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Time for Modi govt to mean business with BIMSTEC. Regional cooperation can’t wait for Pakistan

India’s economic defensiveness isn’t surprising given that its focus on connectivity is driven by the objective to respond to China’s Belt and Road.

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BIMSTEC is back in the news, and for good reasons. In keeping with his focus on the Neighbourhood First, Prime Minster Narendra Modi invited leaders from the six neighbouring countries that form the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation for his swearing-in ceremony Thursday.

Cynics will see the move to exclude Pakistan as petty, BIMSTEC being little more than a convenient club to keep its Prime Minister Imran Khan out. Optimists will emphasise Modi’s jugaad, willing to experiment beyond SAARC (South Asian Association for Regional Cooperation) as an article of faith and reward the other like-minded neighbours that are truly committed to regional cooperation.

As always, the truth lies somewhere in the middle. First, one must recall how BIMSTEC became an Indian priority, in the first place, after Pakistan blocked Indian connectivity initiatives within SAARC. Far from whimsical, Delhi’s 2016 decision to put SAARC on hold, and its pressure on other neighbours not to attend the planned summit in Islamabad, was thus forced by Pakistani obstructionism.

After Islamabad hindered agreements on a regional satellite, a motor vehicle agreement, and transit rights to Afghanistan, India decided that it was time to move on. This was not out of the blue: at the 2014 SAARC summit, Modi had laid out his vision for “seamless connectivity”, and warned that regional bonds would grow inevitably, whether “through SAARC or outside it” or “among us all or some of us.” Pakistan of course, had by then already practically opted out of SAARC, having put all its connectivity chips on the China-Pakistan Economic Corridor (CPEC).

Also read: ‘India’s politics won’t allow it’: Pakistan on no invite for PM Imran to Modi swearing-in

Second, while BIMSTEC is frequently portrayed as SAARC’s nemesis, both organizations are actually complementary and part of the many tracks in India’s connectivity strategy. The particular focus on BIMSTEC reflects a wider experimentation with multiple Indian initiatives to regain the neighbourhood. At the bilateral level, this included the first proper visit by an Indian prime minister to Nepal and Sri Lanka since the late 1990s and 1970s, respectively. New Delhi has also flexibly embraced sub-regional cooperation mechanisms such as the Bangladesh-Bhutan-India-Nepal (BBIN) group.

Beyond the geostrategic hype about India winning or losing the neighbourhood every time there is a regime change in Nepal, Sri Lanka or the Maldives, New Delhi has been silently scoring several victories on the connectivity game towards the East. Besides the land boundary and shipping agreements with Bangladesh, India became the first BIMSTEC member to join the TIR convention, which facilitates exports. Following Union home minister Rajnath Singh’s focus on facilitating cross-border trade, India now has six operational Integrated Check Posts (ICPs) against just two in 2014, with thirteen more planned with BIMSTEC neighbours Bhutan, Nepal and Bangladesh.

BIMSTEC reflects the cooperative, multilateral and eastern dimension of India’s new connectivity strategy. All of BIMSTEC’s seven member states are committed to reconnecting the Bay of Bengal as a strategic imperative, whether to increase exports or to balance China. Myanmar and Thailand’s membership give the organisation a distinct advantage over SAARC, bridging the gap between the South and Southeast Asia. If Malaysia and Indonesia were to join, BIMSTEC would emerge as the organisational cornerstone of the Indo-Pacific, connecting Kathmandu to Kuala Lumpur and Sri Lanka to Sumatra.

Also read: By heading to Maldives, PM Modi is sending right signal but India needs more than signalling

Delhi’s focus on BIMSTEC has translated into a few practical achievements. In 2016, Prime Minister Modi hosted an unprecedented outreach summit between BRICS and BIMSTEC leaders, in Goa. After two years of embarrassing delays, the Ministry of External Affairs finally deputed its director to the BIMSTEC Secretariat, in Dhaka, and also increased its budgetary allocation to strengthen the organisation. The fourth summit was finally held last year, in Kathmandu, and at Indian insistence its declaration prioritised organisational reform and empowerment.

Nine months have passed since then, but most promises have still not seen the light of day. The renewed focus on BIMSTEC at Modi’s inauguration is thus a welcome move, but needs to be matched with up with concrete measures. One fundamental task would be for India to prioritise a BIMSTEC free trade agreement, which is being negotiated for fifteen years. Beyond all progress on the infrastructural front, regional connectivity will only materialise if and when India fully embraces economic openness. Thailand has been the most vocal about this within BIMSTEC, and even Sri Lanka and Bangladesh have abandoned most of the protectionist measures that India is still clinging on to.

India’s economic defensiveness is not surprising given that its focus on connectivity is mainly reactionary, driven by a geostrategic objective to respond to China’s Belt and Road Initiative in the neighbourhood. This is also betrayed in Delhi’s enthusiastic focus of defence and security cooperation within BIMSTEC, which proved disastrous last year when Nepal opted out of a military drill hosted by India, fearing that it would send a wrong signal to Beijing.

Also read: A Modi-Imran Khan handshake in Bishkek means that the two PMs need each other

It is high time for India to refocus on BIMSTEC as business first and Prime Minister Modi will face difficult choices if he is serious about integrating the Bay of Bengal region. He will have to explain to Indian consumers how they will benefit from trade liberalisation and openness to the more advanced economies of Southeast Asia. Even more challenging will be to convince or compel those who will lose out from competition from Bangladeshi textiles or Thai electronics.

Whether it is the European Union or Association of Southeast Asian Nations (ASEAN), all successful regional organisations have been built around the founding principle of industrial or commercial integration. Re-positioning BIMSTEC as an economic platform will be a tough sell for Modi at home, but there are no protectionist or security shortcuts in India’s uphill task to reconnect the Bay of Bengal region.

The author is Fellow in Foreign Policy, Brookings India. Views are personal.

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