The Way Forward for India-ASEAN Cooperation
Abstract: This commentary essentially argues that maritime cooperation, Blue Economy and connectivity are the future of ASEAN-India Cooperation and multilateral engagement is the key to success if India wants to engage in the Indo-Pacific in a comprehensive way.
The increasing focus on the concept of Indo-Pacific and related developments including the Quadrilateral Dialogue has brought renewed interests in India’s relations with its eastern neighbours. This is a simultaneous development with India’s foreign policy approach which speaks for proactive engagement with the neighbours. The renaming of ‘Look East Policy’ to ‘Act East Policy’ and New Delhi’s intensifying interactions with East Asia are examples of India’s strong engagements with the region, to start with Southeast Asia. At the last Shangri La Dialogue, held in Singapore in June 2018, Indian Prime Minister, Narendra Modi reinstated on the centrality of ASEAN in the Indo-Pacific. The Association of Southeast Asian Nations (ASEAN) and India have a combined population of more than 1.85 billion, that covers a quarter of the global population and has a GDP of over US$ 3.8 trillion.
Sectors like strategic maritime cooperation focusing on security, Blue Economy, multilateral and bilateral economic engagements with countries in the region and connectivity have become key focus areas of cooperation. In fact, a lot has been mentioned about maritime connectivity and maritime security based on the theme “Strengthening India-ASEAN Maritime Cooperation” at the recently held Delhi Dialogue in July 2018.
Strategic Maritime Cooperation:
In sync with India’s promotion of strengthening maritime cooperation with all its maritime neighbours, the concept like SAGAR (Security and Growth for All in the Region) has been evolved and works towards achieving the values associated with this have been initiated. The Forum for Pacific Islands Nations and the Jakarta Concord on Promoting Regional Cooperation for a Peaceful, Stable and Prosperous Indian Ocean, as adopted in Indonesia in March 2017 at the Indian Ocean Rim Association Summit, are instances to demonstrate India’s willingness to not only participate but actively promote multilateral engagements in the Indo-Pacific. At the same time, equal importance has been given to bilateral and trilateral engagements between India and its Southeast Asian neighbours. Recently, before PM Modi’s visit to the region to participate at the Shangri La Dialogue, Indonesia’s Coordinating Minister for Maritime Affairs, Mr Luhut Pandjaitan visited India and spoke highly about India’s participation in a port development in Sabang, 500 km away from the Malacca Straits. India’s naval ships will also be allowed to visit the port. This gives India yet another strategic presence into the region which caters to a large amount of India’s maritime trade. India is also discussing trilateral exercise with Singapore and Thailand, especially in the area of conducting joint and regular naval games. This has the potential of adding flavour to India’s presence as a substantial and strong player in the Indo-Pacific.
Economic cooperation plays a key role in enhancing India’s pragmatic engagement with the region. ASEAN and India’s economic cooperation has been enhanced by signing Free Trade Agreements (FTAs) at both regional and sub-regional forums. Ever since the signing of FTA in goods in 2009 with ASEAN, the bilateral trade between ASEAN-India has crossed US$ 80 billion marks. India’s exports to ASEAN increased about 6% from US$ 25.15 billion in 2015-16 to US$ 31 billion in 2016-17. However, there is a clear indication that India -ASEAN trade is negatively tilted against India. This adds to India’s dilemma over concluding the Regional Comprehensive Economic Partnership (RCEP).
The dilemma over RCEP:
RCEP is a mega- free trade deal between ASEAN and the plus six countries including China, Japan, South Korea, India, Australia and New Zealand. RCEP collectively accounts for about half the world’s population, 30 per cent of its trade and a quarter of global exports. Once concluded, the RCEP will be the largest regional free trading group. However, RCEP has already missed its deadline of concluding the negotiation. Besides the progress achieved in government procurement, customs procedures and trade facilitation, the negotiation has been stalled. ASEAN countries are pushing India to close the deal at the earliest possible time, to the extent that some of the trading partners are blaming India for the slow negotiation of the RCEP. India has its own reservations to hold up the deal. It is hesitant in opening up its market to China, with whom India already has a trade deficit of about US$ 63 billion in 2017-18. To speed up negotiations and successful conclusion of the RCEP, India’s stand came out clear. That, without the inclusion or liberalisation of the higher level of services and investment in the ASEAN-India trade basket, RCEP will not move forward. For a comprehensive free trade agreement, balancing not only of goods but also of services is important, along with necessary flexibility that is feasible for all the countries. The urgency to an early conclusion of the RCEP, which some member countries hope to be completed by 2019-20, comes at a critical time of Trump’s aggressive protectionist policies, and also, at a time when the global trading economies are shaken up by the huge tariff hikes announced by both US and China continuously for the past months. As the trade war ratchets up, the position of the other countries is also affected, including that of India and ASEAN. The time is right for ASEAN and India to reaffirm the commitment to multilateralism.
Cooperation in Blue Economy:
Of recent significance in the ASEAN-India partnership is the wider maritime cooperation through the “Blue economy.” Blue economy refers to the sustainable use of ocean resources for economic growth. An ocean is an abundant resource, and if harnessed efficiently, blue resources have the potential and opportunity for ASEAN-India to strengthen their collaboration to promote security, enhance commerce, and others. The Indian government stands committed to promoting the Blue economy by making a huge investment. In the first Maritime India Summit held in Mumbai in 2016, India made a commitment of US$ 13 billion across shipping, ports and allied sectors. The government also plans to invest US$ 190 billion over the next ten years to develop 27 industrial clusters and to improve connectivity with ports through new rail and road projects. To enhance maritime connectivity, India is working to lower logistics costs and motivate increased trade in goods and services. In this connection, India is working towards an early conclusion of the Agreement on Maritime Transport between ASEAN and India.
Connectivity is still the Buzzword:
Connectivity is another area where India has been working closely with its ASEAN partners. Two of India’s much-publicised connectivity projects, the India-Myanmar-Thailand Trilateral Highway and Kaladan Multimodal Transit and Transport project are expected to be completed by 2019. Both these projects will benefit landlocked Northeast India by providing the border states with an opportunity to be linked with the dynamic Southeast Asian economies. The Trilateral Highway might get an extension till Vietnam in the coming years. India has also pledged to assist the group of CLMV (Cambodia, Laos, Myanmar and Vietnam) in narrowing their developmental gaps with rest of ASEAN. In 2015, at the 13th ASEAN-India Summit, Prime Minister Modi offered USD 1 billion as Line of Credit to the CLMV to augment Indian exports to the region and enhance overall trade volumes. At the ASEAN-India Commemorative Summit, held in January 2018, PM Modi declared that India will cooperate with the CLMV in enhancing their digital infrastructure in the rural areas. During the visit of the Vietnamese President Tran Dai Quang to India in March 2018, both sides talked about direct shipping routes connecting India and Vietnam.
To strengthen ASEAN and India ’s relations in the areas of maritime cooperation, economic partnerships and connectivity projects, both sides have expressed their commitments often enough. However, there are problems like the delayed implementation of projects from India’s part and from ASEAN’s side, India expects the member countries to adopt a mutually acceptable deal as far as connectivity and multilateral economic engagements are concerned respectively. Again, in blue economy, both sides need to work towards ensuring maximum utilisation of resources without harming the marine environment. They need to adopt strong and responsible initiatives to harness the potential of the ocean in a sustainable manner.
Dr Sampa Kundu is an Assistant. Prof at School of International Studies, Symbiosis International (Deemed University), Pune
Dr Arenla is an Independent Researcher from New Delhi
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Kootneeti Team.