Background

• Launched in 1991
• Why?
  • In the wake of the collapse of Soviet Union India wanted to improve its relations with all major powers of the world
  • India focused on South-East Asia as it was a growing market
  • India wanted to go beyond the confines of SAARC to reap the benefits out of the economic potential of the South East and East Asian region
  • To balance China’s influence in the region
• Initially directed towards the SE Asian nations. But India has now included China, Japan, S.Korea and other Asia Pacific nations in the gamut of this policy
• The policy which began largely as an economic initiative has gained political, military and regional dimensions

Principles of LEP

Outcomes of the policy

Strengthening Cooperation

• India-ASEAN relations have strengthened
• India became ASEAN’s full dialogue partner in 1996
• Became member of ASEAN Regional Forum in 1996
• Since 2002, India has annual summits with ASEAN along with China, Japan and Republic of Korea
• BIMSTEC and Mekong Ganga Cooperation floated by India in 1997 and 2001 respectively
• India is also a founding member of East Asia Summit

Trade and Investment

• ASEAN is presently India’s fourth largest trading partner after EU, USA and China
• FDI data
• Indo-ASEAN bilateral trade data
• India-ASEAN FTA signed in 2009 at Bangkok came into force from January 2010.
  • However, FTA did not include software and information technology
  • FTA is a part of the Framework Agreement on Comprehensive Cooperation signed with ASEAN in 2003

Development Cooperation

• India provides assistance to Cambodia, Laos, Vietnam and Philippines in the form of grants, soft loans, credit lines and training sources for their socio-economic development.
• As a dialogue partner of the Pacific Islands Forum (PIF), India has been engaging with these countries to provide assistance for capacity building
• MILAN naval symposium

Science and Technology

• India has set up a Tsunami Warning Centre to extend information exchange and data sharing arrangements with BIMSTEC countries
• Satellite sharing

Bilateral Ties

• FTA with Thailand and CECA with Indonesia and Singapore
• Enhanced defence ties with Malaysia
• Strong economic ties with China
• Strategic partnership agreements, economic interaction and defence cooperation with Japan
• CEPA with South Korea

Infrastructure Cooperation

• Asian Highway, Asian Railway link being discussed
• Kaladan Multi-modal Transit Transport facility is aimed at establishing connectivity between Indian ports and Sittwe port in Myanmar through riverine transport and road links in Mizoram
• Ganga-Mekong initiative
• Completion of the 160 KM India-Myanmar Friendship road from Tamu to Kalemyo to Kaletwa built by BRO

Education

• Nalanda University

New cooperation area could be

• India’s LEP can be furthered through areas like Education, human resources development, democracy, human rights and culture
• Furthering of trade ties
• Simplification of visa regime
• India-ASEAN health care initiative
• India-ASEAN Green Fund
• An Open Skies Policy
• Cooperation in fighting terrorism and transnational crime
• Tourism has a lot of potential

Look East and North-East

• NE states are land-locked and joined to India by a narrow corridor
• This has been a serious impediment for the development of the region
• North Eastern Region Vision 2020 makes a serious effort for socio-economic development of this region to match with the objectives of the Look East Policy
• Several measures have been undertaken under the aegis of LEP to uplift NE India
  • Asian Highway
  • Asian Railway Link
  • Natural Gas Pipeline
  • Kaladan Multi-modal transit transport facility (to Sittwe port through riverine transport and road links in Mizoram)
  • Ganga Mekong initiative

The China Factor 

• In the cold war era, South East Asian nations perceived China as dangerous because of its military expansionist scheme in Asia.  While now the “peaceful rise”of China is being considered more of an opportunity despite the challenges.
• China is virtually dominating the South East Asian region. The ASEAN-China Free Trade Area created by an accord in 2004 has come into effect from January 2010. This covers nearly 1.9 billion people.  In terms of economic value this is the third largest regional agreement, after only the EU and the NAFTA.
• “A new talking point in East Asia is that of the multi-laterisation or, more precisely, the likely enlargement of the Chiang Mai Initiative (CMI) later this year.  The CMI is basically a currency pool of the ASEAN+3 countries (China, Japan and South Korea).The move was a direct response to the recent outbreak of the US-induced global and financial economic crisis, which has not fully blown away as now” (P.S. Suryanarayana-Frontline January 29, 2010).
• China is predicted to overtake Japan as the world’s second largest economy some time in 2010.
• India must be aware of the fact that it has not been invited to the EAS because of its rising economic potential alone but more as a balancing force to offset the China factor.  Prime Minister Manmohan Singh has repeatedly mentioned that in a global environment, India is not afraid of competition and it can complement rather than compete in the EAS.

Shortcomings of the policy

• India still remains outside the Asia Pacific Economic Cooperation (APEC)
• Though India has entered into a number of pacts with ASEAN countries, the implementation of such accords has been poor. This is because India fears competition from these countries in the agricultural sector
• India lags behind China and Japan in almost all spheres of Pan East Asian Cooperation
• East Asian observers reckon that India has so far appeared less proactive than China on some critical issues
• Some analysts feel that India’s LEP lacks a strategic vision despite seeking defence cooperation with some ASEAN nations and securing a role for joint patrolling in the Malacca Straits

Recent Developments

• India Show 2011 held in Singapore in January 2011.

Conclusion

• India’s LEP objectives can be furthered through areas of comparative advantage such as
  • Education, democracy and culture
  • In this respect, Nalanda project is noteworthy
• India should make use of its lead in IT sector
• Open education centers in East Asia
• Emphasise tourism from ASEAN to India
• India is becoming a stabilizing and balancing force in this region
• The crux is that this Look East policy should reinforce and demonstrate India’s commitment to this region which accounts for about one-third of India’s trade. It should also be made clear that this commitment will not be influenced in any way by the improving relations between India and the US and EU.

ASEAN

• Before 1990 the relations between ASEAN and India were not strong
  • The signing of the Friendship Treaty with the Soviets, India’s stand on Afghanistan and India’s recognition of the Kampucean government led to the estrangement between India and ASEAN
• Focus on strengthened and multi-faceted relationship with ASEAN an outcome of the significant changes in the world’s political and economic scenario since the early 1990s and India’s own march towards economic liberalisation
• India’s search for economic space has resulted in our ‘Look East Policy’
• ASEAN, on its part, seeks access to India’s professional and technical strengths
• 1992: sectoral dialogue partner
• 1996: upgraded to full dialogue partnership
• 1996: India has been an active participant in the ASEAN Regional Forum
• Since 2002, annual summits with ASEAN – along with China, Japan, Republic of Korea
• ASEAN adopted a new charter in 2008

Table 1

Economic Relationship

• 2003: ASEAN-India Framework Agreement on Comprehensive Economic Cooperation.
• Trade amounted to USD 43.90 bn in 2009-10
  • India’s exports: USD 18.11 bn
  • Imports: USD 25.79
• Agreed to work for a target of USD 70 bn by 2012
• CECA signed in 2005. Components are being negotiated
  • Covers FTA in Goods, Services and investment as well as Economic Cooperation in identified areas
• FTA for trade in goods signed in 2009. Came into force in 2010.
  • FTA for TiG has come into force with Malaysia, Singapore, Thailand, Indonesia, Vietnam, Myanmar and Brunei
• The next step is the conclusion of negotiations on Trade in Services and Investment Agreement for which a target date of March 2011 has been agreed

ASEAN-India Cooperation fund: Projects are undertaken through this fund, which is managed by the ASEAN Secretariat in Jakarta. Collaborative R&D & Workshop on Thermally Sprayed Ceramic-based Coatings. Establishment of a Digital S&T Library in ASEAN countries. Human Resource Development in Free and Open Source Software. Establishing VSAT based Tele-Education and Tele-medicine network in CLMV countries Training of ASEAN Diplomats in India Establishment of Centres of English Language Training (CELT) and Enterpreneurship Development Centres (EDC) in CLMV countries

ASEAN Development Fund: An amount of US $1 million was contributed by India to ASEAN Development Fund over a span of three years from 2005-07 to support the Vientianne Action Programme of the ASEAN countries

ASEAN-India S&T fund: A fund with a US$ 1 million contribution from India has been established in India to promote joint collaborative R&D research projects in Science & Technology sectors

India-ASEAN Green Fund: An India-ASEAN Green Fund is proposed to be established with a corpus of US $ 5 million to promote adaptation and mitigation technologies in the area of Climate change in ASEAN countries

Terrorism

ASEAN and India have signed a Joint Declaration on Cooperation to Combat International Terrorism in October 2003 in Bali, and in the same year, India acceded to the Treaty of Amity and Cooperation in Southeast Asia

About 0.34 million tourists come to India from ASEAN. From India, about 2 million go to ASEAN

Pharmaceuticals and Health

during the official level India-ASEAN Working Group (AIWG) Meeting in October, 2008, a concept paper for cooperation in health and pharmaceutical sector was given to the ASEAN side. Similarly, an MOU submitted by Deptt. of AYUSH of India in the field of traditional medicine is also under consideration.

Human Resource Development

Entrepreneurship Development Centres in Cambodia, LAO PDR, Vietnam and Myanmar have been established. Centres for English Language Training (CELT) have been set-up in Cambodia, Laos, Myanmar and Vietnam while one in Indonesia is under process. India has also offered a number of ITEC/ICCR fellowships and training in various sectors.

People to People Contact and Diaspora

The Tourism Ministers of ASEAN and India held their second meeting on 25th January, 2010 and agreed to develop an India-ASEAN Tourism Agreement, Promotional chapter for tourism (APCT) and a familiarization trip from India to ASEAN

the media exchange programme entitled “ASEAN India Media Exchange Programme” was initiated to facilitate greater interaction and cooperation between ASEAN and India

Special Course for Diplomats from ASEAN Countries are conducted regularly at the Foreign Service Institute

Students from ASEAN visit India

Infrastructure

ASEAN Connectivity Initiative: to improve intra-ASEAN connectivity as well as with dialogue partners.

Aviation

Draft Air Services Agreement. Ultimately move towards open skies agreement.

ASEAN Regional Forum

• Setup in 1993 as a regional security cooperation and dialogue platform
• 27 member states
  • 10 ASEAN
  • 10 ASEAN Dialogue Partners
  • 7 other countries: Bangladesh, DPRK, Mongolia, Pakistan, Papua New Guinea, Timor Leste and Sri Lanka
• ARF process is three tiered
  • Track – 1
  • Track – 1.5
  • Track 2
• There exists interaction among defence officials alongside diplomats
• India became ARF member in 1996
• Participation in ARF demonstrates our increasing engagement in the Asia-Pacific region, both in the politico-security and economic
• Underlines our commitment to the objective of sustaining regional peace and stability
• 18^th ARF meeting was held in July 2011 in Bali
• Has organised several seminars, workshops and training programmes for ARF members
• Vision Statement for ARF for 2020 was adopted in 2009
• Hanoi Plan of Action (POA) for implementation of the Vision Statement adopted in 2010
• ARF has three stages
  • Promotion of confidence building
  • Development of preventive diplomacy
  • Elaboration of approaches to conflict

Table 2

Economic Relations

• India already has a FTA with the block
• Trade in services deal has been stuck over the issue of movement of professionals
  • India has been demanding greater opening in the Mode IV category so that more professionals get greater job opportunities in ASEAN
  • The ASEAN member countries have expressed their concern over allowing the movement of professionals and putting in place an easier visa regime

East Asia Summit

• Background
  • Nehru had convened the Asian Relations Conference in 1947 and later argued for the creation of Asian Regional Organisation
  • But the idea failed to materialize
  • In 1990s Mahatir Mohammad proposed the creation of an East Asian Economic Grouping (EAEG)
  • EAEG also failed to take off
• 2005: First in Kuala Lumpur
  • 2010: 5^th meeting in Hanoi
  • 2011: 6^th meeting in Bali (October). US and Russia to join the summit
• 16 countries to East Asia (ASEAN+3+3) + US + Russia
• Significance
  • Represents about 60% of world population
  • X% of world trade
• Dealt with various issues over the years
  • 2007: Disaster management and pandemics and energy security
  • 2008: Global Economic Crisis
  • 2009: Climate Change negotiations
• Helping to bridge gaps between sub-regions and nations in Asia.
• East Asian Community is a proposed trade bloc

Evaluation

• Integral part of the regional architecture and a purposeful vehicle for community building in the region
• Need to move from policy declarations to greater functional cooperation
• EAS has taken India beyond ASEAN and a step closer to APEC

Nalanda University

• Established under the aegis of East Asia Summit as a regional initiative
  • At the EAS summit 2009(?) in Thailand the members issued a joint press statement supporting the establishment of the university
• Nalanda Mentor Group was constituted in 2007 (Chairman: Amartya Sen)
• NMG also has representatives from Singapore, China, Japan and Thailand
• Will have the following schools
  • Buddhist studies, philosophy and comparative religions
  • Historical studies
  • International relations and peace studies
  • BM and DS
  • Language and literature
  • Ecology and Environmental Studies

Mekong-Ganga Cooperation

• This concept was floated by India
• Established in 2000 at Vientiane in the first MGC Ministerial Meeting
• Six members
  • India
  • Thailand
  • Myanmar
  • Cambodia
  • Laos
  • Vietnam
• Four areas of cooperation
  • Tourism
  • Culture
  • Education
  • Transportation
• Has annual ministerial meetings. 4^th meeting was in Sebu, Philippines
• MGC initiative is a vehicle for ‘soft diplomacy’ in countries that have had considerable cultural influence from India.
• Promoting tourism requires connectivity
• MGCI’s intentions concerning transport and communications consists of two aspects
  • Road networks
    • India-Myanmar Tamu-Kalewa road inaugurated in 2001
    • East West Corridor linking Bay of Bengal to South China Sea
  • Rail connectivity
• Paradoxically, the impact of MGCI is seen more in bilateral relations rather than in multilateral initiatives

Bay of Bengal Initiative for Multi Sectoral Technical Cooperation (BIMSTEC) 

• 1997
• Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal

India has taken a leading role in this grouping. The second BIMSTEC Summit was held at New Delhi in November 2008.  India has set up a Tsunami Warning Centre to extend information exchange and data sharing arrangements with BIMSTEC countries. In addition to the 300 scholarships offered under the Indian Technical and Economic cooperation Progamme (ITEC) 150 more offered to BIMSTEC countries (during the summit in Delhi) of which a report indicates that 80% have been utilized.  Negotiations are underway for a BIMSTEC Free Trade Agreement in goods. The last BIMSTEC ministerial meeting held in Myanmar in December 2009 was attended by External Affairs Minister S.M.Krishna, where Climate Change was identified as one more area of cooperation

BIMSTEC FTA Framework is being negotiated

Other

• Indian Ocean Rim Association for Regional Cooperation

Specific Countries

Singapore

• India-Singapore Strategic Dialogue, constituted in 2007, to promote exchanges at a Track-II level

Economy

• Is India’s largest trade and investment partner in ASEAN
• Bilateral trade USD 23 bn in 2010
• CECA signed in 2005
  • Was the first such agreement to be signed by India with any country
  • Integrates agreements on trade in goods and services, investment protection, and economic cooperation in fields like education, intellectual property and S&T
  • Comprehensive Economic Cooperation Agreement implemented and periodically reviewed
• Singapore has emerged as one of the largest source of FDI inflow into India amounting to USD 11.64 bn during the period April 2000 to December 2010
  • This accounts for 9.46% of total FDI inflow to India
• Indian FDI in Singapore for the year 2008 was USD 8.01 bn
• Other major agreements
  • DTAA (1994)
  • Defence Cooperation Agreement (2003)
  • MOU on Foreign Service Consultations (1994)
  • Mutual Legal Assistance Treaty (2005)
• Technology
  • ISRO is set to place Singapore’s first satellite in orbit soon

Culture/People-to-people/Diaspora

• A large number of cultural societies promote Indian classical dance and arts
• Deepawali is regarded as the premier Indian cultural celebration, on par with the Chinese New Year and Malay Hari Raya
• In 2010 India introduced tourist visa-on-arrival for Singapore. (other countries for which this was introduced are Japan, New Zealand, Finland and Luxemburg)

Diaspora

• Ethnic Indians constitute about 2% of the total population of 5.1 million
  • Third largest ethnic group after Chinese and Malays
• Tamil is one of the four official languages of Singapore
• Establishment of Indian education institutions like Global Indian International School, DAV, DPS, SP Jain Centre of Management.
• Politics: Two (of 6) Presidents, 2 (of 4) senior ministers and 2 (of 9) Dy PM have been Indians. SR Nathan, an Indian, has been the longest serving President of Singapore
• Arts: From 1979 to 2006, Indian Singaporeans have won 10, or 11.4% of the 88 cultural medallions conferred, the highest honour to artists given by the Singapore government
• Business: In 2006, Forbes listed four ethnic Indians among the 40 largest private individual and family fortunes in Singapore, which is 10% of the list
• SIMBEX maritime exercise

Singapore is stable and hence we can bank on it

Geostrategic presence

Singapore has invested in ports in India: Pipavav port, Tuticorin port

Table 3

Table 4

India – Laos Relations

In September 2010, President Pratibha Patil visited Laos.

• India to give monetary and technical assistance to Lao PDR
• First tranche of $72.55 mn to be released for two power projects
• Cultural exchange programme has been signed for 2011-13
• ASI assistance in the restoration of the 6^th century temple complex of Vat Phou in the province of Champassak
  • This site was designated as a UNESCO World Heritage Site in 2001

East Asia in general

Nalanda university project can be an important catalyzer in India-East Asia relations. At the East Asia Summit held in 2009 in Hua Hin in Thailand, the leaders endorsed and extended their support for the establishment of Nalanda University.

Through the university, academic and cultural exchange would increase.

India-Malaysia Relations

• 1957: Established diplomatic relations with the Federation of Malaya
• India PM visited Malaysia in October 2010.
  • The text of CECA has been agreed upon. Will be implemented for July 1, 2011.
  • Collaboration in defence sector and infrastructure development.
  • To step up cabinet level exchanges in numerous areas
  • India-Malaysia would liberalize their respective investment regimes to facilitate greater foreign direct investment into each other’s territory.
  • MoU on cooperation in the traditional systems of medicine makes India the second country with which Malaysia has inked such a pact.
  • MoU on Cooperation in the field of Tourism
  • MoU on cooperation in the field of IT & Services
  • Cultural Exchange Programme Agreement between CSIR and UNIK of Malaysia
  • To set up a joint working group on Counter-Terrorism

Economy

• Economic and Commercial relations are emerging as the mainstay of the bilateral relationship
• Malaysia is the second largest trading partner for India within ASEAN
• India is the largest trading partner for Malaysia from among the countries of the South Asia, excluding China
• CECA (likely to be asked)
  • Came into force on July 1, 2011
• India Malaysia CEOs forum launched
• Bilateral trade
  • 2010: USD 8.94 bn
  • India’s exports: USD 2.47 bn
  • India’s imports: USD 6.47 bn
• Expected to cross USD 10 bn in 2011 due to the implementation of CECA
• 21^st largest investor in India
  • Maxis Comm in Aircel, Axiata in IDEA, Khazanah in IDFC
• Malaysian construction companies’ largest presence outside Malaysia is in India
  • They have completed 52 construction projects worth USD 2.34 bn in India
  • Under partnership with Malaysian Airports, GMR completed airport in Hyderabad and Delhi
• India is the 7^th largest investor in Malaysia
  • Reliance, IRCON

Defence

• 1993: MoU on defence cooperation
• Malaysia-Indian Defence Cooperation meetings (MIDCOM) held regularly

Tourism

• India is the sixth largest source country for inbound tourism to Malaysia while Malaysia is the tenth largest for India

Diaspora/Cultural relations

• Malaysian students studying in India and vice versa
• About 150,000 legally recruited Indian workers in Malaysia in both the skilled and semi-skilled category
• Malaysia has one of the largest communities of PIOs in the world, numbering close to 2 million (7.1% of Malaysian population)
  • Overwhelmingly Tamil speaking
  • Malaysian Indian Congress is the dominant political organisation of the PIOs
  • PIOs from Malaysia have been sending the largest contingents to the Pravasi Bhartiya Divas
• Some important Malaysian Indians
  • Tony Fernandes: CEO of Air Asia
  • Ash Nair: Musician
  • Jaclyn Victor: Singer and actress

Problems

• Unfair treatment of non-muslims and non-Malays
  • Islam is the state religion. About 60% of the people are Muslims
  • Lately, Malaysian government’s stance with regard to constraining religious assertion has been against non-Muslims
• Economic condition of many Indians is bad
  • They are not provided the support that is given to the Muslims and Malays by the government

Myanmar

• Is the land bridge for India to connect with ASEAN countries
• Discussed in detail in another note

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