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THE DISTANCE–PROXIMITY PARADOX: UNRAVELLING INDIA’s ASEAN POLICY OVER THREE DECADES

Tridib Chakraborti

The first Association of Southeast Asian Nations (ASEAN) India summit, which was held on 5 November 2002 in Cambodia, in accordance with the decision taken at the seventh ASEAN summit in Brunei Darussalam in November 2001, was a watershed event in the history between bilateral relations between India and Southeast Asia since the fall of the former Soviet Union. The significance of India as a new actor in the circuit of ASEAN’s economic, political and strategic process was a product of history of more than one decade. This process started in the early 1990s. The disintegration of the erstwhile Soviet Union in 1991 resulted in the emergence of a new global, political and economic scenario. To deal with this new international environment, the government, under the leadership of P. V. Narasimha Rao, announced its new economic policy in July 1991, which was guided more by economic imperative and judiciousness and less by political rhetoric. The sudden collapse of former Soviet Union compelled New Delhi to search for new trade avenues and bonds throughout the world. This resulted in a paradigm shift in India’s overall foreign policy outlook. The structural similarities between the economies of the ASEAN countries and India, and the government’s move to effect a partial withdrawal of the mixed economy system naturally attracted many countries of Southeast Asia. ASEAN countries now considered India a favourable economic partner and took multifarious initiatives to promote trade links with New Delhi. In the post-Cold War years, the ASEAN countries realized the growing importance of the role of economic diplomacy in relations between nations and were also persuaded to believe that India was serious about her liberalization policy. As a result, India became a ‘sectoral dialogue’ partner of ASEAN in January 1992 on trade, investment, tourism and science and technology. At the fifth ASEAN summit in Bangkok in December 1995, the ASEAN leaders decided to elevate India’s status from ‘sectoral dialogue’ to ‘full dialogue’ partner. In the following year at Jakarta, India took part in ASEAN’s annual ministerial meeting (AMM) and post-ministerial conference (PMC) as a ‘full dialogue’ partner for the first time. New Delhi also participated in the ASEAN Regional Forum (ARF) in Jakarta and this helped to raise the profile of the security forum. Thus, by enhancing India’s position within ASEAN orbit, the countries of Southeast Asia restored the ancient propinquity and re-established a kinship that both civilizations had in the past. India and ASEAN are no ‘awkward strangers’. They have been neighbours and good friends in time, space and existence for as long as history can enumerate. There is evidence of a shared legacy in the myths and legends, religion and culture, crafts and arts, the languages the people speak and the adventurous business and trade that took place centuries ago. The advent of Buddhism and its unfolding in Southeast Asia remains a glorious chapter in itself and reminds of the ancient and historic links between India and Southeast Asia. Unfortunately, these bonds had weakened because many of these countries took different routes in their paths to progress after emerging from the yoke of colonialism.¹ The purpose of this article is to analyse the changing perception of India’s ASEAN policy in the post-Cold War era.

With the end of the Second World War, the emergence of Cold War placed the Indian foreign policy-makers in a serious dilemma. In this new international environment, India developed an alternative model of survival for the newly independent countries of the world. India chose to pursue its objective of peace not by joining any military alliance, but by judging an issue on its merits. In a world where alliances and counter-alliances were the order of the day, India did not wish to be drawn into any alliance. This initiative later came to be known as non-alignment, which emanated out of strategic compulsions and socioeconomic and political requirements of the country at that point of time. New Delhi’s response to the bipolar world in the post-Second World War period, therefore, evolved differently from the Southeast Asian countries, most of which were entangled in Cold War military alliances.

The Association of Southeast Asian Nations (ASEAN) was founded on 8 August 1967 in Bangkok. This regional organization was established in order to promote economic cooperation and welfare of the people in the Southeast Asian region. The members of this regional organization came under one umbrella with three main objectives in mind: to promote economic, social and cultural development of the region through cooperative programmes; to safeguard political and economic stability of the region against big power rivalry; and to serve as a forum for the resolution of intra-regional differences. This regional organization was no doubt a product of the Cold War and was set up with the expressed intention of containing communism. It started with five members (Indonesia, Malaysia, Singapore, Thailand and the Philippines) and at present consists of 10 members (Brunei joined in 1984, Vietnam in 1995, Laos and Myanmar in 1997, and Cambodia in 1999). After more than 38 years of operation, the ASEAN appears to us as the most successful experiment in Third World regionalism. The economic success of this regional organization (since 1977) attracted many countries outside theregion to develop better linkages.

India and ASEAN remained maladroit aliens during the Cold War days and their ties lacked real essence. Although New Delhi maintained diplomatic relations with the association members at the bilateral level, it failed to keep a contact mechanism with ASEAN at the institutional level. This indifferent attitude of India towards ASEAN was both a result of the East–West antagonism and the Sino-Soviet rift. India’s indifference in political relationships and weak economic links with ASEAN were caused due to their differences in perception and behaviour in the field of security and the related issue of great power activities in the Southeast Asian region. India’s close links with the former Soviet Union and its political leaning towards Vietnam and Cambodia irked many countries of Southeast Asia. Fortunately, this state of relations between India and ASEAN changed with the end of the Cold War and the consequent unshackling of the Indian economy. So, it was not a coincidence that a formal association with ASEAN came about only in the wake of such changes. Rather, it demanded the transcendence of certain important factors that had hindered their relations at various times in the past.

Asean: Through the Prism of Indian Foreign-Policy Makers

India’s ties with ASEAN since 1967 till the fall of the former Soviet Union remained ambivalent. India was not among those countries who fervently welcomed the establishment of ASEAN in 1967. At the same time, it did not join those countries that condemned the association. In effect, New Delhi’s posture towards ASEAN during that time was rather indistinct. It regarded ASEAN as a copy of the South East Asia Treaty Organization (SEATO) though at the same time she grudgingly acknowledged it as an exposition of regional will. India’s indifference towards ASEAN originated from the fact that this regional grouping was of an exclusive sort with a pronounced pro-Western orientation.² One Indian scholar³ found four important factors which were mainly responsible for New Delhi’s indistinct attitude towards ASEAN. These were: (1) Indonesia, the natural and de facto leader of the ASEAN, feared India domination; (2) India’s anti-China feeling may have had an adverse effect on Singapore’s ethnic Chinese population; (3) Thailand and the Philippines were opposed to India’s non-alignment and were pro-United States; (4) Malaysia was favourable to India’s entry but could not do so organizationally and established bilateral political and economic relations with her. This indifferent attitude induced a distance between New Delhi and ASEAN. India’s active interest towards this region began to grow in the context of ASEAN’s Zone of Peace, Freedom and Neutrality (ZOPFAN) declaration of 1972. This proposal of ASEAN, provided the first substantial signal for New Delhi’s proper estimation of the association. However, this new perception in New Delhi about ASEAN’s independent posture received a big jolt when suspicion began to develop in the ASEAN capitals following the Indo-Soviet Treaty of 1971 and the onset of hostilities in the South Asian region. Most of the ASEAN members sharply reacted to New Delhi’s role in the liberation movement of Bangladesh and its pro-Soviet tilt of its foreign policy. Unfortunately, New Delhi never tried to make any diplomatic efforts to erase such an outlook from the minds of the policy-makers of ASEAN countries.

With the end of the Second Indochina War and the withdrawal of US troops from the Indochina states in April 1975, Southeast Asia seemed to be temporarily relieved of the presence of extra-regional powers. In this changed environment of Southeast Asia, India not only welcomed the new government in Hanoi immeditely after its reunification in July 1976, but also hailed the ASEAN summit held in Bali in February 1976 as an effort to consolidate peace and stability in the entire Southeast Asian region, and extended its cooperation with ASEAN as a regional organization for the first since its inception.

It is true that economic cooperation is listed in the ASEAN declaration and other documents as the first aim of the regional forum, but politics has hitherto occupied the front seat in all its deliberations and in its functioning, determining ASEAN relations with outside powers including India. In normal circumstances, New Delhi and the ASEAN countries should have developed closer links; but ASEAN, as an organization, has preferred to develop relations with members of the Organization of Economic Cooperation and Development (OECD) rather than India. A system of annual dialogue with an institutionalized forum was established with the EEC in 1972, Australia in 1974, New Zealand in 1975, Japan, Canada, the USA and UNDP in 1977 and with South Korea in 1991. Although viable economic relations, including trade, continued between India and all the members of ASEAN, no formal links were established with the ASEAN in the initial years. This unwillingness of ASEAN to develop better economic ties with India was primarily due to New Delhi’s closed and non-attractive economic structure. India did not figure prominently in ASEAN calculations because of its economic controls and regulations and its failure to offer sufficient incentives to the ASEAN states and thereby emerge as the natural choice for a formal dialogue partner like the others. Although some ASEAN members did maintain the idea of beneficial economic collaboration with New Delhi in specified areas, it was primarily at the bilateral and not at the organizational level. Despite this low profile accorded to India by the ASEAN, New Delhi for the first time sounded this Southeast Asian regional organization on the possibility of institutionalizing a regular India–ASEAN dialogue, under the leadership of Foreign Minister Y.B. Chavan in 1976. This dialogue initiative was perceived by New Delhi as facilitating potential economic links in the area of joint industrial ventures. Unfortunately, this dialogue initiative was short-lived and it did not extend a formal invitation for dialogue to New Delhi.

Meanwhile, in March 1977, the Janata Party had come to power by defeating the Congress led by Indira Gandhi in the sixth Lok Sabha elections. Soon after assuming power, Prime Minister Morarji Desai explained the Indian foreign policy by stating: ‘Foreign policy should not be based on the fear that its pursuit might annoy others…. An honest straightforward and principled approach is always the best way of securing national interest’. He then said that the main purpose of India’s foreign policy was to establish world peace and from this followed its policy of non-alignment. He asked the ambassadors and high commissioners to ‘offer’ friendship and not to ‘impose’ it.⁴ At the meeting of the coordinating bureau of non-aligned countries held in New Delhi on 4 April 1977, Morarji Desai said India would remain non-aligned ‘in the real sense of the term’. India’s policy of nonalignment represented a national consensus and was a ‘national article of faith’, he added. The Janata Party firmly reiterated that they would follow a policy of ‘genuine’ non-alignment. While explaining the real meaning of the term ‘genuine’, Foreign Minister Atal Behari Vajpayee said:

When we decided to use the adjective ‘genuine’, we had two things in mind. First, the entire non-alignment has to be developed on the basis of fundamental principles which have guided the movement since its inception. Second, the basic philosophy of the movement is that all international issues should be judged on merit. The concept of neutrality has to be positive. The policy must be pursued in such a manner that the countries of the world should feel that India is really nonaligned. We not only have to be nonaligned but we must appear to be nonaligned.⁵

Based on this foreign policy approach, the Janata government during its short tenure tried to develop better political and economic links with ASEAN and maintain its momentum through various bilateral agreements with many ASEAN members. ASEAN responded to this overture by sending its then Secretary General, Datuk Ali bin Abdullah, on an exploratory mission to New Delhi in November 1978. The ASEAN secretary general held a round of discussions with the Indian minister of state, Samarendra Kundu, and Foreign Minister Atal Behari Vajpayee on 29 November 1978, and the discussions touched on how economic ties between India and ASEAN could be extended and how New Delhi could involve itself in the economic development of the ASEAN countries. The secretary general, however, noted that the ASEAN countries had an adverse balance of trade with India which he felt should be altered.⁶ After the preliminary talks, a memo was submitted by the Indian ambassador at Jakarta to the ASEAN secretariat in March 1979, formally requesting New Delhi’s participation as an observer (dialogue partner) on the same basis as Japan, Australia, the US and the European Community. Unfortunately, the ASEAN leaders did not give due importance to India’s request, because it was a developing country faced with many problems and unable to evolve a larger scope to develop ties with that forum. Thus, we see the Janata government was keen to keep India’s ties with ASEAN members independent of its ties with external powers so as to steer clear of the distortions that such ties normally cause in a trans-regional relationship⁷ and made efforts to seek a firm link with this regional body. However, this initiative by New Delhi fell short of its mission for reasons beyond its control due to certain power alterations in both South and Southeast Asian region.

On 7 January 1979, the pro-Chinese Pol Pot government in Kampuchea was overthrown by the Vietnamese army and the Heng Samrin regime came to power. Following this event, China invaded Vietnam in February 1979. These developments in the Indochina region were viewed with great alarm by the ASEAN, which abandoned its neutral stand and firmly called for the ‘immediate and total withdrawal of foreign forces from Kampuchean territory.’ From 20–25 January 1979, the Malaysian Prime Minister, Data Hussein Bin Onn, visited India with the objective to procure support in favour of ASEAN countries stand on Kampuchean crisis. But the mission failed. Two months later, the Malaysian foreign minister again visited New Delhi. Unfortunately, this mission also failed to receive any positive commitment from the Janata government with reference to the Kampuchean problem, and New Delhi remained firmly non-committal on this issue. During this year, a number of other high-level delegations from different Southeast Asian countries visited India, but New Delhi’s lukewarm response greatly upset some members of ASEAN. New Delhi’s neutral stand on the Kampuchean problem irked the ASEAN states and they branded this decision as ‘a blow toASEAN’. This stand of New Delhi led the ASEAN members to postpone the consideration of India’s request for a dialogue partnership at the informal meeting of the ASEAN foreign ministers in Kuala Lumpur in August 1979 since it had irritated and frustrated the ASEAN members.⁸

During its short tenure, the Janata government had neither recognized the Heng Samrin government in Kampuchean nor did it continue to recognize the socalled Democratic Kampuchea led by Pol Pot. The overall policy of the Janata government towards the Kampuchean problem clearly revealed the nature of its non-aligned foreign policy. It was critical both of the Chinese invasion of Vietnam and the presence of the Vietnamese troops in Kampuchea, though it was more emphatic in its condemnation of the former than the latter. It acknowledged neither the right of Pol Pot nor of Heng Samrin to represent Kampuchea. Although it was critical of India’s special leaning towards the Soviet Union during Mrs Gandhi’s period, it did not take any step to antagonize Moscow, and failed to support the Soviet policy on the Kampuchean issue. It thought in terms of bilateral relations, and not in terms of supporting or opposing the global strategy of any big power. It, thus, appears that the Janata government tried to judge every issue separately on its merits and with reference to India’s national interests. This bilateral approach and the policy of judging the merit of every issue separately may not be conducive for lasting friendship with any power and may create difficulties in developing an integrated foreign policy, but that was possibly the meaning of the Janata’s ‘genuine non-alignment.’ Such a non-aligned policy was applied to the Kampuchean issue also.⁹ The Janata government’s firm commitment to its policy of ‘genuine non-alignment’ virtually derailed plans for any dialogue relationship with ASEAN and, by the end of 1979, it had become crystal clear that ASEAN was severely reluctant to examine the issue of a dialogue partnership with India in exclusive terms and chose to link it with New Delhi’s overall policy towards Kampuchea.

India’s Pro-Kampuchea Shift in Policy and Its Impact on Asean

In January 1980, the seventh Lok Sabha elections took place and Indira Gandhi’s Congress Party returned to power. In its election manifesto, the Indian National Congress (Indira) party promised that, if returned to power, it would ‘recognize the new revolutionary Government of Kampuchea’.¹⁰ The inclusion of recognition question of the new government of Kampuchea within the election manifesto was of the Congress party was an awkward issue in India’s election history. Therefore, the victory of Mrs Gandhi in the seventh Lok Sabha elections was clearly the first important step in the process of recognition of the Heng Samrin government in Kampuchea and no doubt generated uneasiness among the ASEAN members. The ASEAN countries (mainly Malaysia and Singapore) tried to restrain New Delhi from following such a policy and immediately prompted their hectic diplomatic activities. As soon as Mrs Gandhi assumed power, the deputy prime minister of Malaysia, Mahathir bin Mohamad, handed over to her a note on behalf of ASEAN and requested New Delhi not to recognize the Heng Samrin government. The ASEAN officials also expressed their fear that any Indian decision to recognize the Heng Samrin government might result in other non-aligned countries making similar moves and thus undermine the ASEAN efforts to bring about a political solution of the Kampuchean problem. S. Rajaratham, the deputy prime minister for foreign affairs of Singapore, in an interview at Singapore said that India’s recognition of the Heng Samrin government would have ‘grave implications’. Being the largest non-communist country in Asia, which still wielded moral and political influence on many, India’s recognition, he pointed out, would amount to endorsing aggression and forcible installation of puppet regimes. He regretted that India had not been able to take an independent stand on Kampuchea because of its close links with the Soviet Union. The purchase of a huge quantity of military hardware and other items had made New Delhi heavily dependent on Moscow. India’s stand on the issue had become highly suspect of being ‘too pro-Soviet’ to the noncommunist countries and its credibility as a nonaligned country was gradually eroding. Finally, he pointed out that India was doing everything to promote the Soviet line, though he had expected India to take an independent line ‘which would be vital for our survival’.¹¹ Amidst such apprehension, the ASEAN members for the first time extended a formal invitation to India to institute a ‘dialogue’, possibly to dissuade New Delhi from recognizing the new Kampuchean regime.

In May 1980, Eric Gonsalves, secretary in the ministry of external affairs, visited Malaysia. Indian efforts were directed towards seeking some understanding from the ASEAN countries so that negotiations between ASEAN and the Indochina states could be more effective. It was in the wake of these expectations that the first ever official-level meeting between ASEAN and India was held in Kuala Lumpur on 15–16 May 1980. During this meeting, the five ASEAN directors general and Eric Gonsalves agreed to take several steps to increase cooperation in trade, industry, scientific and technical fields. This meeting also paved the way for a dialogue on economic cooperation between the two sides on a regular basis. It was agreed that both sides would consult each other to identify complementariness and products of import/export interest to ASEAN and India. However, the striking feature of this meeting was that it had provided an opportunity to discuss regional issues such as Kampuchea. ASEAN was more inclined to discuss this issue than the question of economic ties. Unfortunately, the differences on the question of Kampuchea scuttled all prospects of implementing what was agreed as a result of the first dialogue. ASEAN offered a dialogue in an attempt to head off the damage that could be caused by a hasty Indian recognition of Kampuchea. In felt that by engaging India in these discussions, it might be able to delay New Delhi’s decision on the question of recognition.

After one month, Indian Foreign Minister P.V Narasimha Rao was invited to join in the dialogue with ASEAN along with other partners on 27–28 June 1980. The ASEAN invitation to the third world countries would no doubt have had a symbolic significance for India. Unfortunately, at the last moment, the Indian minister cancelled his visit due to his ‘mother’s illness’. In his message to the Malaysian foreign minister, Tunku Ahmad Rithaudden, who was also the chairman of the ASEAN standing committee, P.V Narasimha Rao wrote ‘personal circumstances have, however, developed at the last minute which precludes the possibility of my taking advantage of the valuable opportunity’,¹² and regretted the last minute changes and apologized for the inconvenience caused. This event fuelled wide speculation. The ASEAN ministers thought that this was a ‘diplomatic illness’ and New Delhi intentionally wanted to avoid an awkward situation requiring an explanation to the assembled leaders of the ASEAN countries of India’s intention to recognize the Heng Samrin regime. ASEAN’s apprehensions were not groundless. Soon after that, on 7 July 1980, New Delhi announced its recognition of the Heng Samrin regime in Kampuchea¹³ and alienated what little goodwill it enjoyed in the ASEAN region. Mrs Gandhi’s recognition of the Heng Samrin government bear a five-fold explanation. In decreasing order of importance, it acknowledged the reality of the regime actually in power. It reflected governmental and popular revulsion at the genocidal Pol Pot regime. It registered an essentially emotional desire to demonstrate solidarity with Vietnam. It expressed India’s adversarial relationship with China. And finally least important, it comforted Moscow in its hour of need.¹⁴ The recognition issue was, therefore, a diplomatic victory for Hanoi, Moscow and Phnom Penh, which resulted in strengthening the People’s Republic of Kampuchea’s (PPK) diplomatic credentials at the United Nations and in the nonaligned movement and gave the Vietnamese government a ‘security relief’ from the perspective of its own national interests. Expectedly, New Delhi’s stand on Kampuchea was not favourably looked upon by the ASEAN countries and India’s ongoing dialogue process with them received a severe setback. While the ASEAN countries perceived these developments as a serious threat to their security as well as a major challenge to its diplomatic effort, India looked at the entire matter from a different angle. In New Delhi’s calculations, a dialogue partnership with ASEAN did not offer any immediate and palpable gains—political or economic. On balance, Indira Gandhi’s Congress government probably felt that it would stand to gain more strategic expediency if it accorded diplomatic recognition to the Heng Samrin government.¹⁵ It is possible to argue, therefore, that unlike the Janata government, the Congress government preferred the Heng Samrin to the Pol Pot government from a moral and humanitarian point of view¹⁶ and obviously thought it prudent to take an identical stand with that of the Soviet Union because that would cater to New Delhi’s national interests. The Janata government maintained friendship with the Soviet Union, but did not support the global strategy of Kremlin. It tried to judge different issues in a somewhat isolated manner and not against the general background of its friendship with the Soviet Union. Friendship with the USSR was treated simply as bilateral affairs by the Janata government, while Mrs Gandhi considered it to be the ‘sheet anchor’ of India’s foreign policy. She judged almost all issues of international significance mainly from the viewpoint of the Indo–Soviet alliance. Her major objective was to consolidate and promote this alliance and she judged other issues in the light of this objective. India’s pro-Soviet stand was not favourably looked upon by the ASEAN states and it practically negated New Delhi’s chances of improving her economic relations with the regional forum. For ASEAN too, the geo-political effects of the conflict were becoming more important than pursuing a dialogue partnership with New Delhi. Thus, between the early and mid-1980s, India–ASEAN ties almost became marginalized.

The Cambodian Peace Process: New Delhi’s Attempt to Restructure Ties with Asean

The political differences between India and ASEAN with reference to the Kampuchea issue prevented a head start in bilateral ties between them. In spite of this state of relations and in order to promote her own objectives in Southeast Asia and to arrest the course of ASEAN alienation, New Delhi made various attempts in the 1980s to improve relations with the ASEAN states, especially with Indonesia and Malaysia. As a part of a process to mend bridges with ASEAN, Indira Gandhi visited Indonesia and the Philippines in October 1981. Indian Foreign Minister, P.V. Narasimha Rao, also made a two-day official trip to Malaysia. These two high-level visits were seen as evidence of New Delhi’s desire to clarify its stand on Kampuchea and open a dialogue with ASEAN. After Indira Gandhi, India under the Prime Ministership of Rajiv Gandhi offered hopes for a more flexible and positive approach towards ASEAN, particularly with reference to the Kampuchean issue. Further, the liberalization policy initiated by Rajiv Gandhi and the huge Indian market created by the vast Indian middle class, provided a major incentive to find ways and means to intensify interactions between India and ASEAN. This resulted in a major shift in ASEAN’s policy and, in August 1985, it invited India to exert its influence in reaching a political settlement in Indochina. During this period, India tried to play the role of an honest broker between Vietnam and ASEAN, and initiated efforts to arrive at a negotiated political settlement in Kampuchea with the cooperation of all the opposing parties. The main thrust in this direction was to reduce the gap in the perceptions between the ASEAN and the Indochina states and to foster a dialogue between the Kampuchean factions.

A momentous breakthrough in this impasse was achieved with the start of the dialogue between Prime Minister Hun Sen of Cambodia and Prince Norodom Sihanouk. The visit of the Indian minister of state for external affairs, Natwar Singh, to the ASEAN countries in April 1987 and to the Indochina states in June July 1987, plus Prime Minister Rajiv Gandhi’s visit to Indonesia and Thailand in October 1986, paved the way for a serious attempt to arrive at a negotiated settlement.¹⁷ New Delhi’s diplomatic shuttle resulted in a historic breakthrough in the nine-year impasse and set the ball rolling towards a possible settlement. Peace was finally established in the Indochina states with the help of the United Nations Transitional Authority in Cambodia (UNTAC) in early 1993. In this long drawn process, New Delhi’s ‘shuttle diplomacy’ consistently played a major and positive role, which largely compensated her hitherto pro-Soviet leanings in the eyes of the members of ASEAN and considerably brightened her image in the Southeast Asian region.¹⁸

Shifts in Indian Foreign Policy Priorities After the End of the Cold War

The period between 1989 and 1991, should be regarded as a watershed in the history of world politics. The reunification of Germany, the collapse of the Communist Parties in Eastern Europe and the Soviet Union and the eventual disintegration of the latter, the end of the Cold War, and the impact of the Gulf War on the functioning of the United Nations Security Council engendered a new multipolar world and the emergence of a new global, political, economic and security order, characterized by positional shifts by and among all the actors. In order to adapt itself to this new global order, India, under the leadership of Prime Minister P.V Narasimha Rao, designed policies to integrate the Indian economy into the global market economy. It was guided more by economic imperatives and less by political rhetoric. Thus, the sudden fall of the former Soviet Union largely impelled New Delhi to search for new trade doorway and links throughout the world, which resulted in a drastic paradigm shift in India’s overall foreign policy outlook. The evolving structural similarities between the economies of the ASEAN countries and India, and partial withdrawal of the mixed economy system by New Delhi, naturally attracted many Southeast Asian countries to develop better economic linkages with India. ASEAN now saw India as a favourable economic and strategic partner and took various initiatives to promote better ties with New Delhi. India’s shift in foreign policy priority towards ASEAN was shown in bold relief when the ministry of external affairs, in its Annual Report: 1992–93, clearly stated that ‘India [has] decided to give a special policy thrust to its relations with the ASEAN,¹⁹ and ‘desired improved relations with individual countries in the ASEAN region and with ASEAN as a collective entity.²⁰

Similarly, this favourable response did evince some amount of positive response from the ASEAN countries. Attracted by the new economic policy of India and with a growing and affluent middle class of about 150 to 250 million out of a total of 900 million people, the ASEAN countries in the post-Cold War globalized phase, vividly realized the growing importance of the role of economic diplomacy in relations between nations and were convinced of the seriousness of India in her liberalization policy. New Delhi became the ‘sectoral dialogue’ partner of ASEAN in January 1992 and was later elevated to the status of ‘full dialogue’ partner in December 1995. Realizing its potential to contribute to regional security and economic development, India was made a member of the ARF in 1996, and a Summit partner of ASEAN called ASEAN Plus One since 2002. With these mutually reciprocal interactions, ASEAN’s closer ties with India began to take shape in world politics by displaying the decades of relative ignorance of an economically emerging, politically matured and strategically vital dynamic India in the orbit of the Southeast Asian region. Further, ASEAN’s appreciation of India’s presence in the Southeast Asian region was tacitly preferred as a counterbalancing force against China due to the latter’s sustained penetration in the Spratly island disputes in the South China Sea and withdrawal of US military bases from the Philippines in 1992. China sees India as a potential rival to its dreams of major power status in Asia that systematically tries to depreciate New Delhi’s standing and capacities in all possible ways.

India’s ‘Look East’ Policy Unveiled

India’s new regionalism idea in its foreign policy agenda towards ASEAN was unveiled by Indian Prime Minister P.V Narasimha Rao through his Singapore Lecture in September 1994. In this speech, he clearly spelt out the basic outlines of India’s Look East model and tried to convince his interlocutors that India was ‘worth their time and money’ and that ‘invest in India has been an investment in the future–a future not only for the investor but for a population of one billion which will remain a force for stability for the world’, and insisted on the fact that ‘in return, countries of the Asia-Pacific will find in India a reliable partner, a vast market…’²¹ Following this speech, the Government of India for the first time officially acknowledged and used the term ‘Look East’ as a major agenda of its foreign policy fabric. The MEA Annual Report of 1995–96 used the term ‘Look East’ in its report and officially accepted this policy as part of its major foreign policy agenda. While highlighting the importance of this policy, the report stated: ‘As a part of India’s ‘Look East’ policy, efforts to strengthen the already existing good relations between India and the countries of Asia-Pacific and Southeast Asia continued during the year’,²² and pointed ‘to the intrinsic and emerging complementaries between the dynamic and fast consolidating economies of ASEAN and the large economy of India’.²³ Thus, what we understand from the above statement is that New Delhi’s ‘Look East’ policy has been officially professed through its ministry of external affairs report in 1995–96. However, the entire policy was actually instituted with the announcement of its new economic policy in 1991, in the context of changing global order. In other words, the ‘Look East’ policy was a product of New Delhi’s reconfiguration of a regionalism and fundamental transformation of its foreign policy priorities. Thus, India’s ‘Look East’ policy is only a decade old and has yet to achieve maturity. The present trend of this policy has been no doubt positive, but it has yet to show results.

On 4 September 2003, the external affairs minister of India, Yashwant Sinha, in a speech at the plenary session of the second India ASEAN business summit, held at New Delhi, officially said:

India’s ‘Look East’ policy has now entered its Phase-II. Phase-I was focussed primarily on the ASEAN countries and on trade and investment linkages. Phase-II is characterised by an expanded definition of “East” extending from Australia to China and East Asia with ASEAN as its core. Phase-II marks a shift in focus from exclusively economic issues to economic and security issues including joint efforts to protect sea lanes, and coordination on counter terrorism. On the economic side, Phase-II is also characterized by arrangements for FTAs and establishing of institutional economic linkages between the countries of the region and India.²⁴

Elaborating on this on 5 November 2003 in New Delhi, Sinha said:

The foreign policy of any country, I suppose must aim at a comprehensive, productive, meaningful and mutually beneficial relationships with all countries in the world. But no country can afford not to be engaged with its neighbourhood. The concept of neighbourhood has also undergone a change. Today, it is not the immediate neighbourhood alone but it is the extended neighbourhood. The ‘near’ far as some people describe it or the ‘fear neighbourhood’ as some others describe it. Therefore, India’s engagement with this extended neighbourhood should not come as a surprise.

He then pointed out that:

It was only in the last decade of the last century that Prime Minister Narasimha Rao came out with his ‘Look East’ policy and after that we have been engaging countries in East Asia. We felt that if we engage the 10 countries of ASEAN, that was engagement with East Asia. And, it is also true that in some of my recent speeches, I have said that we have entered Phase-II of our Look East Policy, which is both, more comprehensive in its coverage territorially and materially. In terms of territorial expanse, besides the 10 countries in ASEAN, we are engaged with North East Asia, with Japan, with China and the Koreas. Down South, there is much greater engagement with Australia and with New Zealand. Therefore, when we talk of India-East Asia engagement we are including this whole region.²⁵

The external affairs minister of India, while further elaborating on New Delhi’s ‘Look East’ Phase-II policy after the Bali agreement of India-ASEAN Summit in October 2003, said ‘engagement with ASEAN has acquired a deeper meaning. With South Korea, Japan and China also having their own free trade agreements with ASEAN, perhaps, we are on the threshold of a much larger conglomeration of nations, perhaps, at the threshold of an Asian free trade area. Because if those countries have free trade with ASEAN, then, we are also engaging each other in a more extensive context.’ He also underlined a number of other features that define the Phase-II of India’s ‘Look East’ policy.

First of these refer to the larger geographic scope of the initiative—from the initial focus on Southeast Asia it now incorporates East Asia and South Pacific. It was felt by the Indian foreign policy-makers that South Korea’s emergence as a major economic partner of India, the growing economic ties with Japan and dramatic improvement of ties with China, and the untapped potential market of Australia and the South Pacific could strengthen India’s newly initiated ‘Look East’ policy.

The second feature was the multi-directional defence diplomacy in Asia. New Delhi felt that the movement needed to be steered away from exclusive focus on economic issues in Phase-I to a broader agenda in Phase-II that involved security cooperation, including joint operations to protect sea-lanes and pooling resources in the war against terrorism. The military contacts and joint exercises, which India started with ASEAN countries on a low level in the early 1990s, have expanded into full-fledged defence cooperation. India had also slowly started to put in place arrangements for regular access to ports in Southeast Asia. Its defence collaboration has widened to include Japan, South Korea and China.

Third, emphasis towards physical connectivity and transportation links with Southeast Asian countries remain an important component of India’s revised ‘Look East’ policy. It was felt by the foreign policy-makers of India that little trade with Southeast Asia during the Cold War years practically withered away the consciousness of the idea of an extended neighbourhood, and there was no reason to think of transport links to Southeast Asia. However, in the context of a rapidly changing global order, the establishment of air and land links to East and Southeast Asia have emerged as an essential ingredient of Phase-II of the policy. As part of its road diplomacy, New Delhi is building its transport corridors with the region. These include the India–Myanmar–Thailand trilateral highway and the DelhiHanoi railway line as part of the Ganga–Mekong project.

Fourth, the ‘Look East’ policy in Phase-II has opened the window for the first time since 1947, to break out of the political confines of the South Asian subcontinent that have poorly limited India’s grand strategic options. The ‘Look East’ diplomacy has for the first time allowed India to break the artificial political barriers between the South and Southeast Asia. The First Summit of the Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation (BIMSTEC), held in July 2004, in Thailand provided the opportunity is the five nations of the South Asia (Bangladesh, Sri Lanka, India, Nepal and Bhutan) together with two countries from Southeast Asia, Myanmar and Thailand, to strengthen regional cooperation among countries on the rim of, or those seeking access to, the Bay of Bengal. It might also act as a bridge of mutual understanding and cooperation between South and Southeast Asia,²⁶ and India would be in a position to finally nullifY the veto that Pakistan had exercised over economic linkages in the subcontinent through the South Asian Association for Regional Cooperation (SAARC). Moreover, the latter is now largely moribund due to a standoff between India and Pakistan.

Finally, it has been often argued that India’s ‘Look East’ policy was driven, at least in part, by an ineluctable rivalry with China. While competition is a reality, the last few years have amply displayed the possibilities of better Sino-Indian ties. India’s ‘Look East’ policy in Phase-II is neither driven by a fear of China nor by a desire to become a frontline state against it. The major focus of bilateral cooperation, as outlined by Indian Prime Minister Atal Behari Vajpayee, during his trip to China in June 2003, was mainly targeted at solving long-pending bilateral problems on a pragmatic basis and fully explored the new opportunities for bilateral economic cooperation.²⁷ Thus, in a nutshell, the second phase of India ‘Look East’ policy has been aimed at political partnerships, physical connectivity through road and railway links, free trade arrangements and defence cooperation.

Despite all this, India’s ties with the economically advanced countries of Southeast Asia have not yet evolved into a meaningful partnership in which both sides have a vital stake. Trade and investments in India by the principal ASEAN nations—Singapore, Malaysia, Thailand, Indonesia and the Philippines—have stagnated after an initial spurt, part because of ASEAN’s own preoccupation with the financial crisis in the region in 1997 and due to its disillusionment with New Delhi’s daunting procedural, requirements and an unresponsive bureaucracy. Further, a large number of important proposals, which have not been implemented even after protracted negotiations, severely damaged India’s image in Southeast Asia. Notwithstanding this, the period between the National Democratic Alliance (NDA) government (2000) to the present period, Indo-ASEAN bilateral links have received a major fillip. A thorough assessment of India’s ‘Look East’ policy clearly displays that it was not simply meant to improve relations with Southeast Asia but there were a number of other factors too. The ‘Look East’ policy neglected a multidimensional outlook to establish strategic links with many individual countries, evolve close political ties with ASEAN, and develop strong economic links with the region. It was no doubt an attempt to carve a place for India in the larger Asia-Pacific and also meant to showcase New Delhi’s economic potential for investments and trade.²⁸

India’s ‘Look East’ policy in its initial years has been mainly confined to confidence-building measures towards the countries and Southeast Asia. This resulted in New Delhi, in its early years, concentrating on Southeast Asia (i.e. Singapore, Malaysia, Thailand, Indonesia and the Philippines) and not others who were economically weak, politically vulnerable, or religiously indifferent (i.e. Vietnam, Cambodia, Laos, Myanmar and Brunei). This lack of priority in the first phase of India’s ‘Look East’ policy was mainly based on the following important reasons.

First, India’s incapability to explore its geographical proximity to ASEAN and its historical and cultural footprints with the Southeast Asian regional was largely due to its sluggish pace of reforms to liberalize its economy. The major anxiety in the ASEAN region has been the slow pace of approvals for the projects and slower implementation of the approval proposals due to narrow-minded bureaucrats, elite factionalism and the lack of stable leadership.²⁹ The existence of short duration governments in rapid succession in the early 1990s confounded many countries of Southeast Asia. The need to portray itself as a genuine economic reformer and to attract the economically developed countries of Southeast Asia, thus, remained the principal agenda of New Delhi in the early years of its ‘Look East’ diplomacy. This accounts for India’s low priority to the economically weak and geographically small countries of Southeast Asia, i.e., Vietnam, Cambodia, Laos, Myanmar and Brunei.

Second, in the initial years of ‘Look East’ policy, India mainly concentrated on establishing institutional links with the regional organizations. Although New Delhi could not become a member of the larger Asia-Pacific Economic Cooperation (APEC) forum and the Asia-Europe Consultative Mechanism (ASEM), it joined the ASEAN as a full dialogue partner and was later also made part of its security arm, the ASEAN Regional Forum (ARF), in June 1996. Through this membership, New Delhi established better ties with the economically advanced countries of Southeast Asia although this could not be repeated with others who were economically vulnerable and geographically tiny.³⁰

Third, the late entry of Vietnam as a new member of ASEAN in 1995, Laos and Myanmar in 1997 and Cambodia in 1999 was another pertinent reason behind the weak economic and political links with these countries. Moreover, New Delhi’s feeble economic and political relations with Brunei in the early 1990s were mainly caused by the latter’s quiescent role within the ASEAN forum.

Fourth, in the early years of India’s ‘Look East’ policy, New Delhi was basically drawing lessons from the economic success stories of the Southeast Asian region. However, the Tiger economies received a severe jolt in the wake of the financial crisis in 1997, though most of them have recovered considerably from that dark phase and returned to the high growth path. This period of uncertainty and recovery led to a natural downturn of India’s overall Southeast Asia ties.³¹

Fifth, internal ethnic unrest (e.g. between Chinese and Vietnamese and Central Highland problem in Vietnam, between Hmong and Pathet Lao in Laos, and between Khmer and Vietnamese in Cambodia), unemployment, uneven distribution of income, unfavourable demographic changes, human rights violations, environmental pollution, civil war and genocide, food security problem, transnational crimes and low-intensity conflicts and underdeveloped economic structures due to the economic backwardness of Cambodia, Laos, and Myanmar prevented India from developing better economic and strategic links with these countries.

Finally, Vietnam, Cambodia, Laos and Myanmar have suffered due to the globalization process, and thus for all these countries have failed to adjust to the complex process of transition from their close economic structure to a regime of open markets. Since these countries do not stand on an equal competitive footing with the more economically advanced countries of Southeast Asia, India’s ‘Look East’ policy towards the less developed and geographically small countries of Southeast Asia clearly constituted a low priority area for Indian foreign policy. Although, in its initial years of ‘Look East’ diplomacy, a number of important official visits and counter-visits took place between India and these countries, these bilateral visits failed to display any positive outcome of New Delhi’s priority towards these economically weak countries of Southeast Asia.³²

India’s ‘Look East’ Diplomacy: A New Impetus

India’s ‘Look East’ policy regained its momentum around late 2000 after the signing of the Mekong–Ganga Cooperation (MGC) in Vientiane among six neighbouring countries, namely, Cambodia, Laos, India, Myanmar, Thailand and Vietnam. The basic theme of this initiative outlines cooperation and focus on rapid economic development of the Mekong region countries in the areas of tourism, culture, education, transport and communication. Thus, the Vientaine declaration has institutionalized the MGC initiative and New Delhi’s integration in the Eurasian land bridge system through this initiative. This shift in New Delhi’s outlook towards Southeast Asia is mainly based on several important reasons.

First, drastic development of Indo-US ties substantially altered India’s ties with the countries of Southeast Asia. In March 2000, US President Bill Clinton visited India, resulting in a marked realignment of New Delhi’s geo-strategic and foreign economic ties. After decades of indifference, the improvement in Indo-US ties created a major spillover effect on New Delhi’s relation with ASEAN. The emergence of Bush administration, its decision to lift the nuclear sanctions against Pokhran II bomb blast in 1998 and the disaster striking the US on 11 September 2001, yielded the opportunity to realize the promise of a ‘natural alliance’ between New Delhi and Washington. This new equation with the US also paved the way for building better and more extensive security and political links with the American allies in the ASEAN, Japan, South Korea and Australia.

Second, the improvement of relations between India and China remains another important reason. Since late 1990s, New Delhi’s movement to come closer to Washington has decisively created the basis for addressing issues that divided India and China for long. It is in the context of a rapidly expanding Indo-US cooperation, which President Bill Clinton described as ‘re-discovering India’, the re-affirmation of India–Russia ‘strategic partnership’, greater uncertainty in Sino-US ties and the profound impact of the American war against global terrorism in the region that gave New Delhi and Beijing an opportunity to refashion their wary relationship. Both countries agreed on the need for a framework of broad-based dialogue on all issues of mutual concern, and accelerated the process of clarifying the Line of Control, and initiated the process of normalising their dispute over Sikkim and sought to liberate their relationship from Pakistan.³³ Furthermore, China’s inclusion into the World Trade Organization (WTO), its capacity to influence foreign direct investment (FDI) and its strategic and political influence in the region were the major reasons for New Delhi to engage the ASEAN countries. This heralded a new phase of improvement in Sino-Indian ties. During the visit to China on 23–24 June 2003, Prime Minister Atal Behari Vajpayee spoke of a ‘new step forward in strengthening the all-round cooperation between India and China in the new century.’³⁴

Third, India’s gains in relation with China gave her the scope to rethink its hitherto Myanmar policy. The inclusion of Myanmar in the ASEAN Regional Forum (ARF) in July 1996, followed by the status of full membership of ASEAN in July 1997, gave New Delhi the opportunity to share a common land border with an ASEAN member state. India’s emphasis on developing its eastward trade access to Myanmar led to the Indian government’s initiative to mend and enhance its historic ties with Myanmar³⁵ in spite of knowing fully well the economic weaknesses of Myanmar. New Delhi’s strategy to reshape its historical links and develop its common land border with Myanmar in order to alleviate the poverty and underdevelopment in the region has been designed mainly to reduce of chronic tensions in the Northeast region. Further, by taking advantage of Myanmar as a gateway to Southeast Asia, New Delhi seeks to covert the Northeast region from a security burden to a region of economic prosperity. Moreover, by improving the road route between India and Myanmar via Northeast, New Delhi will eventually connect a section of the Asian highway from Singapore to Istanbul. When completed, this entire Asian highway route will link Singapore with New Delhi in South Asia via Kuala Lumpur, Ho Chi Minh City, Phnom Penh, Vientiane, Bangkok, Yangon, Chiang Mai, Tamu, Mandalay, Kalemyo, Dhaka and Kolkata. India’s initiative to re-activate ties with Myanmar is greatly moulded by the gains that China has reaped by forging close ties in the last four decades with Myanmar, which made Beijing a reliable strategic partner of Myanmar. India’s approach has been not to challenge China’s strategic position in Myanmar, but to tacitly win over the minds of the Myanmar people by supporting the pro-democracy movement and to detach the military junta from Chinese influence strategically through its ‘Look East’ policy.³⁶

Fourth, the drastic changes in the global order in the late 1990s, and the appreciable number of visits by foreign dignitaries visits to India from all around the world, made it clear that India’s economic and political potential in the global platform has come to be recognized. The opening up of the Indian economy in the context of globalization and a stable government in New Delhi convinced the leading members of ASEAN to act more positively towards India. In the process of India–ASEAN dialogue, the leaders of ASEAN were firmly convinced that India could play a ‘major role’ in the region and might emerge as the ‘stabilising factor or influence’ to contain Chinese growing influence in the Southeast Asian region. Further, the motivation for ASEAN to welcome India as one of its partners is connected to how the regional forum is increasingly perceived by its main trading partners in the Western developed world. Since the Asian financial crisis and the threat of terrorism in the region, Western investors are generally scrutinizing potential investments in the Southeast Asian region more carefully.³⁷ Moreover, from the Indian perspective, China’s strategic ties with Pakistan has always pushed India to look inward towards South Asia. New Delhi’s foreign policy decision-makers perceived clearly that engagement with ASEAN, might both allow India to counter China’s influence in the ASEAN region and breakout from its South Asian obsession.

It needs to be added that, the Indian Prime Minister Atal Behari Vajpayee has re-motivated interest in India’s ‘Look East’ policy. This was evinced when he visited several Southeast Asian countries during the years 2000, 2001, 2002 and 2003. These visits were reciprocated during the same period by various dignitaries from Southeast—president of Vietnam in December 1999; president of Indonesia in February 2000 and April 2002; prime minister of Cambodia in February 2000; prime minister of Thailand in November 2001 and February 2002; prime minister of Singapore in January 2002; prime minister of Malaysia in October 2002; and prime minister of Laos in June 2003. New Delhi’s renewed interest in its ‘Look East’ policy was met by the visit of the secretary-general of ASEAN, Rudolfo Severino, to New Delhi in January 2001. In New Delhi, Severino held discussions with the Indian commerce minister on ways to develop trade and economic cooperation between India and ASEAN. These visits and counter-visits between India and the countries of Southeast Asia, are a testimony to India’s budding political understanding with the Southeast Asian region, by way of moulding the perceptions of political leaders, and through the development of bilateral and multilevel contacts.

Besides this, the issue of terrorism brought India and ASEAN closer to each other. The countries of Southeast Asia and India had been the worst sufferers of ethnic unrest, transnational crimes, low intensity conflicts and terrorism. This social unrest, be it in the form of guerrilla war, terrorism or low-intensity conflicts, often varies from one country to another and the presence of these significant internal security challenges is indicative of the lack of legitimacy of the nationstate structures of these countries. The perception of such common suffering of India and the countries of Southeast Asia took a different direction after the 11 September 2001 incident. This new threat of terrorism has really challenged the political, economic and security environment of all these countries and for that they decided to enhance their efforts in combating terrorism and other forms of violent social unrest. This resulted in both India and ASEAN agreeing to intensify security cooperation and joint efforts in combating terrorism. During his visit to India, the Thai prime minister on 26 November 2001, in a statement, said: ‘Thailand would welcome bilateral consultations and exchange of security-related information in the war against terrorism.’³⁸ He also added that: ‘Thailand has always recognized the threat of terrorism to the peace, security, progress and development of all nations across international borders. Combating terrorism in all forms must be part of a worldwide regional effort.’ Besides this, on 21 May 2002, the ASEAN members agreed to consider the possibility of working towards a common legislation to fight terrorism in the Southeast Asian region. India, being a ‘full dialogue’ partner, fully endorsed ASEAN’s stand and agreed to fight against terrorism and resolve this international menace. Like the ASEAN countries, India’s commitment to tackle the threats of terrorism remain amply clear, when Prime Minister Atal Behari Vajpayee, on 9 April 2002, in the ‘Annual Singapore Lecture 2002,’ categorically said:

We have to confront terrorism, which neither respects power, nor needs size…. We have crucial stakes in protecting our common commercial sea lanes, combating piracy, choking off narco-trade and curbing gumunning. We need to tackle this jointly in a determined manner, through regular exchange of experiences, information and intelligence.³⁹

He further added:

We grapple with a bewildering array of security threats, of which international terrorism has recently thrust itself dramatically into our consciousness. It has become crystal clear to the international community that terrorism can be tackled and curbed only with a global and comprehensive approach.⁴⁰

India’s re-looked, re-activated and re-accelerated ‘Look East’ policy reached its height when the first ASEAN–India summit took place on 5 November 2002 in Phnom Penh. A joint statement, issued at the end of the summit, highlighted both the principles as well as the future road map of ASEAN–India cooperation. There was a deep satisfaction that the cooperation had been taken to ‘a new height’. Further, it was recognized that cooperation, which was ‘rooted in close historical and cultural ties’, would serve ‘the fundamental interests of their respective peoples and peace, stability and prosperity of the Asia-Pacific region.’ The joint statement had highlighted three main components:

1. Promoting regional peace and stability, which included enhancing cooperation in combating terrorism, including non-traditional security threats; deepening of confidence-building measures (CBMs); India’s recognition and willingness to accede to the Treaty of Amity and Cooperation in Southeast Asia, and its support for the Southeast Asia Nuclear Weapon Free Zone (SEANWFZ) Treaty (which represented an important contribution of ASEAN towards strengthening security and stability in the region); as well as contributing to the process of global nuclear disarmament.⁴¹
2. Fostering closer economic and development cooperation, in recognition of the fact that ‘economic progress would also enhance regional peace, security and stability.’ Some of the concrete steps included the preparation of a draft ‘Framework Agreement to enhance ASEAN–India Economic Cooperation’; strengthening of cooperation in a wide range of areas in science and technology; India’s support to new ASEAN members on various initiatives, such as initiative on ASEAN integration (IAI), granting of preferential tariff treatment, developing the programme of action for the Mekong–Ganga Basin Development Cooperation (AMBDC) and the Greater-Mekong sub-region (GMS) programmes, facilitating the early entry of Cambodia, Lao PDR and Vietnam into the WTO and the need for further consolidating and enhancing ‘close economic relations by promoting trade and investment, facilitating market access, improving the flow of technology and enhancing the flow of and access to trade and investment related infrastructure.’⁴²
3. New directions in ASEAN–India relations, which included holding ASEAN–India summit annually, emphasized more people to people interaction not only through ‘dialogue at the level of policy makers, but also through exchange programmes of youth, media personnel, academics, business people, government officials and artists.’⁴³

While highlighting this summit as a major achievement of India’s ‘Look East’ policy, the ministry of external affair’s Annual Report: 2002–03 of India, described this event as

…a significant development in our relations with ASEAN countries, as India joined the ranks of a handful of countries with which ASEAN has summit dialogues, namely, China, Japan and South Korea. This upgradation is a natural culmination of 10 years of progressive engagement with ASEAN…. It is also a vindication of India’s ‘Look East’ policy which seeks to build on our historical and cultural ties with the region to create a mutually beneficial strategic and economic relationship.⁴⁴

In an editorial, The Hindu said this summit ‘marks the beginning of a new approach in the country’s economic relations with the rest of the world’ and saw a trade pact with ASEAN as ‘the best beginning since India has traditionally enjoyed many economic links with the region even if they have not grown to yield large volumes.’⁴⁵ However, to this overall positive commentary a cautionary note was also made by some analysts. Kalyani Shanker, in her article, cautioned that ‘the success of Phnom Penh could be measured only on the basis of its follow up actions. It is a long road with many hurdles.’⁴⁶ Thus, the first India–ASEAN summit clearly neglected India’s ‘Look East’ economic, political and strategic diplomacy and betrayed a far more pragmatic outlook in its operation.

India’s growing proximity with the Southeast Asian countries received more dynamism, when in October 2003, Prime Minister Atal Behari Vajpayee attended the second India–ASEAN summit in Bali, and sent a strong message about New Delhi’s seriousness and commitment to forge closer links with the region. At the Bali summit, three broad accords were signed on comprehensive economic cooperation, combating terrorism and facilitating India’s accession to the Treaty of Amity and Cooperation (TAC) with Southeast Asia respectively. The Indian prime minister also went a step further by offering a unilateral ‘open skies’ policy to specified Southeast Asian airlines, which will be allowed free to operate daily flights to the four metros in India and unlimited flights to 18 tourist destinations in India,⁴⁷ and also announced New Delhi’s decision to extend special and differential treatment to ASEAN countries depending on their levels of development to improve their market access to India. Taken together, these steps promise considerable improvement in economic, political and security cooperation between India and its Southeast Asian neighbours—extending from Myanmar to the Philippines.

Meanwhile, in May 2004, the United Progressive Alliance (UPA) under the prime ministership of Manmohan Singh, came into power and replaced the NDA government. This new government, like its predecessor, recognized India’s continued closer ties with the countries of Southeast Asia, and initiated a foreign policy which has purposeful, result-oriented and highly pro-active. The minister of external affairs, K. Natwar Singh, on 31 May 2004, in a meeting with top Indian diplomats from SAARC and ASEAN countries, categorically emphasized on the future policy options of New Delhi and firmly reiterated the political, economic and strategic importance of Southeast Asia in India’s foreign policy fabric. He said: ‘We will further strengthen bilateral relations with them, as well as our interaction with ASEAN since it constitutes a major dimension of our foreign policy.’ The same tendency found further support, when K. Natwar Singh in an interview to The Jakarta Post on 2 July 2004 said:

India’s foreign policy attaches primary importance to relations with our immediate neighbours in South Asia Association for Regional Cooperation (SAARC) as well as in ASEAN. We remain committed to strengthening India’s ‘Look East’ policy and to constructing a long-term partnership with ASEAN. Under the framework agreement concluded last year, we have just commenced negotiation of a free trade agreement. We are also working on an India–ASEAN summit in November this year. Politically, we completely share ASEAN’s vision and the principles of harmonious and good neighbouring relations established by the ASEAN Treaty of Amity and Cooperation, to which India acceded last year.⁴⁸

Thus, India’s ‘Look East’ policy by 2004 had attained a multidimensional and multipronged outlook.

India’s ASEAN policy reached its height when New Delhi, under the Prime Ministership of Manmohan Singh, participated in the third India–ASEAN summit which was held on 30 November 2004, in Vientiane. In this summit, India and the ASEAN members signed a historic partnership pact titled ‘India–ASEAN Partnership for Peace, Progress and Shared Prosperity.’ The pact outlines a multipronged action plan for boosting trade, investment, tourism, culture, sports and people to people contacts. The four-page partnership accord and nine-page action plan envisaged cooperation in multilateral forums, e.g., the WTO and addressed ‘common challenges of economic, food, human and energy security.’ The pact was signed to realize full potential of ASEAN–India Regional Investment and Trade Area (RITA), in accordance with the framework agreement on comprehensive economic cooperation signed by India and ASEAN in Bali, at the second ASEAN–India summit held in 2003. In a significant move to strengthen economic ties, India and ASEAN members have decided to set up a RITA to facilitate flow of foreign direct investment (FDI) in the region and enhance regional monetary and financial cooperation besides promoting an Asian market. The pact covers a longterm plan committed to creating a free trade area by 2011 with five ASEAN members (Brunei, Indonesia, Malaysia, Thailand and Singapore) and by 2016 with the rest of the members. It also laid special emphasis on infrastructure and transport development and cooperation in gas-related projects. As part of cooperation in infrastructure, the plan called for expediting completion of the India–Myanmar–Thailand trilateral highway and its extension to Laos and Cambodia apart from strengthening air connectivity, and focussed on investment promotion and double taxation avoidance. It also aimed to improve financial stability, regional monetary and financial cooperation apart from further developing the capital market in the region.

The leaders also vowed to cooperate in fighting international terrorism, transnational crimes like drug trafficking, arms smuggling, human trafficking, particularly of women and children, sea piracy and money laundering and proliferation of weapons of mass destruction too. The agreement also pledged to ‘build institutional linkages for intelligence and information sharing, exchange of information and cooperation in legal and enforcement matters.’⁴⁹ Thus, the Third India–ASEAN summit clearly lays out a short to medium term road map of India and ASEAN cooperation in various sectors, which, according to the ministry of external affairs of India, ‘forms the inner core of countries in ASEAN’s political relationship with the rest of the world.’⁵⁰ The multidimensional approach and the progress that India’s ‘Look East’ policy achieved so far clearly display a prospective cloudless sky of bilateral ties between India and ASEAN.

India’s Asean Policy: The Time for Stocktaking

India’s ASEAN policy in the post-Cold War years started with a lot of impetus but it was not a unilinear projection. One can delineate three separate phases of this policy. The first phase was marked by prodigious earnestness and a frenetic activity and exchanges. By mid-1990s, the ardour had cooled on both sides and the sentiment was further depressed by the 1997–98 financial crisis. In the third and the latest phase, interest was rekindled, and there has since been a visible strengthening of India–ASEAN ties.

As regional trade partners, India and ASEAN offer a huge and attractive interconnected, geographically contiguous market of more than 1.5 billion people. As the Southeast Asian region has some of the fastest-growing economies in the world, there is a compelling rationale for strengthening the business relationship between India and the ASEAN countries. For India, ASEAN as a region has displayed greater economic dynamism. ASEAN’s share in worldwide exports doubled between 1980 and 2000. Further, both India and ASEAN as a whole have attained growth in exports, at rates higher than the global average in the last two decades. Growth in India’s exports to ASEAN in the recent past has been much higher in comparison with other important destinations although imports from other regions have achieved faster growth than that from ASEAN. Thus, the economic dimension has acquired a significant place in India’s relations with these countries and the trade scenario between India and Southeast Asia was strengthened due to the emerging complementariness between their economies.

The deepening of the ties between India and ASEAN countries has grown considerably over the years. This resulted in closer of trade ties between India and Southeast Asian region, which is clear from the increase in India’s exports to this area. ASEAN accounted for 3.6 per cent of India’s exports to the world in 1980; by 1992, it increased to nearly 6 per cent. In terms of value, India’s exports to ASEAN had more than quadrupled since 1992. In later years, India’s trade in terms ofboth imports and exports with ASEAN increased very rapidly (See Table 13.1). India’s trade with the Southeast Asian countries, during the year 2003–2004 was $16,552.81 million and which remained four times more than that in 1992–93. However, the balance of trade, except for 1993–94, has always tilted in favour of the Southeast Asian countries, and has become more pronounced in the last six years. Such a huge gap results from the relatively higher deficits with Singapore and Malaysia and India’s simultaneous inability to generate a matching surplus elsewhere in the region. Among these Southeast Asian countries, Singapore and Malaysia have been India’s most prominent trading partners and India’s trade with Laos has been the least in value terms (as per 2003-04 trade statistics). However, the trade turnover declined in absolute terms in 1997 and 1998, as a result of the ‘East Asian financial crisis’, mostly due to a sharp fall in India’s exports. Since 1999, there has been a recovery and trade flows once again gathered its momentum towards the long-term trend. Thus, the increase in bilateral trade between India and the countries of Southeast Asia clearly exhibits how these countries are economically coming closer to each other in spite of the fact that some countries of Southeast Asia are over-represented in terms of New Delhi’s two-way trade relationship.

 

Table 13.1 India’s Trade with Southeast Asia

 

Besides this, in terms of commodities there exists a great diversity and multiplicity in terms of India’s exports to this region. India’s major exports to Southeast Asian countries include oil meals, edible nuts, cotton yarn, fabrics, drugs, pharmaceuticals and fine chemicals, inorganic, organic and agrochemicals, primary and semi-finished iron and steel, machinery and transport equipment, processed minerals, iron and steel bars, textile machinery, sugar and rice.⁵¹ Further, information technology including software development, consultancy and training in both software and hardware have generated a tremendous potential to enhance India’s exports. Overall, product concentration in India’s imports from ASEAN has been much higher than that in India’s exports to the region. Inter-temporal changes in product composition highlight the fact that India’s exports to ASEAN are becoming increasingly less concentrated than its imports from the region. Further, at the second India–ASEAN summit held in New Delhi and Mumbai in 2003, targets of $15 billion by 2005 and $30 billion by 2007 were set for India–ASEAN trade. The target of$30 billion was reiterated by Indian prime minister at the third ASEAN + India summit held in Vientiane on 30 November 2004.

Moreover, with economic liberalization, business in ASEAN are increasingly undertaking foreign direct investment (FDI) in India in crucial infrastructure sectors such as telecommunications, fuels, hotel and tourism services, heavy industry, chemicals, fertilizers, textiles, paper and pulp and food processing. Among ASEAN members, Malaysia, Thailand and Singapore have become the major source of FDI into India. From a negligible amount in 1991, cumulative approved FDI from ASEAN has so far reached more than $5 billion. Compared to other regional groupings, ASEAN is the fifth most important market in the world in terms of Indian exports and fourth in terms of imports. However, compared to other dialogue partners of ASEAN, the volume of trade and investment flows between India and ASEAN remained very low. Between 1993 and 2003, India–ASEAN bilateral trade increased at an annual rate of 11.22 per cent and India accounts for less than 2.0 per cent of ASEAN’s total trade and 0.2 per cent of FDI in the region. Similarly, the inflow of FDI from ASEAN during the same period was a modest figure of nearly $700 million, which represented 3.4 per cent of total FDI flows into India. Among the ASEAN countries, Malaysia, Thailand and Singapore have been the major investors in India. Thus, acknowledging this trend and recognizing the economic potentials of closer linkages, India has already entered into free trade area (FTA) with Thailand and Singapore, besides a comprehensive economic cooperation agreement with the island nation. India has also set up joint working groups with Malaysia, Indonesia, etc., for working towards comprehensive economic cooperation agreement. This framework agreement on comprehensive economic cooperation was actually signed by the leaders of ASEAN and India, at the second ASEAN–India summit in 2003at Bali, and laid a sound basis for the eventual establishment of an ASEAN–India Regional Trade and Investment Area (RTIA), which includes FTA in goods, services and investment. The FTA in goods was scheduled to be established by 2011 for Brunei, Singapore, Malaysia, Indonesia and Thailand, and by 2016 with the rest—the Philippines, Laos, Cambodia, Vietnam and Myanmar.

Following the Bali summit, the third India–ASEAN summit took place in Vientiane on 29–30 November 2004. This summit provided an opportunity to take stock of the progress made in India–ASEAN relations in the past years and considered new initiatives and measures to further strengthen cooperation in various sectors such as economic, science and technology, information and communication technology, agriculture, health and pharmaceutical and people to people contacts. In this summit, the New Delhi government has placed certain specific proposals to the ASEAN countries and among them the following are most important:

1. Contribution of $2.5 million to the India–ASEAN Cooperation Fund;
2. Extension of the proposed optical fibre link along India–Myanmar–Thailand highway to all ASEAN countries;
3. Launch of satellites and micro satellites from ASEAN member countries at concessional terms;
4. Concessionallines of credit up to $200 million to eligible ASEAN members; and
5. Joint research and development of medicines, stockpiling of rarely used drugs and exchange of germplasm of tropical fruits and vegetables. Following these proposals, the Indian Prime Minister Manmohan Singh, signed an agreement on ‘Indo–ASEAN Partnership for Peace, Progress and Shared Prosperity’, with the ASEAN countries and which clearly symbolizes that ‘India now forms the inner core of countries in ASEAN’s political relation ship with the rest of the world.’⁵²

Another landmark event of this ASEAN–India summit was that the Indian prime minister and ASEAN leaders flagged off the second leg of the India–ASEAN car rally in Vientiane on 30 November. (The first leg had been flagged off by the prime minister at Guwahati on 22 November 2005). This rally lasted for a period of 20 days and travelled across 11 countries covering nearly 8,000 kms. The principal objectives of this car rally are:

1. To demonstrate the proximity of India with the ASEAN countries;
2. To develop public awareness of India–ASEAN relations;
3. To promote connectivity, especially road-transport;
4. To enhance trade, investment, tourism and mass links between India and the ASEAN members.

Thus, in a nutshell, the third India–ASEAN summit clearly signalled the maturing of Indo–ASEAN relationship. India’s growing economic strength and positive independent role in world affairs induced ASEAN to follow greater engagement with New Delhi.

After the Vientiane summit, the fourth ASEAN–India summit took place in Malaysia on 13 December 2005. This meeting was chaired by Malaysian Prime Minister Abdullah Ahmad Badawi and attended by all ASEAN members and Indian Prime Minister Manmohan Singh. In this meeting, the ASEAN members expressed their deep satisfaction with the overall growth of ASEAN–India dialogue relations since the upgrading of these relations to the summit level in 2002, and discussed new avenues for further enhancing their partnership. In this respect, they acknowledged the need for ASEAN and India to strengthen their economic partnership in the face of the growing challenges of globalization, terrorism, rising oil prices and the threat severely posed by avian influenza and other emerging diseases. In this meeting, the Indian prime minister put forward six point proposals before the ASEAN community pertaining to various sectors:

1. Centres for English language training would be set up in Cambodia, Laos, Myanmar and Vietnam. The objective would be to equip students, civil servants, professionals and businessmen with adequate skills relating to English language and communication abilities;
2. A tele-medicine and tele-education network would be set up for Cambodia, Laos, Myanmar and Vietnam, and these countries would be linked with India through a satellite-based network;
3. A special training course be organized for diplomats from ASEAN countries through the foreign service institute;
4. An India–ASEAN technology summit in 2006 would be organised through the Department of Science and Technology and Confederation of Indian Industry (CII);
5. Education Consultants India Ltd would organize education fairs and a road show in ASEAN countries in 2006. Both public and private universities and educational institutions would be associated with the initiative;
6. An India–ASEAN IT ministerial and industry forum would be organized in 2006 through the Department of lnformation and Technology.⁵³

Besides these proposals, the Indian Prime Minister Manmohan Singh said New Delhi is ready to adopt a ‘flexible and pragmatic’ approach to the proposed free trade area (FTA) agreement with ASEAN, and made a forceful plea for a Pan-Asian FTA and for establishing an Asian economic community on the lines of the European Union and NAITA. In this meeting, the ASEAN countries thanked India for its contribution of $5 million to the ASEAN–India Cooperation Fund and $5 million towards ASEAN Development Fund. Finally, in this India–ASEAN summit, the ASEAN countries also welcomed New Delhi’s entry in the first ever East Asia summit and believed that India’s entry would result in ‘value addition’ to the bloc as well as the process of integration in Asia, which is poised to become the fulcrum of global economic activity in the coming days.

Before this fourth summit meeting, the Indian prime minister delivered a speech at the ASEAN Business Advisory Council in Malaysia on 12 November 2005, where he said:

India seeks closer economic interaction with ASEAN. We are committed to bringing down tariffs to levels prevalent in ASEAN countries, to dismantle unwanted barriers and to expand global capital flows. We must walk this road together with ASEAN, so that enterprises in our countries find it a mutually beneficial process, not a hurtful one. There may be losers, and there will certainly be gainers, but on the whole, we will obtain a win-win outcome and that should be our ambition to work jointly.⁵⁴

While highlighting India’s current economic strength to the countries of Southeast Asia, Manmohan Singh in the same speech said that

…in the past year and a half, our policies relating to investment, taxation, foreign trade, foreign direct investment, banking, finance and capital markets have evolved to make Indian industry and enterprise more competitive globally. We have launched a massive programme for rural renewal which will upgrade rural infrastructure and incomes and thereby expand the domestic market. New policies are enabling public private partnership in the modernisation of roads system, railways system, ports, airports, power and the entire urban infrastructure.⁵⁵

The Indian prime minister, on the eve of two summits i.e., the fourth India ASEAN summit and the first East Asia summit, spelt out an all-inclusive Indian approach of its Look East Policy, and in the same speech said that the ‘East Asian Community in a natural extension of the ASEAN–India engagement process. The India–ASEAN free trade agreement can become the first step in the process. The limited free trade area is a beginning but we must ensure that it leads to explosive growth—both in trade and investment. The essence of the idea is to build up closer linkages among India and the countries of the ASEAN. This we believe can be done through identifying and drawing upon each other’s strengths. The key to the future is the development of new synergies.’⁵⁶

Finally, the Indian prime minister emphasized in the business summit speech that India was committed to work withASEAN and East Asian countries and to be a constructive economic and trade partner with China, to make the 21st century an Asian Century, which he hoped would lead to the eventual creation of an Asian Economic Community, something like the European Union and NAFTA blocs. Besides this, India being a responsible dialogue partner of ASEAN, was actively playing a very constructive role on the initiatives for the ASEAN Integration (IAI) programme, launched by ASEAN to bridge the intra-ASEAN development gap between the four new entrants, namely, Cambodia, Laos, Myanmar and Vietnam and the other developed six. New Delhi’s active focus on the IAI have been appreciated by ASEAN as a sign of India’s commitment to ASEAN and its processes.

From Look East to Further East

One of the outstanding achievements that India has made during Manmohan Singh’s visit to Kuala Lumpur in December 2005 was its participation at the first East Asian summit. This is no doubt quite an unprecedented event in the history of the Indian foreign policy. The path to this first summit has been paved by events in recent years, especially the ASEAN plus formula. This process has brought together leaders from the 10 ASEAN members with their counterparts from the northeast Asian states of China, Japan and South Korea. Indeed, the ASEAN + 3 process has grown beyond summits to provide a framework for initial Asian cooperation on diverse transnational issues such as finance flows (with the Chiang Mai initiative) and public health. For these 13 states, therefore, the East Asia Summit (EAS) represents a logical next step forward from the ASEAN + 3 process. Yet the EAS is more than a near and next extension of the ASEAN plus. One significant difference is the effort to include other states. The criteria that has been laid down for new members includes acceptance of the Treaty of Amity and Cooperation (TAC), a central agreement on interstate relations among ASEAN states and others that agree to its, in relation to ASEAN. Based on such criteria, the EAS has been expanded beyond the ASEAN + 3 states and the new entrants are India, Australia and New Zealand. Surprisingly, the United States has been excluded altogether from this East Asia summit, and the understanding among the members is of not allowing any non-regional power to get into this group. The formation of the EAS can be termed as the first step for establishing an East Asian community on the lines of the European Economic Community. Though the idea is commendable, there are more differences than similarities between Europe and this region. Hence, this will be only in the domain of speculation at least for the coming few years.

India, being an Asian nation, has participated in the first east Asia summit held at Kuala Lumpur on 14 December 2005. Prime Minister Manmohan Singh, after attending this East Asia summit clearly said that it was important for India to be in a group that had the ‘potential to play a major role in global affairs. Its composition, its evolving agenda and format give it the potential to play a major role in global affairs. India’s presence in this group from its very outset is an opportunity we value.’⁵⁷ The Indian prime minister, finally described this East Asia summit ‘a historic meeting.’ Thus, India’s presence and participation, first in a summit with the ASEAN and then in the first East Asian summit, are no doubt a good beginning to the country’s ultimate integration with that region. In the East Asian summit, economy and trade were the core issues and a historic decision was taken to work towards the world’s largest free trade area, covering some developed and developing economies. In the Kuala Lumpur declaration, the 16 members have committed themselves to promoting ‘development, financial stability, energy security, economic integration and growth’, besides narrowing the development gap through technology transfer. For New Delhi, the EAS can be seen as the penultimate step in its integration with the East, and a stepping stone to joining the Asia Pacific Economic Cooperation (APEC) forum.

Conclusion

Having appraised India’s ASEAN policy from Cold War to post-Cold War years, it is clear that India’s interaction with ASEAN before the fall of the former Soviet Union was built on an idealistic connection of Asian brotherhood based on shared experiences of colonialism and cultural ties. New Delhi’s interaction with ASEAN in the Cold War period can be depicted as a narrative of over-sighted opportunities, as India declined to get confederated with ASEAN despite positive propositions from the latter. The rhythm of the Southeast Asian region today is determined, as much by trade, investment and production as by history and culture, and it was only with the formulation of the Look East policy in the early 1990s, that the Southeast Asian region has received its due importance in India’s policy planning. India’s altered policy towards ASEAN, since the collapse of the erstwhile Soviet Union, has been a result of conscious choice, born out of the changes in the international scenario and domestic environment. This, in turn, has led to a better appreciation of the benefits of integrating foreign and economic policies. Such an approach has naturally made the economically vibrant ASEAN countries more attractive for India, and led to the onset of a new phase of ‘rediscovery and renaissance’ in India’s relationship with the Southeast Asian countries.

India’s new ASEAN policy has grown over more than one and half decades. This new regionalism towards the Southeast Asian countries, popularly called the ‘Look East’ policy, was launched in response to a growing recognition that Asia was emerging as the centre of gravity with rapid speed. In support of this policy, it was argued that India and the ASEAN nations have strong civilizational links in addition to geographic proximity and political and strategic convergence. They have neither any territorial disputes nor any clash of strategic interests and have similar political value systems. The intensification of the economic ties with the ASEAN has quietly led New Delhi into a second phase of its ‘Look East’ policy. Its Phase-I policy was characterized by trade and investment linkages. Phase-II has been marked by arrangements for free trade areas and establishing institutional economic linkages between the countries of the region and India. The Phase-II initiative of New Delhi has a larger geographic scope—from the initial focus on Southeast Asia it now includes East Asia and the South Pacific. It is marked by an expanded definition of the ‘East’, extending from Australia to China and East Asia with the ASEAN as its gist. The recent East Asian summit, held in Kuala Lumpur on 14 December 2005, has been a major accomplishment for her ‘Look East’ policy, which can serve as forward posts for New Delhi’s trade and investment initiatives towards North East Asia and Southwest Pacific. Given ASEAN’s strategic importance in the Asia-Pacific region, India’s present cordiality with ASEAN can be used as a springboard for making it to the Asia-Pacific region, NAFTA and other successful world trade groupings. Comprehending the potential for gains of the Asian Economic Community (AEC), India has actively pursued its relationship with the ASEAN plus three nations by way of involvement in cooperative frameworks both at the sub-regional and bilateral levels. New Delhi’s participation in the East Asian summit could provide another dimension to the efforts at regionalism in Asia, which were hitherto restricted to ASEAN. Thus, India’s ASEAN policy has clearly exhibited three distinct features so far:

1. India has managed to develop a multifaceted relationship;
2. A successful defence diplomacy has been put in place; and
3. Unlike in the past, New Delhi is not averse to participating in regional multilateralism—security or economic.⁵⁸

To sum up, it can be said that India’s policy of new regionalism towards the Southeast Asian countries has ushered in a new wave of understanding and forged a dense network of collaborative ties with the countries of ASEAN and East Asia. In the context of the changing world order, New Delhi is looking more towards the Asia-Pacific region with greater concern and hope. However, this outlook needs to be nursed and sustained patiently over a long period without losing the focus on the core objectives.

Epilogue

It is crucial to note the events unfolding at the fifth India–ASEAN summit held in the Philippines since it further reinforced India’s resolve to strengthen its multilateralism vis-à-vis the ASEAN despite nagging difficulties and persisting differences of perspectives. On 13 January 2007, at Cebu in the Philippines, Prime Minister Manmohan Singh attended the fifth India–ASEAN summit and the second East Asia summit in the backdrop of the maturing ‘Look East’ policy of India initiated more than a decade ago. This summit took place at a time when trade, investment flows, economic cooperation and people-to-people interactions are assuming an intrinsic momentum of their own. India on Sunday, 14 January 2007, urged the 10-member ASEAN to work for the completion of a free trade agreement by July. Prime Minister Manmohan Singh said he was glad that trade ministers from both sides made progress in resolving outstanding issues in the negotiations. ASEAN trade ministers agreed to India’s negative list in earlier meetings in the central Philippine province of Cebu, 585 km south of Manila. Both sides agreed that trade coverage in the negative list should not exceed 5 per cent. Singh said he believes that an India–ASEAN free trade agreement (FTA) would further boost trade between the two sides. ‘India–ASEAN trade recorded an impressive growth of 30 per cent last year,’ he told a meeting with his ASEAN counterparts in Cebu. ‘This leave us in little doubt about our ability to achieve, and even surpass, the target of $30 billion by 2007,’ he was quoted by DPA as saying.⁵⁹

Despite the initial setback over the list of items to be excluded from tariff reduction commitments, Singh said India was ‘strongly committed to its very conclusion and implementation.’ ‘We should direct our trade ministers to expedite the negotiations so that the ITA can be finalized, as agreed, by July 2007,’ he added. ASEAN members, especially Malaysia and Indonesia, have been pushing for India to stake on steeper commitments in liberalizing imports of palm oil, pepper, coffee, tea and rubber from ASEAN. The 10-member group has demanded that India should agree to bring down duties on palm oil to between 30 per cent and 40 per cent within five years of the implementation of the agreement. India’s position calls for the duties to be reduced by 50 per cent within 10 to 12 years. Singh said aside from the FTA, India was looking forward to ‘greater connectivity’ with ASEAN and stressed that science and technology should be a key area of cooperation. He cited a technology summit organized by ASEAN and India in New Delhi last November as an important milestone in the cooperation. ‘It shows that we can pool our knowledge, and together add to it, to create wealth and improve the well-being of our peoples,’ he added.

As a part of aligning India’s economic policies with those of the region, Singh said that ‘we have a policy objective of aligning our duty rates with ASEAN… We would be willing to engage ASEAN authorities in a discussion on open skies policy.’ Pointing to the significance of ASEAN, he said while external trade with East Asian countries accounted for a 30 per cent share, India would surpass the trade target of $30 billion with ASEAN by 2007. ‘I believe that the India–ASEAN FTA will impart even further momentum to this growth in trade. We are strongly committed to its early conclusion and implementation,’ Singh told leaders of the 10-nation grouping. India was for economic integration by entering into free trade or comprehensive economic partnership pacts both with ASEAN as a whole and with individual countries, he said. The Prime Minister said that the ‘web of mutually beneficial partnerships can, we believe, be brought together in a Pan Asian FTA that could light up the future of this region’.⁶⁰ Addressing the India–ASEAN summit, Prime Minister Manmohan Singh said India had examined Singapore’s proposal for an open skies policy, which was aimed at greater connectivity to promote regional economic integration. ‘I am happy to announce that we would be willing to engage ASEAN authorities in a discussion on such a policy,’ he told leaders of the 10-member grouping.