view of India's rising international profile. ASEAN Region's creeping disappointment with China not delivering on their security expectations of a conflict- free South East Asia despite ASEAN integrating China in ASEAN dialogue mechanisms prompted them to look for alternatives,

India with its benign image of a responsible stakeholder in South East Asian stability and security provided that alternative.

India's initiation of its 'Look East Policy was therefore not only in effect a 're-return' of India to a far more active and integrative role in South East Asia and East Asia affairs, but in terms of the Global Shift of Power to Asia provided an alternative to China in the region.

CONTINUED--
 

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Asian Politico-Strategic Dynamics of the 21st Century First Decade Adds Impetus to India's 'Act East' Profile
India's 'Act East' Profile in the Political and Economic Domains

Politically and economically, India's 'Act East' record in relation to South East Asia seems to have followed a two-strand inter-twined strategy. The two noticeable strands were one getting integrated at the regional level maintaining the centrality of ASEAN as the long-standing regional organisation of South East Asian countries. India's approaches in East Asia to Japan and South Korea followed a similar pattern.

The second level was focussed on the forging of close political and economic linkages with each of the South East Asian countries in the bilateral format but within the overall framework of ASEAN centrality.

India's political and economic overall record in pursuance of its 'Act East' record is exhaustive and therefore this presentation would focus on the more salient achievements to highlight India's 'Act East 'record.

Politically, India pursuing its 'Act East' strategy reached a creditable high point when the India-ASEAN Summit was held in New Delhi in December 2012 attended by Heads of ten ASEAN countries. It marked the coming of age of India's 'Act East' drive.

The ASEAN-India Commemorative Summit was held in New Delhi in December 2012 to mark the 20th Anniversary of India-ASEAN relations and the 10th Anniversary of India becoming a Dialogue Partner of ASEAN. The most notable achievement of this Summit was the issue of a Vision Statement which significantly declared that "We declare that the ASEAN –India Partnership stands elevated to a strategic partnership."

The Vision Statement lays down in great detail the blueprint of ASEAN and India to surge ahead in in all fields in a comprehensive manner.

Complementing this 'Act East' political achievement of India is also its record of establishing substantial political relationships with individual ASEAN countries on a bilateral basis. India has forged strong political linkages with Vietnam, Indonesia, Thailand, Malaysia, Singapore and Myanmar. High level exchanges of political dignitaries take place regularly. Dialogue mechanisms exist for regular exchange of strategic views and advancing economic relations to higher levels.

CONTINUED--
 

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India's 'Act East' Profile: The Strategic and Military Dimension

India's 'Act East' profile was not restricted to the political and economic spheres only. Strategic and military turbulence in East Asia and South East Asia generated an unstable security environment. India was not a party to the regional disputes of Asia Pacific of which East Asia and South East Asia were parts of.

Nevertheless, India could not remain a detached observer of conflictual regional events as they impacted on India's security and national interests. It needs to be noted that India and ASEAN share overlapping security environments and share virtually the same strategic concerns.

Furthermore, India as an emerging power was expected and increasingly being looked upon by ASEAN Region as a counterweight to China's perceptionaly threatening military profile. ASEAN was expecting India to play the role of a "Regional Balancer".

The United States going by the statements of its top dignitaries at international forums in the region expected India to be the "nett provider of security in the Asia Pacific". That stands supported by other Western nations.

India has always traditionally been reluctant to join military alliances or security networks but despite that reluctance what has become increasingly visible in India's 'Act East' profile is the adding of bi-lateral strategic and military dimensions.

In East Asia, India has a strategic dialogue with Japan and South Korea, exchange of visits by Defence Ministers and Armed Forces Chiefs. India conducts naval cruises in Western Pacific and conducts s joint exercises in the region.

On a higher plane the US-Japan –India Trilateral and US-Japan-India-Australia Quadrilateral indicate integration with security initiatives in the region.

In South East Asia, India has substantive strategic and military dialogues with ASEAN nations. Heading the list are Vietnam and Singapore. Added to this list are also Indonesia, Malaysia, Philippines and Thailand. India also enjoys close military relations with Myanmar.

In short the strategic and military tapestry that India has woven now extends from South Korea and Japan in the North to the South China Sea littoral ASEAN countries and extends all the way to Straits of Malacca, Myanmar and India's island territories of Andaman & Nicobar Islands sitting strategically on the approaches to Straits of Malacca and the South China Sea.

CONTINUED--
 

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India's Interests In the South China Sea: The Politico Strategic Determinants

The South China Sea extends from the Straits of Taiwan and extends all the way to the Straits of Malacca. The South China Sea therefore is virtually located at the doorsteps of India. Overlapping security concerns between India and ASEAN countries are therefore a legitimate outcome.

India has therefore a legitimate security interest in the security and stability of the South China Sea region as any turbulence in this region could adversely impact India's national security interests.

Apart from the strategic importance of South China Sea to India's security interests, this maritime expanse is vital for India's trade and commerce. The South China Sea is also vital for India in relation to its energy security in relation to its Sakhalin supplies from Russia.

Politically, the ASEAN littoral countries of the South China Sea count on India for support against any dominance of the South China Sea by a single power. China has demonstrated by its Nine Dash Declarations and the South China Sea as China's 'Core National Interest' Declaration that it claims sovereignty over the entire South China Sea. This claim is not acceptable regionally or globally.

Globally and regionally it has been asserted that the South China Sea is "Global Commons" and these are international waters through which international maritime traffic including naval movements have the right of unimpeded access and navigation. The United States has declared that security in the South China Sea is a national security interest of America.

India strongly supports the stand of the international community on this score and it has been reiterated and asserted at India's apex political levels.

The ASEAN-India Vision Statement of 2012 states the same: "Committed to strengthening cooperation to ensure maritime security and freedom of navigation and safety of sea-lanes communication and unfettered movement of trade and commerce in accordance with international laws (UNCLOS)".

The question that is often asked is as to whether India would come to the assistance of Vietnam or the Philippines or any other ASEAN country in the event of Chinese aggression and armed conflict in the South China Sea.

The short answer would be that in the event of such an armed aggression or conflict escalation contingency, a 'stand-alone' response from India is not expected by the Region. In such a contingency it would be a strategic gauntlet thrown by China at the international community with deep regional and global implications.

The international community would have to unitedly face such a contingency and it is my personal belief that India would not be found wanting in not supporting international community's actions.

While India in relation to the South China Sea as a responsible stake-holder is committed to conflict prevention and peaceful conflict resolution of the South China Sea, it cannot remain oblivious to a threatening maritime environment which presently menaces the South China Sea and later may manifest in the India Ocean.

Sometimes back the Indian Naval Chief had asserted that the Indian Navy is prepared for South China Sea contingencies, even though the India Government downplayed the assertion for obvious reasons. But the fact is that by its periodic cruises in the Western Pacific, joint naval exercises with ASEAN, US, Japanese, South Korean and Vietnamese Navies, the Indian Navy has built substantive familiarisation of South China Sea waters and inter-operability with other Navies with a stake in the South China Sea.

India's own maritime and naval postures have adopted an eastward orientation with greater emphasis on reinforcing the operational capabilities of its Eastern Naval Command, the Tri-Service Command in the Andaman & Nicobar Islands now to be headed by an Indian Navy Vice Admiral. Maritime aerial surveillance backed up by Indian Air Force strike capabilities is also being reinforced.in Eastern India.

India is presently engaged through various protocols in 'capacity-building' of self-reliant naval and maritime capabilities of a number of ASEAN nations along with other responsible stake-holders in the South China Sea.

In fact, conflict-escalation in the South China Sea has been a 'wake-up call' for ASEAN as a whole where complacency is no longer advisable and an unquestioned unity a strategic imperative.

CONTINUED--
 

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Concluding Observations: Regional and Global Acceptance of India's 'Look East Policy'

Asia's politico-strategic dynamics have led to an increasing regional and global acceptance of India's 'Look East Policy'. It is not without reason that India stands elevated by ASEAN as a 'Strategic Partner" at the ASEAN-India Summit in December 2012 at New Delhi.

There is an increasing strategic convergence of views on regional security between India on the one hand and East Asian countries and between India and the ASEAN Region nations.

Significantly, the United States as the predominant power in the Asia Pacific not only strongly supports India's 'Look East Policy' but also encourages India to be more assertive in its 'Look East Policy' initiatives.

The above is a far cry from the second last decade of the 20th Century when India was the object of suspicion and strategic distrust from the United States and its Asia Pacific allies.

What has brought about this change in policy attitudes and policy inclinations of the United States and the line-up of Asia Pacific nations? Obviously, the contemporaray politico-strategic dynamics that dominate the Asia Pacific strategic landscape, in which comparatively, China is viewed with strategic distrust and India as the other rival Asian power is viewed as strategically trustworthy and a benign power with a powerful stake in the stability of East Asia and South East Asia.

India has emerged as a significant player in the Asia Pacific strategic calculus and power play and that by itself would ensure an enduring commitment to its 'Look East Policy'.

Suggested Related Readings on the Subject: Author's Papers on South Asia Analysis Group website South Asia Analysis Group

'South East Asia: The Great Game Strategically in Swing". Paper No. 5315 dated 28 November 2012

"Vietnam-India Strategic Partnership: A Contextual Analysis". Paper No.5328 dated 14 December 2012.

"ASEAN Region: India Needs to Stand Strategically Tall." Paper No.5332 dated 20 December2012.

"South China Sea: Indian Defence Minister Makes Strong Assertions". Paper No. 5496 dated 20 May 2013

"South China Sea: Indian Navy Operational Cruise". Paper No. 5500 dated 29 May 2013

(The Paper was presented by the author By Dr. Subhash Kapila at the "5th International Conference on South China Sea: Cooperation for Regional Security and Development" on November 11 2013 at Hanoi, Vietnam. The Conference was attended by over 35 international strategic and legal analysts including China)

South Asia Analysis Group
 

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Vietnam's leader to visit India to promote ties

Allocation of oil blocks in Phu Khanh basin of South China Sea could get a quiet burial

The visit of Vietnam's top leader and General Secretary of Vietnam Communist Party Nguyen Phu Trong beginning on Tuesday is expected to lend clarity to India's quest for greater intensity in bilateral energy, defence and economic ties, said official sources in the Ministry of External Affairs (MEA).

Economics will be the driving force of bilateral ties in future with India looking for opportunities in setting up refineries and the Tatas looking forward to setting up a 1,320-mw thermal power project after the failure of its $5 billion plan to set up a steel plant.

The India-Vietnamese project that has garnered the most attention — allocation of two oil blocks in Phu Khanh basin of South China Sea that is contested by China — could get a quiet burial after Beijing offered to Hanoi a joint approach on economic issues and has taken to discussing the sovereignty issue with ASEAN as well as bilaterally with Vietnam.

Official sources gave hints about India planning to withdraw from prospecting for block 128 on commercial considerations just like it returned block 127 about four years back.

ONGC Videsh Limited (OVL) has conveyed to the MEA about the need to relinquish this block which it has had to hold on due to foreign policy considerations despite clear indications about low prospects. OVL has time till next year to hand back the block and the feeling here is that with techno-economic surveys proving to be disappointing, it would be prudent to walk away and look at other opportunities opening up in the hydrocarbons sector.

Defence and security is another area where both sides are keen to add more content. India and Vietnam already have enabling agreements in place and are looking to build on the strong defence training programme, frequent exchange of visits and training of Vietnamese submariners.

India has already offered a $100 million credit line for the purchase of offshore patrol vessels but official sources remained non-committal of prospects of Indian defence exports, especially the Brahmos missile, although China's close ally Russia has been enhancing its defence ties with most major countries in the rim including Vietnam, Indonesia and Malaysia.

Keywords: India-Vietnam ties

Vietnam's leader to visit India to promote ties - The Hindu
 

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'Festival of India' to begin in Vietnam from March 5

New Delhi: A 10-day 'Festival of India', featuring a series of cultural events, will be held in Vietnam from March 5 to 15. The Festival of India in Hanoi would be inaugurated by the Senior Politburo Member and Deputy Prime Minister of Vietnam Nguyen Thien Nhan in the presence of eminent dignitaries, official statement said. Culture secretary Ravinder Singh will head the 90-member Indian delegation. Among the highlights of the festival are a dance composition titled 'Nrityaroopa' which will be presented by the Sangeet Natak Akademy. 'Nrityaroopa' encapsulates for a new audience the experience of Indian dance as it has evolved in various parts of the country. Six dance forms - Bharatanatyam, Kathak, Odissi, Chhau, Manipuri and Kathakali - representing the diversity of India's culture have been chosen for this presentation to Vietnamese audience. A food festival and a Buddhist festival would also be a part of the event, it said. The Buddhist Festival would comprise of Sand Mandala Painting, Butter Sculpture, Sacred Dance and Lama Chant, 25 monks from Central Institute of Himalayan Studies would be participating in the Buddhist Festival in Vietnam. The West Zone Cultural Centre would be presenting a Kalbelia dance troupe in Hanoi and Ho Chi Minh City for the Festival of India in Vietnam. A Yoga Festival would also be a part of the package while Mehendi artists would also be participating.


'Festival of India' to begin in Vietnam from March 5 | NDTV.com
 

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India Wades Into South China Sea Dispute
Recent remarks by ASEAN and Indian officials suggest that Delhi is looking to deepen its involvement in the South China Sea issue.

Most notable are the remarks Shri Anil Wadhwa, Secretary (East) of India's Ministry of External Affairs, made last week at the Delhi Dialogue VI, an annual ASEAN-India dialogue. Speaking to the journalists at the conference, Wadhwa said:

"We advocate that the lines, the channels of trade and communication should be kept open and of course the sea, which, according to UN (United Nations) international law of the sea, is common to all the countries that use it. Definitely we are concerned."

Later, he added, "Our position has always been India stands for freedom of navigation on high seas. We would like to ensure that all countries in the region adhere to the international conventions on the law of the sea in this issue." He also stressed the centrality of ASEAN and urged restraint among all the parties, according to reports in the Philippine media.

In his opening address to the Delhi Dialogue last week, External Affairs Minister Salman Khurshid, espoused a similar if in direct theme. Noting that an important dimension of the ASEAN-India "strategic partnership is its increasing relevance to the political-security space in East Asia," Khurshid said that Delhi supports, "the ASEAN view which calls for greater ASEAN India collaboration on political-security issues."

Khurshid also emphasized the importance of upholding existing international law on maritime security, and stated: "India's naval footprint is essentially that of a net security provider even as it is set to expand. There is also potential for greater engagement between ASEAN and India in the ARF, ADMM+ and ASEAN Maritime Forum."

These remarks follow ones made earlier this month by National Security Adviser Shiv Shankar Menon, who said, "What happens in the South China Sea or the East China Sea concerns and affects the entire region"¦Conflict would roll back the gains to each of our countries of 40 years of stability and peace."

Similarly, at the East Asia Summit last October, Indian Prime Minister Manmohan Singh stated, ""A stable maritime environment is essential to realize our collective regional aspirations."

He later added:

"We welcome the collective commitment by the concerned countries to abide by and implement the 2002 Declaration on the Conduct of Parties in the South China Sea and to work towards the adoption of a Code of Conduct in the South China Sea on the basis of consensus. We also welcome the establishment of the Expanded ASEAN Maritime Forum for developing maritime norms that would reinforce existing international law relating to maritime security."

India has long been involved on the margins of the South China Sea issue. Most notably, it has been pursuing joint energy development opportunities with Vietnam in waters that both Hanoi and China claim. Altogether, some 55 percent of India's trade passes through the Strait of Malacca.

However, Delhi has always tried to balance these very real interests with its predilection to not offend China by wading too deeply into South China Sea affairs, mostly out of the fear that such a move could prompt Beijing to deepen its own naval operations in the Indian Ocean.

Nonetheless, the Indian Navy first deployed to the South China Sea in 2000, and, in a pointed message to China, it has at times threatened to send naval assets to the region to protect its energy investments in the waters near Vietnam.

For their own part, ASEAN nations have long called on India to deepen its involvement in the South China Sea issue. Laura Q. Del Rosario, the Philippines' deputy minister for international economic relations, recently insisted that "India should go East, and not just Look East."
 

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