India has embarked on a period of radical changes in its foreign and economic policies. People argue about whether these changes have gone too far or not far enough. But, the changes in the international affairs have been perhaps less dramatic but in numerous cases little less sweeping. The causes are also been similar. Alongside AEP, countries are also influenced by China’s BRI. In today’s multi-polar world, countries have to be imaginative in building new constituencies and seeking new partnership.
Under the AEP, the India-Japan strategic partnership has been lifted to an entirely new level, underscoring the importance of Indo- Pacific cooperation. India believes in an Indo-Pacific that is free, open and inclusive, and one that is founded upon a cooperative and collaborative rules-based order. ASEAN’s centrality remains the abiding contemporary characteristic of the Indo-Pacific at the regional level. India has placed the ‘Indo-Pacific’ at the heart of its engagement with the countries of South, Southeast and East Asia. In 2018, in his keynote address at the Shangri-La Dialogue in Singapore, Indian Prime Minister had espoused a “free, open, prosperous and inclusive Indo-Pacific Region”. He had, in addition, called for common commitment, based on shared values and principles, to promote a rules-based order in the Indo-Pacific. Gradually, Act ‘East’ is getting transformed into Act ‘Indo-Pacific’.
Agenda for the new government
First and foremost, complete the tasks as promised in the Delhi Declaration 2018. Three sets of tasks are worth mentioning: first, complete and scale up the digital connectivity projects in Cambodia, Lao PDR, Myanmar and Vietnam; second, complete the Trilateral Highway (TH), resume the replacement of 69 bridges along the TH and negotiate the Trilateral Motor Vehicle Agreement (MVA); and third, continue with the high impact projects such as fellowships for integrated Ph.D. programmes to ASEAN scholars; set up a network of universities to encourage greater inter-university exchanges between ASEAN and India; celebrate the year 2019 as ASEAN–India year of tourism; resume the work of the Project Development Fund (PDF), among others.
Second, under the Prime Minister’s Sabka Sath, Sabka Vikas, Sabka Vishwas (together with all, development for all, the trust of all), we must empower our states in AEP, particularly Eastern and Northeastern states. Many of the states have taken Act East move but progress has been limited. To guide the states in implementing the AEP, we need a special package. Perhaps, setting up of a Northeast branch of NITI Aayog or RIS would help in bridging the gaps between Centre and States while implementing the Act East. The Act East through the North East can flourish if the central and state governments work towards improving the connectivity in the region, particularly at the border areas.
Third, focus BIMSTEC. BIMSTEC is the natural connector of South and Southeast Asia. Complete the commitments taken at the fourth BIMSTEC Summit which was held at Kathmandu in 2018. While BIMSTEC connectivity master plan is ready, countries must enhance the negotiation process to conclude BIMSTEC MVA, BIMSTEC coastal shipping agreement, and BIMSTEC TFA. In parallel, inject capital and resources, as promised, towards strengthening the BIMSTEC Secretariat in Dhaka. Alongside, we must continue with our activities for BCIM-EC.
Fourth, SMEs drive the business—within and across borders. In the earlier period, there was limited effort to engage SMEs in India–ASEAN activities. This time we expect special focus should be given to SMEs, which can build effective business networks across borders. Some of the projects such as the ASEAN–India SMEs Forum, special fund, etc., would fillip to trade and investment as well as integrating our producers and manufacturers in regional value chains. Many new industries in Northeast and East India are unaware of the potential of the ASEAN market, both for finished as well as intermediate goods and services. SMEs in Northeast India would prefer access to packaging technology or cold chain facilities.
Fifth, development cooperation projects earmarked for the Act East should be put in fast-track by avoiding cumbersome documentation and bureaucratic procedures. Let EXIM Bank of India opens branches in all South, Southeast and East Asian countries and Pacific and also strengthens the resources of their existing outfits. Building an effective network of export credit guarantee agencies between India and Southeast and East Asian countries would improve the utilization of LOCs as well as trade.
Sixth, AEP mandates cooperation and synergy among multiple stakeholders. Funding on just-in-time is needed to activate the AEP. The Ministry of External Affairs (MEA) depends on the Ministry of Finance (MoF) for funding, whereas the MoF depends on the Prime Minister’s Office (PMO) for political and statutory directions. The bureaucratic process often acts as hurdles, delaying the projects or funding. Therefore, greater coordination between Prime Minister’s Office, Ministry of Finance, and Ministry of External Affairs is essential in implementing the Act East projects. Eastern and Northeastern states may consider appointing one Act East Office at the rank of Additional Secretary to drive the AEP and coordinate with the union government.
Seventh, low-hanging fruits. Indian states are rich in culture. Tourism is the most immediate ‘money-making’ opportunity, which has the potential to improve the connectivity between India and Southeast Asia. Air connectivity between Northeast India and Southeast Asia is immediately needed to unlock opportunities. Ministry of Civil Aviation should walk an extra mile to start international flights from Imphal and Guwahati and also upgrade the domestic airports into international airports in Northeast and other parts of India. Let’s celebrate the ASEAN–India Tourism Year 2019 with the opening of the international flights from Imphal and Guwahati. This will also promote health tourism in the Northeast. Imphal’s Shija Hospital has become a favourite destination of Myanmar people for health check-ups.
Eighth, expand the outreach. We must add Bangladesh and Sri Lanka in our AEP. A prosperous Bangladesh offers opportunities for India’s Eastern and Northeastern states. MEA may consider hosting an annual dialogue on AEP involving neighbouring countries and Indian states. At the same time, we shall activate the India-Japan Act East Forum and mobilise resources to bring foreign investors in North East.
Ninth, institutions and governance in institutions matter for AEP. No new institution is suggested, but whatever the country has promised earlier through international declaration or the speeches of Prime Minister, we must implement it. Commitments like setting up of ASEAN–India Centre (AIC) or ASEAN Studies Centre (ASC) in Northeast India or opening up of foreign consulates113 in Northeast India are yet to be fulfilled. These should be taken up. Appoint one AEP Fellow in India’s missions in Southeast and East Asia whose role would be to conduct new policy research, and design projects and implementable strategies.
Tenth, strengthen border infrastructure, logistics and last-mile connectivity. Let major border posts operate 24×7. Complete the construction of ICP projects and equip the ICPs with high-speed Internet, food testing laboratories, warehousing including cold chains, security, banking facilities, skilled human resources, etc. Developed border infrastructure reinforces country’s security. Some of the border posts (e.g. Moreh in Manipur) were not properly developed due to border disputes or lack of availability of adequate land, resulting in a rampant rise of informal trade. Increasing duty structure is not the correct way to stop informal trade when the border is open and porous. An innovative solution is needed to stop illegal trade at the border, particularly at Moreh in Manipur. Building smart cities in Dawki (Meghalaya) and Moreh will enhance economic activities in the region. Greater involvement of youth through training and capacity building will bring trust and confidence among local communities.
Eleventh, faster cross-border economic engagements, particularly in the North East, will wipe out the insurgency, which is the main constraint for expansion of trade and investment. States must encourage the start-ups which are exporting processed food, organic fruits and vegetables, flowers, high-end fashion products through borders. New industrial incentives for construction of plant and machinery, lowering the GST rates of Northeast products and services, setting up technology development and incubation centres, trade financing and banking facilities will not only promote fresh investments but also generate employment.
Twelfth, multiple entry visa should be initiated for investors and traders coming from Southeast and East Asia. While the airports accept e-visa, the same is not allowed at the border posts. The Ministry of Home Affairs (MHA) shall allow e-visa at least at the Moreh border post to start with.
Time is ripe for India to establish a strong economic partnership with Southeast and East Asia and other Indo-Pacific countries. While this will reinforce India’s Act East, it would also gradually remove economic isolation of India’s East and North East. It must not be forgotten, however, that nothing much will work without institutional foundations, a set of rules, and finally, the confidence of countries and states in the whole system.
This excerpt from Act East to Act Indo-Pacific by Prabir De has been published with permission from KW Publishers.