What’s India Up To?

By Jennifer McArdle, Research Intern, Center for Strategic Research

 

In his January 27, 2011, State of the Union address, President Obama cited the United States and India’s developing new partnership following his state visit to India in November, 2010. As an emerging world power, India should be expected to build ‘strategic relationships’ with the ‘P5’ states. India’s pattern of diplomatic state visits in 2009 and 2010 confirm its expanded presence on the international scene and with all of the ‘P5’ states. However, New Delhi’s recent symbolic choice of the Indonesian President Susilo Bambang Yudhoyono and subsequently the South Korean President Lee Myung-bak as the Guest of Honor for the Republic Day Celebrations in 2011 and 2010 would suggest that India’s approach to ‘strategic relationships’ is not exclusively focused on the ‘P 5’. The question is: “What is India really up to in its increasingly active pattern of external relations?”

An analysis of India’s diplomatic, economic, and defense activities over the past few years demonstrates that while increasingly active on the global stage, India’s most intense foreign relations focus remains upon its neighbors in East Asia – continuing a pattern begun two decades ago, the ‘Look East’ policy.

India’s ‘Look East’ policy was first articulated by Prime Minister P.V. Rao in 1991. The collapse of the Soviet Union, India’s largest trading partner, led to an economic crisis that year, and encouraged India’s leaders to take a new and different perspective on the rapidly liberalizing economies of Southeast Asia. Led by economic aspiration and executed with diplomatic outreach, New Delhi pursued new and expanded bilateral and multilateral interactions with the nation-states and the regional organizations across Southeast Asia.  In 1992 India became a sectoral dialogue partner in the Association of Southeast Asian Nations, (ASEAN). By 1995 India’s partnership with ASEAN was upgraded to a full dialogue partner that allowed India to participate in the security-oriented ASEAN Regional Trade forum (ARF) the following year.

With the first ASEAN-India summit held in 2002 and the signing of an ASEAN-India free trade agreement (FTA) in 2009, trade between ASEAN and India reached $39 billion in 2009. According to the Indian Department of Commerce, India’s top 25 bilateral net trading partners consistently include Singapore, Australia, South Korea, Indonesia, Japan, and Malaysia. These states account for 16% of India’s bought and 8% of its sold firms, mergers and acquisitions. Comparatively, the UK accounts for 16% and 5% of bought and sold firms, mergers and acquisitions respectively.

India has also sought to increase trade through various other incentives such as the Mekong-Ganga Cooperation (MGC) and the Bay of Bengal Initiative for Muti-Sector and Economic Cooperation (BIMSTEC). As India continues to delve deeper into a ‘second phase’ of the ‘Look East’ policy, New Delhi will have to continue strengthening its bilateral ties with Asian states. India has been able to secure FTAs with the Philippines, Sri Lanka, and South Korea. It also continues dynamic FTA negotiations with Thailand, New Zealand, Malaysia, and Japan. In 2004 India began to look beyond ASEAN, aggressively pursuing additional East Asian regional trade agreements (RTAs). India’s RTA efforts include the East Asian Summit (EAS), Bangkok Agreement, JACIK, and the Asian Cooperation Dialogue (ACD).

Concurrently, India has used diplomat visitation as a means to secure ‘strategic relationships’ with East Asian states. According to the MEA’s Annual Report, in the last three years alone high level visits, both civilian and military, between India and 6 Asian states (Japan, Australia, Malaysia, Indonesia, Singapore, and Vietnam) have been among the top 25 states, rivaling visit patterns between India and the ‘P5’ states.

India’s unique position astride the India Ocean has created incentives for New Delhi to build strategic bilateral defense relationships in order to protect trade and foster maritime security with its East Asia partners. With about fifty percent of the world’s trade running through the straits of Malacca and India’s geospatial interests running from the Arabian Sea to the South China Sea, New Delhi has recently engaged in defense relationships and joint naval exercises with Singapore, Malaysia, Thailand, Indonesia, the Philippines, Vietnam, Japan, Australia, Sri Lanka and South Korea. Some have argued that this strategy of maritime expansion is in response to China’s so called ‘string of pearls’ strategy. Whether the ‘string of pearls’ theory is an accurate representation of China’s goals in the region is debatable, however it is clear that China does have strong and growing interests in the Indian Ocean. As a result India has pursued a strategy of ‘congagement’ with the Chinese state– pursuing security ties with East Asian states while also maintaining robust economic ties to China.

India’s ‘Look East’ policy began with a need to take into account the evolving post-Cold War economic order.   This economic imperative continues to evolve in bilateral and multilateral arrangements.  It has also seen India taking an increasingly proactive diplomatic and security posture across East Asia. India’s continued interest in East Asia will cause its strategic vision in the area to evolve and grow. Thus, India’s growing activity with the ‘P5’ should be seen as a complement to, not a substitute for, its continuing, two-decade old ‘Look East’ policy.

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