India’s Relations with Neighboring South and South East Asian Countries: Perspectives on Look East to Act East Policy (Dynamics of Asian Development) 9819946093, 9789819946099

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Dynamics of Asian Development

Lipi Ghosh Anasua Basu Ray Chaudhury   Editors

India’s Relations with Neighboring South and South East Asian Countries Perspectives on Look East to Act East Policy

Dynamics of Asian Development Series Editors Anthony P. D’Costa, College of Business, The University of Alabama, Huntsville, AL, USA Rajah Rasiah, Asia-Europe Institute, University of Malaya, Kuala Lumpur, Malaysia Editorial Board Tony Addison, UNU-WIDER, Helsinki, Finland Amiya Bagchi, Institute of Development Studies Kolkata, Kolkata, India Amrita Chhachhi, Institute of Social Studies (ISS), Erasmus University Rotterdam, Rotterdam, The Netherlands Akira Goto, National Graduate Institute for Policy Studies (GRIPS), Tokyo, Japan Barbara Harriss-White, Oxford University, Oxford, UK Keun Lee, Department of Economics, Seoul National University, Seoul, Korea (Republic of) R. Nagaraj, Indira Gandhi Institute of Development Research, Mumbai, India Rene E. Ofreneo, Center for Labor Justice, University of Philippines, Quezon, Philippines Ma Rong, Peking University, Beijing, China Ashwani Saith, Institute of Social Studies (ISS), Erasmus University Rotterdam, Rotterdam, The Netherlands Gita Sen, Indian Institute of Management, Bangalore, India Andrew Walter, University of Melbourne, Melbourne, Australia Christine Wong, University of Melbourne, Melbourne, Australia Achin Chakraborty, Institute of Development Studies Kolkata, Kolkata, West Bengal, India

The series situates contemporary development processes and outcomes in Asia in a global context. State intervention as well as neoliberal policies have created unusual economic and social development opportunities. There are also serious setbacks for marginalized communities, workers, the environment, and social justice. The rise of China, India, and new dynamism of South Korea, Indonesia, and Vietnam in East and South East Asia have given a new meaning to Asian development dynamics. Japan’s energetic ties with India and Vietnam, Korea joining the OECD’s Development Assistance Committee, and China and India’s investments and foreign aid in Africa and Latin America are some of the new processes of development whose impact transcends the vast Asian region. Globalization compounds uneven development, affecting macroeconomic stability, internal and international migration, class and caste dynamics, gender relations, regional parity, education and health, agriculture and rural employment, informal sector, innovation possibilities, and equity. Thus the series views development studies as an unfinished agenda of economic, social, political, cultural interactions, and possible transformations in a fluid policy and global contexts. The editor, with the assistance of a distinguished group of development scholars from Asia and elsewhere specializing in a variety of disciplinary and thematic areas, welcomes proposals that critically assess the above-mentioned wide-ranging developing issues facing Asian societies. With Asia’s contemporary transformation, the series promotes the understanding of Asia’s influence on the prospects of development elsewhere. The editor encourages interdisciplinary, heterodox approaches within the social sciences, and comparative work with solid theoretically informed empirical research. Critical development policy debates in Asia and regional governance issues that have a bearing on development outcomes are also sought.

Lipi Ghosh · Anasua Basu Ray Chaudhury Editors

India’s Relations with Neighboring South and South East Asian Countries Perspectives on Look East to Act East Policy

Editors Lipi Ghosh Sona Devi University Ghatshila, Jharkhand, India

Anasua Basu Ray Chaudhury Observer Research Foundation Kolkata, West Bengal, India

ISSN 2198-9923 ISSN 2198-9931 (electronic) Dynamics of Asian Development ISBN 978-981-99-4609-9 ISBN 978-981-99-4610-5 (eBook) https://doi.org/10.1007/978-981-99-4610-5 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore Paper in this product is recyclable.

Preface

This book is an offshoot of the 10th Biennial International Conference on From Look East to Act East: Challenges and Opportunities in Contemporary India-South East Asia Relations, jointly organized by the Indian Association for Asian and Pacific Studies, Department of South and South East Asian Studies, University of Calcutta, Kolkata, India, and Asia Centre, Bangkok, Thailand. The conference was held on 30– 31 October 2020 virtually due to the outbreak of COVID-19 pandemic. A special panel discussion on “India’s Act East Policy and Neighbouring Powers” held on the second day of the conference had been the main catalyst behind this initiative to produce an edited volume. The two-hour-long panel discussion with all thought-provoking deliberations coupled with the vibrant discussion had inspired us to conceptualize this book project. We are grateful to all our panellists for kindly agreeing to contribute to this volume. While conceptualizing this project, we felt it necessary to include a few more chapters keeping the relevance of the theme of the book. We are indeed thankful to all these contributors who were not in the panel discussion at the conference. We are very happy to have them on board. We take this opportunity to thank Samaresh Guchhait without whose technical support this project would not have been successful. We acknowledge our debt to Rita Banerjee and Prarthana Sen for their painstaking effort in editorial assistance. This volume is a tribute to Prof. Jayanta Kumar Ray, a legendary scholar, a National Research Professor, at the Ministry of Human Resource Development, Government of India, Former Centenary Professor of International Relations, Department of History, University of Calcutta. Professor Ray played a pivotal role to develop South East Asian Studies at the University of Calcutta, and he was the founder of the Centre for South and South East Asian Studies at the same University, which later developed as a full-fledged department with teaching curriculums and research activities. He inspired the faculty members of the department to learn Burmese and Thai languages and introduced language courses, the first of its kind in India. Initially, we decided to make this volume to felicitate Prof. Ray for his scholarship in India-South East Asia relations. Unfortunately, he passed away before this volume took its final shape. Needless to say, that his sudden demise has shocked us and it remains like an irreparable loss. We take this opportunity to dedicate this volume to v

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Preface

our respected Professor who is still considered as a pioneer scholar in understanding South East Asian nations. Kolkata, India 2023

Lipi Ghosh Anasua Basu Ray Chaudhury

Contents

1

Connecting Neighbours Through Ages: India’s Relations with South and South East Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lipi Ghosh and Anasua Basu Ray Chaudhury

2

India and South East Asian Relations: The Past Profile . . . . . . . . . . . Lipi Ghosh

3

The “Look East Policy” of Bangladesh: An Opportunity for Building Complementary and Shared Development for Eastern South Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ashish Banik

4

Manifesting the South East Asian Dream: Understanding the Bhutanese Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sohini Nayak

1 21

33

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5

Nepal’s Drive for Multimodal Connectivity . . . . . . . . . . . . . . . . . . . . . . Purushottam Ojha

6

BIMSTEC and India’s “Act East” Policy: Implications for Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chulanee Attanayake

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India’s Act East Policy and Neighbouring Powers: India-Myanmar Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thinn Thinn Latt

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7

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8

India’s Act East-Thailand’s Go West in the New World Order . . . . . Piti Srisangnam

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9

India-Malaysia Relations: Strategic Engagement in the Context of the Act East Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 Mala Rajo Sathian and Geetha Govindasamy

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Contents

10 Singapore-India Relations: An Enduring Convergence of Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 Sinderpal Singh 11 Education and Knowledge-Based Economy in India in the Last Two Decades and Some Suggestions to Vietnam . . . . . . . . 127 Do Thu Ha 12 India and Indonesia in the Indo-Pacific: Time for a Greater Push . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 Premesha Saha 13 India’s Act East Policy: China’s Perceptions and Responses . . . . . . . 155 B. R. Deepak 14 Strengthening Maritime Connectivity Across the Bay of Bengal: India and Her Eastern and Southeastern Neighbours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 Anasua Basu Ray Chaudhury 15 Regional Integration in the Bay of Bengal Region in Post-COVID-19 Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 Prabir De

Editors and Contributors

About the Editors Lipi Ghosh is a Retired Centenary Professor of International Relations, University of Calcutta. She is currently Former Vice Chancellor of Sona Devi University, Ghatsila, Jharkhand. Her area of specialisation is India’s relations with South East Asia. She also deals with ethnicity, minority and cultural studies in South and South East Asia. She was Nehru-Fulbright APE Fellow (2014–2015), visiting professor MSH, Paris (1986, 1998, 1999, 2004, 2006, 2008, 2012), CWIT Fellow to SOAS, London (1999, 2004) Asia Fellow in Chulalongkorn University, Bangkok, (2000) SEAP, Cornell University, (2002) University of British Columbia University (2005) and ISEAS, Singapore (2010). She has 18 books to her credit. Anasua Basu Ray Chaudhury is Senior Fellow with the Observer Research Foundation’s Neighbourhood Initiative. She specialises in South Asia, energy politics, forced migration and women in conflict zones. She was a Recipient of the Public Service Broadcasting Trust Senior Media Fellowship (2007), and the Kodikara Award from the Regional Centre for Strategic Studies (RCSS), Colombo (1998–1999). Dr. Basu Ray Chaudhury was ICSSR Post Doctoral Fellow (2004–2006) at the Centre for the Studies of Developing Societies (CSDS), Delhi, and was also Visiting Fellow at the Maison des Sciences de I’Homme, Paris (2012). She has nine books to her credit.

Contributors Chulanee Attanayake School of Social Sciences, Media, Film and Education, Swinburne University of Technology, Melbourne, Australia Ashish Banik Bangladesh Enterprise Institute, Dhaka, Bangladesh

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Editors and Contributors

Anasua Basu Ray Chaudhury Observer Research Foundation, Kolkata, India Prabir De Research and Information System for Developing Countries (RIS), New Delhi, India B. R. Deepak Centre for Chinese and South East Asian Studies, Jawaharlal Nehru University, New Delhi, India Lipi Ghosh Former Vice Chancellor, Sona Devi University, Ghatshila, Jharkhand, India Geetha Govindasamy Department of East Asian Studies, Universiti Malaya, Kuala Lumpur, Malaysia Do Thu Ha Department of Indian Studies, Faculty of Oriental Studies, Vietnam National University, Hanoi, Vietnam Thinn Thinn Latt Former Associate Professor, Department of International Relations, Dagon University, Yangon, Myanmar Sohini Nayak Department of International Relations, Jadavpur University, Kolkata, India Purushottam Ojha Trade, Transit, Investment and Private Sector Development, Government of Nepal, Kathmandu, Nepal Mala Rajo Sathian Department of South East Asian Studies, Universiti Malaya, Kuala Lumpur, Malaysia Premesha Saha Strategic Studies Programme, Observer Research Foundation, New Delhi, India Sinderpal Singh South Asia Programme, S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore, Singapore Piti Srisangnam Faculty of Economics, Chulalongkorn University, Bangkok, Thailand

List of Figures

Fig. 11.1 Fig. 15.1 Fig. 15.2

Top 5 diaspora countries. Source MEA . . . . . . . . . . . . . . . . . . . . . Trends in intraregional trade in BIMSTEC. Source Calculated based on DOTS, IMF . . . . . . . . . . . . . . . . . . . . . . . . . . Trade forecast based on gravity model. India’s exports to and imports from BIMSTEC for 2025. Note The forecast for the year 2025 is based on the IMF forecasted GDP growth rate. For the year 2025, we assume the growth rate of GDP for India would be at 7%, and for other BIMSTEC countries, it would vary between 4 and 6% based on average of last five years of GDP. Data for 2010, 2019, 2020, 2021 and 2022 are actual exports. Source Author’s own . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

135 189

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List of Tables

Table 5.1

Table 5.2 Table 8.1 Table 11.1 Table 11.2 Table 11.3

Table 11.4

Table 11.5 Table 11.6 Table 11.7 Table 11.8 Table 14.1 Table 14.2 Table 14.3 Table 15.1 Table 15.2 Table 15.3 Table 15.4

Nepal’s trade with ASEAN countries (NRs. Million) Source: Department of Customs, GON: www.customs.gov.np . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nepal’s trade with neighbouring countries . . . . . . . . . . . . . . . . . Trade dimensions covered by RCEP . . . . . . . . . . . . . . . . . . . . . . India’s GDP growth rate from 1990 to 2014 . . . . . . . . . . . . . . . . India: central government expenditure on education 2014–2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Indian diaspora population and total immigrant population from 1960 to 2016 in the United States (unit: people, %) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annual number of students studying abroad in India compared to other countries (higher education) unit: Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Number of foreign students studying in India . . . . . . . . . . . . . . Ten Indian universities have the biggest number of foreign students 2011–2012 . . . . . . . . . . . . . . . . . . . . . . . . . . Top five investors in Vietnam (As of November 20, 2020) . . . . Outbound number of Vietnamese students studying abroad in 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Planned projects to develop deeper water ports on the Bay of Bengal and the Andaman Sea . . . . . . . . . . . . . . . . . . . . . . . . . Planned projects in the segment of Inland waterways in BIMSTEC region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Planned flagship projects under coastal shipping segment . . . . GDP growth of BIMSTEC countries . . . . . . . . . . . . . . . . . . . . . Regional economic loss of Bay of Bengal region, 2020–2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Intra-BIMSTEC Trade Matrix, 2019 . . . . . . . . . . . . . . . . . . . . . . Trade forecast based on gravity model . . . . . . . . . . . . . . . . . . . .

63 63 97 130 133

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136 139 140 140 142 174 176 177 187 188 190 191

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Chapter 1

Connecting Neighbours Through Ages: India’s Relations with South and South East Asia Lipi Ghosh and Anasua Basu Ray Chaudhury

Historical Legacies Connectivity is a computer buzzword that refers to a programme or device’s ability to link with other programmes and devices. To us, it is a structure within a society that connects people across the globe encompassing political, economic, social or cultural domains. In other words, the concept of connectivity is multidimensional in its nature, which includes people-to-people linkages. Inter-Asian linkages and connections are fascinating subjects for modern-day research. In fact, in today’s world, the notion of Asianism and globalization are intertwined with each other. Against this backdrop, India’s relations with her neighbouring countries are an important topic of discussion. Two major lines of India’s geographical connections with South East Asia are maritime and overland geographical connectivities. German geologist Baron Ferdinand von Richth often called the later trade and communication network as Dic Seidetostrme (the silk route). Present imaginings of the route evoke long-forgotten memories of spectacular urban centres where trade was carried out, fascinating landscapes and people who perhaps spoke differently and lived in ways unknown to the modern world. Most of these routes ran from east to west but sometimes also took the north–south direction. Along with carrying merchandise, these roads also established important linkages. Perhaps, it was through these roads that not just cotton but also Buddhism travelled from India to China. These routes persisted through the Middle Ages; however, they were slowly abandoned in the later Middle Ages. It is fascinating to note the cultural linkages that have manifested along the Southern Silk L. Ghosh (B) Sona Devi University, Ghatshila, Jharkhand, India e-mail: [email protected] A. Basu Ray Chaudhury Observer Research Foundation, Kolkata, India e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 L. Ghosh and A. B. R. Chaudhury (eds.), India’s Relations with Neighboring South and South East Asian Countries, Dynamics of Asian Development, https://doi.org/10.1007/978-981-99-4610-5_1

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Road. This was an ancient and relatively unknown trade route that is considered as part of the larger silk route system that linked southwestern Chinese provinces of Sichuan and Yunnan to eastern India. Cross-cultural interactions took place along the route. The southern silk route has received less attention than the land route that went through the mountainous terrain of the Himalayas or the sea route; however, the presence of a route through the eastern India-Upper Myanmar-Yunnan that was used for trade and migration is a well-documented fact. Similarly, in recent years, Asian waters also promise to be a new geostrategic medium of international relations. During the past few decades, Asia abruptly turned to the seas. Noted historian, Paul Keneddy, calls this a “remarkable global disjuncture” involving “massive differences in the assumptions of European nations and Asian nations about the significance of sea power, today and into the future”. Major historical events in Asia have originated with the sea as its focus, and some of the most dynamic and powerful economies on the globe are aligned to the Indian Ocean. Asia’s maritime preoccupation is not passing phenomenon. The geographic, historical and military imperatives are simply too compelling, and, seen that way, maritime affairs form an intensely multidisciplinary subject spanning political science, military strategy, economics, history and culture, etc. Many issues of commercial and cultural linkages manifest along the Bay of Bengal or the Eastern Indian Ocean, and ancient important trade routes kept on linking India with South East Asia. The Indian Ocean in the past has played a multidimensional role to shape contemporary contexts of the sea. India has a long maritime history of connectivity with South East Asia. Archaeological findings prove that relation between India and her neighbouring South East Asian countries dates back to prehistoric times. The earliest literary reference, which can be considered as a source of information for South East Asia, occurs in the Ramayana ( fourth cando). The catalyst of this interaction was no doubt the mercantile community. The fertile soil and mineral wealth of South East Asia attracted them. Gradually, the merchants began to be accompanied by Brahmin and Buddhist missionaries and also by Kshatriya fortune-hunter princes. Renowned anthropologist William Graham Sumner was of the opinion that culture is transmitted as well as shared. This process of transmission was evident in the case of Siam (present Thailand) especially. While it is still not clear from which part of India that Indian influence came to South East Asia, by the third and fourth centuries, there was a clear Indian influence in every field of maritime as well as mainland South East Asian society. India’s interaction with South East Asia encompasses within its scope the many facets of the shared India-South East Asian culture: Buddhism, Brahmanical divinities, votive tablets, mandapas, dress styles music, Buddhist cult, Ganesha Puja, religions, language, festivals, music, textile, food, etc., which acted as agents of India’s cultural interaction and cultural ties with South East Asia. Beginning in the early sixteenth century, European traders—the Dutch, the Portuguese, the French and others—entered the Indian Ocean trade. Following the commercial enterprises, the era of European colonization began from the sixteenth century and continued up to the nineteenth century. During the colonial era, the most important fact was the migration of Indians to South East Asia as agents of

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British colonial power. This added to the labour migration from India to countries like Myanmar, Malaysia, Singapore and others. Indian revolutionaries also established centres in Burma, Thailand and Singapore. Many movements in South East Asia were also inspired by Indian models. There were many intellectual connectedness beginning from Tagore till the time of Subhas Chandra Bose. In a way, the phase of colonialism represents different types of connectivities which were both political and cultural.

Decolonization: India’s Relations with Her Eastern Neighbours India, in 1947, after its newly achieved independence embarked upon its voyage of nation-building, hinging substantially on the notion of optimism and idealism, as had been sketched by the first Prime Minister of independent India, Jawaharlal Nehru (Lal, 1967: 879). Subsequently, corresponding with its security and national interest, one of the first components of a successful foreign policy was premised upon a well-knit network of neighbours—“one of widening concentric circles around a central axis of historical and cultural commonalities” (Chattopadhyay, 2011: 95). Synonymously, what came to be recognized as a core of vitality was the geographically proximate immediate neighbours like Nepal, Bhutan and Bangladesh, intricately associated with India’s larger vision of Asian solidarity and commonality (Chattopadhyay, 2011: 95). The Himalayan neighbours (Nepal and Bhutan), for instance, had an overarching impact on how India formulated its special negotiations around treaties, ideal democracy, political pragmatism and most importantly, the presence of China, a contender in the region. Emanating from the desire of keeping these two “buffers” within a strategically designed Indian framework of protecting the northern frontiers, India accommodated many interests of these two kingdoms. Not only did Nehru acknowledge the sovereignty and territorial integrity of Nepal but also fortified Bhutan’s internal autonomy (Mitra, 2020: 237). Additionally, these two countries not only received subsidies along with infrastructural, economic and technical assistance but also received an invitation to the first Asian Relations Conference, held in New Delhi, in March 1947 (Mitra, 2020: 237). The Treaty of Peace and Friendship between the Government of India and the Government of Nepal in 1950 (MEA, 1950) and the Treaty of Perpetual Peace and Friendship between the Government of India and the Government of Bhutan (MEA, 1949) are testimony to this progress. In fact, the 1950s witnessed tumultuous circumstances for the entire Himalayan front when the Chinese accession of Tibet created a nebulous situation. Bhutan moved away from isolationism and also severed ties with Tibet, which in turn enhanced its relationship with India, leading to state visits to and from 1954 (Joseph, 2007: 92). On the other hand, Nepal’s relationship began on a more disparate terrain. The 1950s witnessed an anti-Indian campaign, stemming from the Citizenship Act of

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1952, which allowed Indians to migrate to Nepal and also acquire citizenship. India wanted a more liberal attitude from the ruling Rana dynasty, ultimately leading to direct intervention from the former. Nonetheless, this led to a more normalized and negotiated relationship between the two countries with the restoration of democracy and political parties leading to a mixed cabinet (Bharti, 2015). However, the relationship never had a very positive momentum ever since its inception. In 1989 when the treaties of trade and transit between India and Nepal expired, all the entry points were closed by India except two for cross-border transactions, mainly due to the prevailing international norms and regulations. This resulted in a dearth of essential supplies in Nepal resulting in an economic blockade. In retaliation, King Birendra Bikram began amassing arms from China, much to the dismay of India and also hosted talks with Pakistan. This situation was on the verge of easing when then Prime Minister of India, Rajiv Gandhi, lost the elections, paving the way for establishment of the V. P Singh Government, which led to the renewing of trade talks between the two neighbours once again (Bharti, 2015). However, the undercurrents of anti-Indian sentiments simmered below the surface in the years to come. For Bangladesh too, the relationship with India was a rather grim show and did not go as per the expectations of the Indian government, given the effort it had put in the eastern neighbour’s independence in 1971 from Pakistan. In spite of the IndoBangladesh Trade Pact of 1972, a series of disputes surfaced. For example, disputes over the maritime belt—sharing of the Ganges water and Muhurir Char problems (Disagreements over an islet on the Muhuri River, the boundary between Bangladesh and Indian State of Tripura) and Purbasha island in the Bay of Bengal (Hossain, 1981). A huge transition took place in the political scene as well with the military usurping political power, resulting from the assassination of Mujibur Rehman, the first Prime Minister of the country. Again, there were other problems like illegal migration to India because of the fragile porous border and reverse possession of territories. Unfortunately, the idea of beneficial bilateralism was nowhere to be found. Although both the countries tried to maintain a better relationship, the governmentto-government relationship could never gain momentum in this time frame directly affecting the people-to-people relationship. India and Sri Lanka share a relationship through ages. In the first three decades of decolonization, the relations between India and Sri Lanka were based on mutual respect and cordial relations. However, in the 1980s, bilateral relations were badly affected by political, diplomatic and economic upheavals. The armed resurgences in Sri Lanka and India’s alleged involvement in this problem aggravated the bitterness. In 1987, a bilateral peace agreement was signed by the two which allowed India to mediate the internal civil crisis of Sri Lanka. Sending the Indian Peace-Keeping Force (IPKF) and assassination of the India’s former Prime Minister Rajiv Gandhi were the most crucial incidents in India-Sri Lanka relations during this phase. With the liberalization of economies in the 1990s, the economic engagements were strengthened. After the civil crisis finally came to an end in May 2009, India–Sri Lanka relations started changing (MEA, 2014).

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India and South East Asia: The Post-1947 Era The ideal of mutual understanding and cooperation was reflected in India’s foreign policy in the post-1947 period. Jawaharlal Nehru as the first Prime Minister of India stressed on peaceful coexistence of countries with different ideologies, differing systems and pluralism. To this end, he outlined the five principles of peaceful coexistence, or Panchsheel, for conducting relations among countries in Asia (Chandra et al., 2008: 191). There was mutual respect for each other’s territorial integrity, sovereignty, non-aggression and non-interference in each other’s internal affairs, equality, mutual benefit and peaceful coexistence. Interestingly, these principles were accepted by the South East Asian countries in a conference held in Bandung, Indonesia, in 1955. The purpose of organizing the conference was to rekindle the spirit of mutual progress, well-being and friendship and to promote interaction between India and its Asian neighbours (for details see Guha, 2010: 340–343). Thus, in the 1940s and 1950s, India had a close rapport with the South East Asian countries, while in the 1960s, its engagement with the South East Asian countries was gradually replaced by periods of isolation. A clash of ideologies and superpower dynamics kept the geographically contiguous regions on opposite sides of the cold war divide (Raja Mohan, 2008: 48). In the 1960s and 1970s, while India was preoccupied with its problems with China and Pakistan, South East Asia was also going through turbulent phases with increasing communist insurgency within the region. To counter the communist threat perception, the countries of South East Asia were compelled to build a regional identity. As a result, the Association of South East Asian Nations (ASEAN) was formed in 1967. During the cold war days, apart from Vietnam, almost all the South East Asian countries perceived India as a close ally of the former Soviet Union (Naidu, 2004: 332). Strategic links and economic interactions were continuing at a very slow pace. On the other hand, the intensification of the US involvement in Vietnam led to polarization within South East Asia. In the late 1970s and the early 1980s, India’s attention was drawn again to South East Asia. The reason was the Chinese attack on Vietnam for the latter’s military intervention in Cambodia in February 1979. India, being the only non-communist country, supported Vietnam. Therefore, the status of ASEAN dialogue partner granted to India in May 1980 was quietly withdrawn the next month to punish India for its pro-Vietnam policy on the Cambodia issue (Muni, 1997: 209–212). India intended to revive in relations with its South East Asian neighbours mainly because of two reasons—first, post-cold war apprehensions about China moving in to fill the vacuum following the US withdrawal from the region, and second, the constraints of the liberalized economy under intense globalization (Grare & Mattoo, 2001: 93).With the process of decolonization setting in, the forces of globalization and liberalization provided a new impetus to India’s relationship with its South East Asian neighbours.

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Reviving Linkages: India Looking East Unfortunately, these civilizational and historical ties became weak after both India and South East Asian countries began to experience their own dilemmas, especially encountering with colonialism, the construction of nationalism and distant stand during the cold war period. The turning point was in 1992. The Look East Policy recalled bilateral relations, economically and politically. In addition, the rise in cultural aspects and attractiveness factors led to an embracing of soft power and cultural diplomacy in their strategic cooperation. Indian Council for Cultural Relations and India’s Ministry of External Affairs together with the Division of Cultural Relations under Thailand’s Ministry of Foreign Affairs played a vital role in strengthening and championing Indo-South East Asia connections. Apart from governmental agencies, non-state actors, including diaspora and transnational scholars, have significantly contributed a bridge for people-to-people contacts. At the same time, the sudden collapse of the Soviet Union in 1991 prompted a paradigm shift in India’s strategic worldview, including the countries of South East Asia. The economic reforms, coupled with the integrative forces of globalization, failure in strengthening South Asian regionalism and the renewed concern about assertive China in the Asia–Pacific region made India rethink the basic parameters of its foreign policy (Haokip, 2011:248). India wanted to revive its old linkages with its immediate eastern and southeastern neighbours. India, under the given circumstances, advocated a policy of new regionalism towards South East Asia and later East Asia and beyond. To cope with this evolving global scenario, in July 1991, New Delhi, under the leadership of then Prime Minister P.V. Narasimha Rao, announced its new economic policy, which was guided more by economic imperatives and less by political rhetoric. The groundwork for this foreign policy shift was prepared by the Rajiv Gandhi regime during the late 1980s and implemented by the Rao government soon after its coming to power in 1991 (Dutta & Basu Ray Chaudhury, 2018: 9–10). At this juncture, Indian foreign policy had threefold objectives: to maintain the territorial integrity of India; to ensure its geopolitical security by creating a durable environment of peace and stability in the region; and to build a framework for the well-being of the people by encouraging a healthy external economic environment (MEA, 1992: ii). During this phase, India’s emphasis on foreign policy shifted from “moral speak” to “realpolitik” (Grare & Mattoo, 2001: 93). The Look East Policy was officially launched in the year 1991 during the tenure of Prime Minister Rao, although the term “Look East” was mentioned for the first time in the Annual Report of the Ministry of External Affairs in 1996 (MEA, 1997: 118). In a true sense what Look East really means is that an outward-looking India is gathering all forces of dynamism, domestic and regional and is directly focusing on establishing synergies with a fast consolidating and progressive neighbourhood to its East in Mother Continent of Asia”.1 1

Statement by I.K. Gujral, Minister of External Affairs of India, ASEAN Post Ministerial Conference, Jakarta, 20–21 July 1996, see http://www.aseansec.org/4308.htm. Accessed 10 July 2009.

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The shift in India’s overall economic reforms and market liberalization policy attracted many countries of South East Asia to develop better economic linkages with India. India’s Look East Policy took off at the time when South East Asian countries started looking towards west. India’s aim at improving economic ties with its southeastern neighbours encouraged it to be a sectoral dialogue partner of the ASEAN in 1992, a full dialogue partner in 1995 and also a member of ASEAN Regional Forum (ARF) in 1996, demonstrating several other gestures of solidarity with its South East Asian neighbours. However, India’s Look East Policy did not take off in the way that the country desired in its initial phase. The major rationale behind this slow progress centred on New Delhi’s sluggish pace of economic reforms, the lack of stable governments in New Delhi and the 1997 financial crisis faced by ASEAN members. Further, the impact of globalization and slow adjustment of the Indochina states with reference to the socialist-oriented economy greatly obstructed the flowering of better ties between India and the Indochina states. Hence, India’s Look East Policy towards these less developed countries of South East Asia in the early 1990s clearly shows a less priority area of Indian foreign policy (Dutta & Basu Ray Chaudhury, 2018:11). Fortunately, this lack of initiative of India towards these countries did not last long. The Look East Policy Phase II was announced in September 2003. Three important developments inspired India to revive its interest in these countries: Myanmar’s inclusion in ASEAN in 1997, the formation of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) in June 1997 and the Mekong–Ganga Cooperation (MGC) on 10 November 2000 at Vientiane. In reality, India’s Look East Policy had crossed two important phases. The first phase (1991–2001) laid particular accent on cementing greater ties with the developed ASEAN members, in consonance with IMSTEC and the MGC platforms; the second phase (2002–2011) embraced New Delhi’s involvement with the late entrants of ASEAN (Cambodia, Laos, Myanmar and Vietnam) and towards further East, looking at China, Japan, South Korea, Australia and New Zealand. India-ASEAN relations were upgraded to a Summit Level Partnership in 2002. India became one of the four ASEAN Summit Level Partners along with China, Japan and Korea. At the Second India-ASEAN Summit in October 2003, India and ASEAN signed the Framework Agreement on Comprehensive Economic Cooperation, leading to the creation of a Free Trade Area by the year 2011, and India’s accession to the Treaty of Amity and Cooperation in South East Asia. The third phase started after 2012. The Government of India continued to work towards what it called the “Enhanced LEP”. This new re-engagement policy of India with the countries of South East, East Asia and Asia–Pacific has been envisioned based on expediency and progressive self-interest (Anand & Mishra, 2014). This Look East Policy essentially represents a multipronged approach, encompassing political, strategic and economic aspects. By virtue of the geographical situation as well as the civilizational contacts in culture, religion, language and trade; the growing business and investment in contemporary times; and the presence of a large Indian diaspora, India has been placed on a high pedestal. It is important to note that at the 7th India-ASEAN Summit held in October 2009, India announced

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a contribution of US$50 million to the ASEAN-India Cooperation Fund to support the implementation of the India-ASEAN Plan of Action 2010–15, which envisages cooperation in a range of sectors in the political, economic and socio-cultural spheres for deepening and intensifying India-ASEAN cooperation (MEA, 2013). At the India-ASEAN Commemorative Summit in December 2012, the leaders welcomed the conclusion of the negotiations on India-ASEAN Trade in Services and Investment Agreements. The India-ASEAN Trade-in-Goods Agreement was signed on 13 August 2009 at the India-ASEAN Economic Ministerial Meeting in Bangkok and became fully operational on 1 August 2011 (MEA, 2013). Cooperation between India and ASEAN is also being augmented in the cultural, educational and academic fields, through the promotion of people-to-people contacts and ongoing initiatives such as the Youth Exchange Programmes, Media Exchange Programmes, Special Training Courses for ASEAN Diplomats and Eminent Persons Lecture Series. India has established Centres for English Language Training (CELT) and Entrepreneurship Development Centres (EDC) in Cambodia, Lao PDR, Myanmar and Vietnam (CLMV countries) (MEA, 2013). While emphasizing regional integration, reform and liberalization of India, the policy also stressed on rapid economic growth and development of the northeastern region of India. Therefore, engaging the northeast of India in the process of various regional and subregional cooperative initiatives became one of the important features of India’s Look East Policy (Bhaumik, 2014: 1).In this context, initiatives towards multilateral cooperation across borders such as the Bangladesh-China-IndiaMyanmar (BCIM) and BIMSTEC are seen as holding “promises of historic proportions for transnational region-building in the area” (Bhaumik, 2014). However, the fact remains that though this policy brought India closer to the ASEAN nations, India could not fully utilize the benefits of such relations (Bhaumik, 2014).

Act East Policy: New Momentum in India’s Neighbourhood Policy India’s Look East Policy gained momentum through the newly furnished and more focused, proactive Act East Policy (AEP) during the India-ASEAN Summit in Myanmar in November 2014.2 The foundation and objective of the Look East Policy remain the same but to provide impetus and active energy, the policy was upgraded. The Act East Policy of India is to strengthen its interaction with its southeastern neighbours in three important domains—commerce, culture and connectivity (Mathur, 2014). In this process of re-linking with southeastern countries, especially with Myanmar and Thailand, physical and infrastructural connectivity by road, rail, 2

“Media Statements by Prime Minister of India and Prime Minister of Vietnam in New Delhi”, 28 October 2014; “Opening Statement by Prime Minister at the 12th India-ASEAN Summit”, (speech, India-ASEAN Summit, Nay Pyi Taw, Myanmar, 12 November 2014), see http://www.mea.gov.in/ incoming-visitdetail.htm?24143/. Accessed 10 June 2016.

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air and water through India’s northeast—a strategic point of India—for the promotion of economic links and activities with the countries to the east and South East, has been a topic of major concern for the Modi government (Dutta & Basu Ray Chaudhury, 2018: 15–17). Prime Minister Modi’s commitment to stability in the South Asian neighbourhood will not necessarily come at the expense of East Asian engagement. India’s northeastern region is surrounded by the territory of Bangladesh and a 22 km stretch of Siliguri corridor is the only link with the other parts of the country. Under these circumstances, the states of India’s northeast cannot be easily accessed from other parts of India without Bangladesh’s cooperation. The positive relations of India’s east with its South Asian neighbours will also be crucial to enhancing its land connectivity with South East Asia. More so, aspiring to be a global power India also intended to promote a “Look East, Link West Policy” since the beginning of Modi regime keeping a broader Indo-Pacific conceptualization of India’s region in consideration (Deccan Herald, 2014). Furthermore, while integrating AEP into Indian foreign policy, it may be argued that AEP affirms the close historical and cultural ties between India and South East Asia, considering people-to-people relations between India’s northeast region and its South East neighbours. Modi’s administration has been exacerbating Indian diplomacy by conducting several multilateral and bilateral dialogues featuring South East Asian states, highlighting huge opportunities to share economic growth and mutual prosperity. The age-old religious ties between India and South East Asia have been a major catalyst behind the AEP on the basis of which strengthening infrastructure facilities at the place of pilgrims and uniting them as hub of religious tourism has also been conceptualized. Buddhism—as a religion that was born in India and spread to other countries afterwards—contains great potential for inbound flow of tourists to India from other neighbouring states in East and South East Asia. It is worth mentioning here that throughout the region, Mahayana and Theravada traditions are shared, like Nepal. India’s northeast region is home to several Buddhist heritage sites which offer Buddhist heritage trails located in Arunachal Pradesh and Sikkim (including Rumtek Monastery, Urgelling Monastery, Tawang and Bomdila Monastery). It is interesting to note in this context that within the framework of AEP, an institution-building approach was taken through the creation of the International Buddhist Conclave (IBC). The IBC was launched to enhance the religious component in strengthening people-to-people linkages and thereby promoting religious tourism. Within the AEP religious, tourism has been regarded as a potential soft power by the Indian government. The collaborative initiatives by the central and state governments of India may lead to infrastructure development in the northeast region (Valendo, 2022). It has been argued that if the infrastructural facilities are ably backed by the development in hospitality, services and education segments, the economic benefits of religious tourism are estimated to be over $50 billion. As partnerships develop in reinvigorating age-old bonds between Jambudvipa and Dvipantara, an astute awareness and comprehensive understanding would be developed across the borders. The benefit of cementing ties is not merely derived from an extension of India’s “arc of

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influence” and “soft power”, but also from the value inherent in reviving 2,000 years of international interaction (Kanegaonkar, 2020).

Connectivity and Development Cooperation as Driving Forces: Reimaging BIMSTEC From strengthening political and cultural ties to fostering economically beneficial associations, “connectivity” has become a buzzword in recent years. Improving connectivity is the key to a region’s security and development. Connectivity may provide the transmission channels through which development impulses can spread across the region and can add to the dynamism of economic and social progress of both India as well as its eastern and southeastern neighbours. For India, such developments promise to be harbingers of dramatic changes in its own eastern and northeastern states (Basu Ray Chaudhury & Basu, 2015: 15). In this context of connecting nations, BIMSTEC helps in achieving two major goals for India for its national development as well as fulfilling its strategic aspiration to cater to the wider concept of “Indo-Pacific” and an Indian Ocean community. The grouping brings together India’s strategic peripheries (south, east and north) (Yhome, 2016, 2017). Former Foreign Secretary of India, Sujata Singh, considers BIMSTEC a potential game-changer for Northeast India’s quest for prosperity, which is a part of India’s larger goal of transforming its remote northeastern region into an engine of growth (Chand, 2014). Thus, BIMSTEC is crucial for New Delhi’s key foreign policy priorities, the “Act East” Policy and the “Neighbourhood First Policy”. BIMSTEC also serves the country’s purpose of developing a new regional grouping (as BIMSTEC recently declares itself as a regional group), especially with SAARC meeting with little success so far. While delivering the 20th Anniversary Speech in 2017, Indian Prime Minister Narendra Modi said, “BIMSTEC not only connects South and South East Asia but also the ecologies of the Great Himalayas and the Bay of Bengal. With shared values, histories, ways of life and destinies that are interlinked, BIMSTEC represents a common space for peace and development. For India, it is a natural platform to fulfil our key foreign policy priorities of ‘Neighbourhood First’ and ‘Act East’” (The Indian Express, 2018). Immediately after taking office as external affairs minister in 2019, S. Jaishankar noted that India saw a mix of “energy, mindset and possibility” in BIMSTEC (The Economic Times, 2019). Both the establishment of the BIMSTEC many years ago and the efforts in recent years for its revitalization are results of geopolitical changes in the regional milieu. Bangladesh, for example, views the BIMSTEC as a platform to not only position itself as more than just a small state in the Bay region but also to push its economic development. Sri Lanka regards this grouping as an opportunity to fulfil its aspirations to connect with South East Asia and serve as the subcontinent’s transhipment hub for the wider Indio-Pacific region. For the two landlocked Himalayan member states,

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Nepal and Bhutan, BIMSTEC is an opportunity to gain access to the BoB. For Myanmar and Thailand, the BIMSTEC provides an opportunity to access India’s burgeoning consumer market and reduce their overdependence on China (Basu Ray Chaudhury & Rai, 2020: 4–5). The fast-changing geostrategic and geoeconomic forces have shaped the connections between India and what it calls the “extended Bay”, or the South East Asian countries of Malaysia, Singapore and Indonesia. The histories of the civilizational past along with the physical capital related to connectivity have thrived in the region. There is no doubt that any connectivity initiative in the region needs to be viewed in the broader backdrop of the unfolding geopolitical and geoeconomic forces in the Indo-Pacific. India’s Indo-Pacific vision is delineated by the Security and Growth for All in the Region (SAGAR) postulating a free, open and inclusive region. Even Japan’s and the US’ visions of “Free and Open Indo-Pacific” (FOIP) are not confined to security and strategic implications; they also have connotations for trade and development. The US insists on rekindling the “Quad”—a potential security arrangement among the four large democracies of Australia, India, Japan and the US, creating a combined force in the region to balance the unbridled advancement of a resurgent China. A large number of free trade agreements and regional trade agreements have been hallmarks of the geoeconomic regime of this region. While China has conceptualized its Belt and Road Initiative (BRI), the trilateral free trade agreement between China, Japan and South Korea, the Transatlantic Trade and Investment Partnership between the US and European Union and other regional trade agreements are emerging due to the apparent failure of the World Trade Organization’s Doha Round. Moreover, India’s temporary withdrawal from the Regional Comprehensive Economic Partnership (RCEP) has brought a different dimension to the geostrategic and geoeconomic concerns in the region. Therefore, it is important to explore the Bay of Bengal as a maritime space in the broader context of the geostrategic construct of the Indo-Pacific, while dealing with India’s strategic dynamics with Thailand, Malaysia, Singapore and Indonesia (Basu Ray et al., 2019: 7–8). In this context, it is also imperative to emphasize the connecting road link between China, South East Asia and India. If this link road gets renovated in a politically viable manner in the future, it may facilitate international overland trade connecting China, Myanmar and other South East Asian countries to India. The Growth Triangle involving Ledo-Bhamo-Dali suggested by the Chinese experts is worth mentioning here. The creation of Ledo-Bhamo-Dali Growth Triangle, aiming for an economic grid across the whole of Mainland South East Asia, presents fascinating imagery. China’s inclusion in the aforesaid proposed Growth Triangle is important to reassert the historical linkage from southern China. For China, it is the Kunming Initiative, which seeks to link up the Chinese province of Yunnan with Myanmar and India’s northeastern states and eventually Thailand and other countries of mainland South East Asia as an economic grid and can still become a win–win for all.

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COVID-19 Pandemic and a New Vista of Connectivity The pandemic, COVID-19, has changed the world drastically. The Bay region is no exception to it. The supply chains across the regions got affected badly since the outbreak of this severe health crisis. In order to revive the adverse economic situation, the countries need to think of strengthening regional cooperation in the BIMSTEC region. The responses to the current global uncertainties also suggest a greater scope of regional cooperation among the countries in the Bay region. Across borders, regional cooperation may help the BIMSTEC countries overcome divisions that impede the flow of trade in goods and services, people and ideas, particularly when all members have been facing a common challenge to beat this severe health crisis. Indeed, the COVID-19 outbreak has brought the world to a standstill. The world faces a new “Great Depression” and global panic as the virus toll mounts. The kind of undeclared cold war that had been gathering momentum shows its true face under the tedium of COVID-19, which has already had major impact on international relations, especially in the Asia–Pacific region. Apart from USA vs. China reciprocal allegations against each other about the origin of the Coronavirus, interregional relations have also become strained. The central directive of these relations is antiChinese feelings either at government or at civil society levels. What would be the role of India in Asia–Pacific, especially in the context of its Act East Policy? This question has been raised in the public domain. Analysts are unanimous in predicting that the dampened demand will surely translate into an economic slowdown for the entire region. Like ASEAN, the BIMSTEC countries are also very badly affected in tourism and related service sector. Australia and Japan are trying to persuade India, which backed away from the RCEP talks, to rejoin to help balance China’s role. Coronavirus could be a game-changer for nations striving to catch up with the rest of the world. It may be a call for South East Asia to wake up and direct its own transformation. The region can find a silver lining to the turmoil if ASEAN starts to pose India as a serious alternative to China as a united bloc. Prime Minister Modi has taken a lead both at the G-20 and in SAARC advocating international cooperation to defeat COVID-19. In fact, Modi also needs to take a leading role in ASEAN & BIMSTEC, which are part of India’s Act East Policy. India’s non-participation in China’s “Belt and Road Initiative” makes it all the more important for India to strengthen its own strategic and economic ties in South East Asia. It IS not yet clear if the COVID-19 pandemic will encourage India to respond positively regarding RCEP. With fellow Asian nations, Beijing might employ a mixture of assertive and non-assertive approaches. A “low-profile” approach might be visible on conflicting issues like the South China Sea and East China Sea, as well as the boundary disputes with India for some time, even though there is nothing changing Beijing’s claim and posturing. Overall, a moderate approach combined with both assertive and non-assertive posturing is likely to emerge in Asia. Holding relatively stable relations with India will become a priority, even though Beijing

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would be mindful of New Delhi’s growing partnership with the US and India’s rising Indo-Pacific profile.

About the Book Against this backdrop, the book is an attempt to delve into the arenas of different types of connectivities between India and her South and South East Asian neighbours. The book analyses the changing nature of connectedness from the age of India’s Look East to the age of Act East Policy so far as India and South and South East Asia are concerned. It looks into issues of regional cooperation right from the era of Look East till the COVID-19 affected recent time span. The volume, comprising thirteen chapters (excluding the introduction), deals with various aspects of India’s diplomatic relations with South and South East Asian countries and also intends to analyse the neighbours’ perceptions of India’s diplomatic initiatives since the inception of the Look East Policy. The chapter by Lipi Ghosh on India-South East Asia Relations and Cultural Interactions: A Past Profile takes into consideration the aspects of past commercial and cultural connections between India and South East Asia. India had developed close connections with South East Asia from the historical past to the era of colonial rule. The chapter talks of overland and maritime contacts or linkages between India and South East Asia. It also discusses different dimensions of India’s cultural contacts with South East Asia from the historical past till the year 1947. Thus, this chapter discusses Tagore’s arrival in South East Asia and the subsequent intellectual connectedness. Moreover, from the 1920s and 1930s, there was an increasing sense of intellectual connections throughout Asia arousing anti-colonial feelings and nationalist sentiments, and awareness of mostly peaceful and rich historical exchanges. Several Indian nationalist leaders travelled to South East Asia including Rashbehari Bose, Mahatma Gandhi, Jawaharlal Nehru, P. J. Mehta, and PeriyarV. Ramasamy (commonly known as Periyar), Subhas Chandra Bose. This chapter discusses the instances of these past relations and explores the possibilities about the use of soft power in the India-South East Asia relations. The next chapter entitled The “Look East Policy” of Bangladesh: An Opportunity for Building Complementary and Shared Development for Eastern South Asia authored by Asish Banik poses a crucial question: What explains the linkage between Bangladesh’s “Look East Policy” and the country’s balancing foreign policy adjustments with two emerging geostrategic initiatives, namely, the Belt and Road Initiative (BRI) and the Indo-Pacific Strategy (IPS)? This chapter answers this question by analysing Bangladesh’s proactive role in regional arrangements offered by two major powers, the United States and China. In the context of the geolocation of Bangladesh as a littoral nation, it is a highly strategic and rising economic power in South Asia. This study analyses in detail the nation’s strategy for ensuring its presence in all regional and subregional arrangements and global initiatives with a view to facilitating shared prosperity, vision and development for eastern South Asia. The

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study looks into Bangladesh’s firm positioning towards furthering a complementary, fair and balanced relationship through meaningful participation and engagement in the regional and global initiatives, which is crucial to bring about peace, security and development for all the countries in the Indo-Pacific and South East Asia. While scrutinizing these dimensions of international relations, the study also touches upon its possible implications for the contemporary geopolitics of the Indo-Pacific region. Sohini Nayak’s chapter on Manifesting the South East Asian Dream: Understanding the Bhutanese Perspective indicates that the neighbourhood strategy of Bhutan is a response to myriad geopolitical demands, to suit its ambition in the wider global order of substantial competition. Consequently, there is a perpetual renewal of cardinal propositions, aimed at widening its diplomatic pursuit. One such narrative that the landlocked nation has been banking upon is the Act East Policy of India, in the garb of the Indian “Neighbourhood First Policy”, aimed at enhancing the perpetual periphery of the country and shifting the paradigm towards the South East Asian nations, seeking higher regional integration. With this background, the paper seeks to identify the foreign policy narratives of Bhutan along with probable solutions that it can put forward to accomplish the South East Asian dream. Purushottam Ojha writes on Nepal’s Drive for Multimodal Connectivity. Nepal remained in isolation from the global market for a long time due to poor transport connectivity and lack of access to a seaport. The first road linking the border city of Birgunj with Kathmandu was constructed during the first half of the 1950s, followed by the construction of other highways and roads connecting major cities of the country. The road has become the preferred mode of transportation in the hills and mountains while prospects for multimodal transport are high in the southern plains. The development of Inland Clearance Depots (ICDs) and trade facilitation measures taken up in the second half of the 1990s, marked a departure towards the implementation of a multimodal transport system in the country. Nepal has concluded a transit transport agreement with its three neighbouring countries. It has been working with its neighbours in establishing multimodal transport network under the regional, subregional and bilateral framework. Initiatives for the development of hard and soft infrastructures for seamless connectivity are on the anvil. However, this needs to be reinforced with greater collaboration, confidence and cooperation among BBIN countries. The chapter by Chulanee Attanayake entitled BIMSTEC and India’s “Act East” Policy: Implications for Sri Lanka reinterprets the policy of the Government of Sri Lanka in the present era of Look East to Act East. In 2018, the Sri Lankan Government mentioned that Sri Lanka is looking east in its foreign policy engagement. What Sri Lanka meant by its “Look East Strategy” was not clear. Yet, it seemed like Sri Lanka was using the term to mean pursuing ties with ASEAN, not to counter Chinese influence, but to strengthen its own bilateral relationships and gain intrinsic benefits. In general, the terminology “Looking East” is associated with India in its economic relations with the South East Asian region. The Look East Policy which originated in the 1990s was upgraded to Act East in 2014 giving greater emphasis on strengthening economic, security and strategic partnerships with ASEAN countries. Parallel to launching the “Act East” policy in 2014, India also rejuvenated the BIMSTEC which

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had been relatively dormant and inactive for decades since its inception. As a founding member of BIMSTEC, this has opened opportunities for Sri Lanka to engage with the South East Asian countries. This chapter explores how India’s Act East Policy and BIMSTEC rejuvenation can be a platform to realize Sri Lanka’s foreign policy objectives of engaging with South East Asia. While the book looks towards South East Asia, ThinThin Latt’s chapter on India’s Act East Policy and Neighbouring Powers: India-Myanmar Relations says that relations between India and Myanmar are strategically important as there is a long borderline between the two countries on both land and maritime borders. Literature, culture and religion have been intertwined between Myanmar and India for thousands of years. They have enjoyed more than 70 years of diplomatic relations since India and Myanmar began formal relations in 1948. Both the countries continued to strengthen their warm relations since the 1990s when India adopted the Look East Policy. One key factor underlying for current importance of India-Myanmar relations is India’s Act East Policy launched in 2014. India emphasizes that Myanmar is a priority friend of India in its both Eastward Policy and Neighbourhood Priorities. Myanmar also wants to seek greater engagement with India although its reliance on China continues to be profound. Myanmar’s government is keen to attract India’s investments and counterbalance Chinese influence in the region. India’s cultural connectivity with Myanmar is a key step towards forging strong relations between them. India’s engagement with Myanmar includes ICT, food processing, hydrocarbons, India-Myanmar-Thailand trilateral highway, military and defence exercise and last but not least educational sectors like IT and research. In Latt’s opinion, Myanmar also wants deeper activities from India to deepen its relations. Piti Srisangnam’s chapter entitled India’s Act East-Thailand’s Go West in the New World Order explains the interactions between three major players: USA, China, India and South Asia in the “global value chains” that are breaking/decoupling and amidst the changing world order. Thailand, India and many developing countries will be affected if they do not adjust their trade and investment policies. Accelerating trade negotiations in the more comprehensive and high-standard trading arrangements format will allow Thailand and India to position themselves as the central chain linking this breaking chain. The author suggests use of the RCEP approach to trade negotiations as a model for further development of trade talks. The chapter on India-Malaysia Relations: Strategic Engagement in the Context of the Act East Policy jointly authored by Mala Rajo Sathian and Geetha Govindasamy examines the trajectory of Malaysia-India relations by analysing some of the key issues involved, particularly in the last two decades or so. It highlights Malaysia’s pro-China foreign policy, especially in the economic sector, which stands in contrast to India’s pro-United States strategy that supports the Indo-Pacific concept and the Quadrilateral Security Dialogue (QUAD). Despite having gravitated somewhat in the opposite direction, continued efforts to strengthen bilateral relations is a common feature from both sides. To understand the evolving trends in bilateral relations, the chapter traces three select areas that have shaped consensual ties in the last two decades. These are (1) bilateral and diasporic relations, (2) diplomacy and security,

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and (3) trade and commodity expansion. There is overall aim to identify the inattention that exists in the context of the Act East Policy as well as Kuala Lumpur’s interests in New Delhi. The chapter by Sinderpal Singh on Singapore-India Relations: An Enduring Convergence of Interests appraises Singapore-India relations, concentrating on the post-cold war era specifically. The first part, as context, will outline Singapore’s relations with India during the cold war within the wider framework of India-ASEAN relations. The second part will look at the wide-ranging transformation in the bilateral relationship shaped by the end of the Cold War. The third section examines the period since 2014 with the formation of a Bharatiya Janata Party (BJP)-led government in India. The concluding section will offer some likely future trends in the bilateral relationship. It points to some recent challenges to the bilateral relationship, driven largely by the Indian government’s seeming shift in dealing with China. However, the fundamentals of the Singapore-India relationship, specifically in the defence and security domains, remain robust. This broad congruence of interests will continue to sustain the growing ties between the two countries. Do Thu Ha talks about India-Vietnam relations through several phases of development. Her chapter entitled Education and Knowledge-Based Economy in India in the Last Two Decades and some Suggestions to Vietnam mentions one of the most crucial issues in the age of globalization, that is the relation between the economy and education, which includes three main components: 1.The knowledge-based economy in India in the last two decades through analysing the actual situations in the development of the Indian economy and the reasons for Indian economic growth, 2. the role of education in developing the Indian economy in such aspects as the Indian ambition to become an educational superpower, the “Great Leap” and the attraction of Indian education; the shortcomings in brain drain and educational strategies in India, and 3. some suggestions to Vietnam in the friendship and cooperation to develop between the two countries. Premesha Saha’s chapter is entitled India and Indonesia in the Indo-Pacific: Time for a Greater Pushwhich shows how the India-Indonesia relations had kicked off on a big scale with the two leading the way for the convening of the 1955 Banding Conference, also known as the first Afro-Asian meeting. After a temporary thaw in the relationship, again a big push was provided with the elevation of the ties to a Comprehensive Strategic Partnership in 2005 under the former Indonesian President Susilo Yudhoyono, who believed in the “hundred friends, zero enemies” dictum when it came to formulating his country’s foreign policy. Despite having a Comprehensive Strategic Partnership in place, the India-Indonesia relations have been staggered, it has not been able to achieve much and the two countries have a long way to go when it comes to cementing a strong strategic bond. In 2018 after the visit of the current Indonesian President, Joko Widodo, to New Delhi, the Shared Vision Statement of Maritime Cooperation in the Indo-Pacific was signed, along with developing its maiden deep-sea port in Indonesia’s Sabang close to Andaman and Nicobar Islands. The groundwork is in place to take this relationship a step further now, especially with the Indo-Pacific region facing strategic turmoil with the ongoing US-China tussle. Bilateral relationships and multilateral partnerships have become the by-word of

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engagement in the Indo-Pacific. Against this background, this chapter will provide the past and the current trends of India-Indonesia relations and will provide policy recommendations on how these relations can be cemented as a truly strategic bond in the current Indo-Pacific discourse. Dipak Bali’s chapter on India’s Act East Policy: China’s Perceptions and Responses argues that China sees India’s Act East Policy in three phases—the first two correspond to a period when both managed to establish equilibrium and understanding, and when India desired to strike a balance between the US and China. The third phase corresponds to the ascendance of Prime Minister Modi on the Indian political scene—the time when the equilibrium was lost owing to the power shift favouring China, and China’s malevolent relations with India following frequent standoffs resulting in the Doklam and Galwan conflicts. India realigning its Act East Policy and subregional and multilateral mechanisms like the BIMSTEC, SAGAR, IORA, and Quad, etc., have been pronounced as part and parcel of India’s Act East Policy, serving the unstated goals of India’s Indo-Pacific Strategy. Since China views India’s Indo-Pacific Strategy essentially as a containment of the Chinese by the US and its allies, as a response, Chinese scholars believe that India’s strategic vision is governed by its thinking on South Asia and the Indian Ocean; nonetheless, they are apprehensive that the Indo-Pacific Strategy does give it levers to intervene in the South China Sea, diminish ASEAN’s centrality and oppose China’s connectivity projects. The Bay of Bengal holds a strategic position in India’s Look East to Act East Policy. Anasua Basu Ray Chaudhury writes on Strengthening Maritime Connectivity across the Bay of Bengal: India and her Eastern and Southeastern Neighbours which focuses on strengthening maritime connectivity between India and SEA in the Bay of Bengal region against the backdrop of India’s port-led development and its implication on the strategy of growth for all. The chapter seeks to understand the present and potential port connectivity of India through two separate but interconnected themes: (1) understanding the connectivity, facilitating the infrastructure of the maritime ports in India around the Bay, and the measures are undertaken to improve connectivity with other ports of the Bay littorals, and the obstacles hindering such endeavours; and (2) understanding inter and intraregional riverine port connectivity through inland waterways and attempting an estimation of the possibility to revive India’s northeast as hinterland by linking it to the Bay of Bengal through rivers. Finally, the book has a chapter on the scenario of regional cooperation in the Bay of Bengal authored by Prabir De. The chapter entitled Regional Integration in the Bay of Bengal Region in Post-COVID-19 Period indicates that regional integration can lead to substantial economic gains in the BIMSTEC region particularly in the postCOVID-19 period. Regional integration in the BIMSTEC can be a building block for global integration. However, the benefits of regionalism are likely to depend on the integration spirit of the BIMSTEC countries. This article discusses the next round of the integration of the BIMSTEC region at a time when the Coronavirus-driven pandemic and its successive rounds have heavily affected the growth of the region. The responses to the current global uncertainties also suggest a greater scope of

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regional cooperation among the countries in the BIMSTEC region. Regional integration may help the BIMSTEC countries overcome divisions that impede the flow of trade in goods and services, people and ideas, particularly when all members have been facing a common challenge to beat the Coronavirus pandemic. In a nutshell, the book analyses one major aspect of the transformative process of the Look East Policy towards Act East, i.e. India’s engagements with regional powers both at bilateral and multilateral levels. In other words, it seeks to explore the foreign policy dimensions of the Government of India through the ages with special emphasis on post-1990 period. Similarly, the book intends to enquire into the perspectives of the neighbouring states of east of South Asia and South East Asia. The volume is a potential contribution to the ever-growing literature of International relations and will be an interesting study for postgraduate students and researchers in Social Science.

References Anand, V., & Mishra, R. (2014, November20). India’s ‘act east’ policy: A perspective. Vivekananda International Foundation. http://www.vifindia.org. Accessed June 14, 2016. Basu Ray Chaudhury, A., & Rai, R. R. (2020, August 6). Towards a deliberative BIMSTEC. In ORF Occasional Paper (No. 263, pp. 4–5). Basu Ray Chaudhury, A., & Basu, P. (2015). India-Bangladesh connectivity: Possibilities and challenges (Vol. 15). ORF. Basu Ray Chaudhury, A., Basu, P., & Bose, S. (2019). Exploring India’s maritime connectivity with the extended bay (7–8). ORF. https://www.orfonline.org/wp-content/uploads/2019/11/ORF_ Report_India-ExtendedBOB.pdf Bharti, S. C. (2015, November 5). Indo-Nepal relations: 1947–2015. Central University of Haryana. Bhaumik, S. (2014, June). Look east through northeast: challenges and prospects for India. In ORF Occasional Paper 51. Observer Research Foundation (ORF). Chand, M. (2014, March 1). BIMSTEC: Building bridges between South and Southeast Asia. Ministry of External Affairs, Government of India. https://www.mea.gov.in/in-focusarticle.htm? 23016/BIMSTEC+Building+bridges+between+South+Asia+and+Southeast+Asia Chandra, B., et al. (2008). India since independence (191). Penguin. Chattopadhyay, P. (2011). The politics of India’s neighbourhood policy in South Asia. South Asian Survey, 18(1). http://www.dcac.du.ac.in/documents/E-Resource/2020/Metrial/422Cihnni taBaruah2.pdf Deccan Herald (2014, September25). India needs policy to Look East, link West: Narendra Modi. http://www.deccanherald.com/content/432698/india-needs-policy-look-east. htm. Accessed June 12, 2016 Dutta, A. K., & Basu Ray Chaudhury, A. (Eds.). (2018). Connecting nations: Politico-cultural mapping of India and Southeast Asia (pp. 9–10). Primus. Grare, F., & Mattoo, A. (Eds.). (2001). India and ASEAN: The politics of India’s look east policy (p. 93). Manohar, in Association with Centre de Sciences Humaine, Institute of Southeast Asian Studies, Singapore, and Centre for the Study of National Security Policy. Guha, R. (Ed.). (2010). Makers of modern India (340–343). Penguin. Haokip, T. (2011). India’s look east policy: Its evolution and approach. South Asian Survey, 18(2), 248. Hossain, I. (1981, November). Bangladesh–India relations: Issues and problems. Asian Survey, 21(11), 1115–1128. https://www.jstor.org/stable/2643997

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Joseph C. M. (2007, January–March). India–Bhutan relations: An overview. Indian Foreign Affairs Journal, 2(1), 92. https://www.jstor.org/stable/pdf/45340648.pdf Kanegaonkar, S. (2020, September 4). Putting dharma on circuit. Business Line, The Hindu. https://www.thehindubusinessline.com/blink/know/modis-act-east-policy-rests-on-ind ias-ramayana-and-buddhist-circuits/article32518505 Lal, D. (1967, May 13). Indian foreign policy. Economic and Political Weekly, 2(19), 879. https://www.jstor.org/stable/pdf/4357933.pdf?refreqid=excelsior%3A9b13bbe450bf9b2d cbe386f1391fd621&ab_segments=&origin= Mathur, Y. (2014). India’s look east–act east policy: A bridge to the Asian neighbourhood. In International Relations Conference, Symbiosis Institute of International Studies. http://www.irc onference.in/assets/IRC_conference_proceedings.pdf. Accessed June 11, 2016. Ministry of External Affairs. (1949, August 8). Treaty of perpetual peace and friendship. Ministry of External Affairs, Government of India. https://mea.gov.in/bilateral-documents.htm?dtl/5242/ treaty+or+perpetual+p Ministry of External Affairs. (1950, July31). Treaty of peace and friendship. Ministry of External Affairs, Government of India. https://mea.gov.in/bilateral-documents.htm?dtl/6295/Treaty+of+ Peace+and+Friendship Ministry of External Affairs. (1992). Annual report 1991–92(ii). Ministry of External Affairs, Government of India. Ministry of External Affairs. (1997). Annual report 1996–97(118). Ministry of External Affairs, Government of India. Ministry of External Affairs. (2013). India–ASEAN relations. Ministry of External Affairs, Government of India. https://www.mea.gov.in/Portal/ForeignRelation/India-ASEAN_Relations.pdf. Accessed June 14, 2016. Ministry of External Affairs. (2014). India–Sri Lanka relations. Ministry of External Affairs, Government of India. https://www.mea.gov.in/Portal/ForeignRelation/Sri_Lanka_January_2 014.pdf Mitra, D. (2020). India’s policy towards Nepal and Bhutan: Nehru to present. In B. Singh (Ed.), Revisiting Nehru in contemporary India(237). Routledge, K.W Publishers Pvt. Ltd and Nehru Studies Centre, University of Jammu. Muni, S. D. (1997, September). In Review of B. Ghoshal (Ed.), India and Southeast Asia: Challenges and Opportunities, Konark (in association with India International Centre), 1996. In Contemporary Southeast Asia, 19(2), 209–212. Naidu, G. V. C. (2004, April–June). Wither the look east policy: India and Southeast Asia. Strategic Analysis, 28(2), 332. Raja Mohan, C. (2008). India’s geopolitics and Southeast Asian security. Southeast Asian Security(48). Institute of Southeast Asian Studies (ISEAS). http://www.jstor.org/stable/27913351. Accessed June 26, 2016. The Economic Times. (2019, June 7). SAARC has problems, BIMSTEC full of energy, says Jaishankar. https://economictimes.indiatimes.com/news/politics-and-nation/saarc-has-problemsbimstec-full-of-energy-says-jaishankar/articleshow/69684367.cms. Accessed September 2, 2020 The Indian Express. (2018, August 31). Simply put: Why BIMSTEC summit matters. https://indian express.com/article/explained/why-bimstec-summitmatters-pm-narendra-modi-5333363/ Valendo, M. (2022, April 25). Act east policy, cultural connectivity and tourism. https://myvoice. opindia.com/2022/04/act-east-policy-cultural-connectivity-and-tourism Yhome, K. (2016, October 3). BIMSTEC and India’s shifting diplomatic calculus. Raisina debates. Observer Research Foundation. http://www.orfonline.org/expert-speaks/bimstec-indiashiftingdiplomatic/ Yhome, K. (2017). BIMSTEC rediscovering old routes to connectivity. In ORF issue brief 213. Observer Research Foundation. https://www.orfonline.org/research/bimstec-rediscovering-oldroutes-connectivity/

Chapter 2

India and South East Asian Relations: The Past Profile Lipi Ghosh

Abstract Historically, India and South East Asia have had close connections with each other from ancient times to the era of colonial rule. The chapter talks of overland and maritime contacts or associations between the two regions. It also discusses different dimensions of India’s cultural contacts with South East Asia from the historical past till the year 1947. Thus, this chapter discusses Tagore’s arrival in South East Asia and the subsequent intellectual connectedness. Moreover, from the 1920s and 1930s, with a resurgence of Indian group of intellectuals and establishment of Greater India Society, travels from India to South East Asia became a common feature. Political figures like early Bengal revolutionaries, Rashbehai Bose, Subhas Chandra Bose, Jawaharlal Nehru had their contacts with South East Asia. The poet Rabindranath Tagore and his team visited South East Asia more than once. Later persons like Swami Satyananda Puri too left remarkable impact on re-establishing civilizational ties. Indian Ocean emerged as an arena of interregional civilizational linkage between South and South East Asia. This chapter discusses instances of these past relations and explores the possibilities about the use of soft power in India-South East Asia relations. Keywords Historical connectivities · Cultural interactions · Culture beyond borders · People-to-people contacts · Soft power plomacy · Look East · Act East

Introduction Inter-Asian association and connectedness have become important subjects for modern-day research. Physical and cultural connectivity in the inter-Asian field has moved beyond and transcended many national and political boundaries. This has brought into focus two important dimensions: land and maritime connectivities. The present chapter will talk about India’s connectivities with South East L. Ghosh (B) Former Vice Chancellor, Sona Devi University, Ghatshila, Jharkhand, India e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 L. Ghosh and A. B. R. Chaudhury (eds.), India’s Relations with Neighboring South and South East Asian Countries, Dynamics of Asian Development, https://doi.org/10.1007/978-981-99-4610-5_2

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Asia from the historical past to the era of colonial rule. It discusses continental and maritime contacts between India and her South East Asian neighbours, keeping in mind the multiple dimensions of India’s age-old cultural linkages with these countries, extending up to 1947. The present paper will discuss three components of past relations: the component of different dynastic spillovers from India to South East Asia, the components of communities, or rather community-oriented interactions in past either from India to South East Asia and vice versa, and finally, the components of cultural impact of India on South East Asia and also South East Asia on India. Thus, the chapter discusses the instances of past relations where a clear picture of people-to-people connections can be demonstrated. Keeping a view of the past in perspective, it explores the possibilities of application of soft power in the India-South East Asia relations.

India and South East Asia in Ancient Past South East Asia had come into the sphere of Indian cultural influence as early as 290 BCE. This continued to the fifteenth century CE when Buddhist influence became incorporated within the existing Hindu influence. The admixture of Hindu-Buddhist culture was reflected in the local political systems. Hindu-Buddhist “Mandala” (polities, city-states and confederacies) became the Indianized version of South East Asian politics. In the opinion of historian P.P. Mishra, trade, cultural and political relations were established between the kingdoms on the southeastern coast of the Indian subcontinent and South East Asian countries like Burma, Thailand, Indonesia, the Malay Peninsula, the Philippines, Cambodia and Champa. Mishra further asserts that as a result South East Asian countries were increasingly subject to Indianization and Sanskritization, and this early interaction triggered concrete relations with many South East Asian countries (Mishra, 2021: 1).

Routes Indian merchants were attracted to South East Asia, particularly for its many opportunities in trading. South East Asia was variously called by them as Swarnabhumi or land of gold, Tokola or land of cardamoms or Narikeldeep, land of coconuts (Sengupta, 2017: 3). It is pertinent at this juncture to discuss which regions of India’s coast had connections with South East Asia. Also, discussions on dynastic chronological interactions are interesting. In an article in The Hindu, M. Srinivasan contends that in Java and Borneo, the introduction of Indian culture created a demand for aromatics, and trading posts here later served Chinese and Arab markets. Srinivasan cites the Periplus Maris Erythraei, which refers to several Indian ports from where large ships sailed in an easterly direction to Chryse. According to him, products from the Maluku Islands that were shipped across the ports of Arabia to the Near

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East passed through the ports of India and Sri Lanka and sometimes onwards to East Africa, where they were used for a variety of purposes including burial rites (Srinivasan, 2021: 2). To Jayshree Sengupta, for overland travel between India and South East Asia, two routes were followed: “one through land via Bengal, Assam, Manipur and Burma to reach different parts of South East Asia. The other route was the maritime route from Coromandel coast or the coast of Bay of Bengal to Cape Comorin and via Malacca strait to reach the Malay Peninsula” (Sengupta, 2017: 3). Sengupta further stresses, There was much demand for Indian goods and trade between India and South East Asia which was seen as a land of spices and rice growing fertile lands, flourished. Funan in the Mekong Delta in Vietnam was the first trading post of Indian traders. Traders took residence there and from there spread to other countries of the region. (Sengupta, 2017: 3)

Dynastic Spillover of Indian Culture to South East Asia The principal catalyst for the Indianization of South East Asia was Indian maritime trade, especially the spice trade. Mahabharata first referred to Indian travel across sea although the fact was confirmed in writings of Megasthenes. During the Mauryan period, various maritime voyages in the Indian Ocean region were also undertaken (Coedès, 1975). Buddhism came to South East Asia from India in century BCE when Buddhist monks were sent by King Ashok. Tracing the maritime history of Orissa, P.K. Panda holds that the maritime history of Kalinga or modern Odisha on the eastern seacoast of India dates to 350 BC. Panda says, “The people of this region sailed up and down the Indian coast and travelled to Indo-China and throughout Maritime South East Asia”. In the process, “they introduced elements of their culture to the people with whom they traded” (Panda, 2017). In the sixth-century text Manjusrimulakalpa, the Bay of Bengal is called Kaligodra. and historically also, the Bay has been called Kalinga Sagara (both Kalingodra and Kalinga Sagara mean Kalinga Sea). This indicates the importance of Kalinga in the maritime trade. As Panda acknowledges, “The old traditions are still celebrated in the annual Bali Jatra, or Boita Bandana festival held for five days in October/November” (Panda, 2017). The Chola dynasty (200–1279) reached the pinnacle of influence and power during the mediaeval period, especially under Rajaraja Chola I (reigned 985–1014) and Rajendra Chola I (reigned 1012–1044), who vastly extended the borders of the kingdom. Tracing the genealogy of the Chola Empire, Kallie Szczepanski notes that at its peak, the Chola Empire extended from the island of Sri Lanka in the south to the Godavari basin in the north. The kingdoms along the east coast of India up to the river Ganges recognized Chola suzerainty. Its navy invaded and conquered Srivijaya, the largest empire in Maritime South East Asia. With greater distribution of Indian goods and dissemination of ideas, the process of “Indianization” was extended over a wider world from this period (Szczepanski, 2019).

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Tracing the cultural routes between India and South East Asia, Jayshree Sengupta has commented that during Gupta period India was a rich land and “people possessed great skills at weaving textiles, crafting gold jewellery, metal, sculpture and beautiful objects” (Sengupta, 2017). The moral and ethical teachings of Buddhism became an attractive alternative to previous religious practices. Sengupta further notes the important role played by merchants in spreading of religion, particularly Buddhism, in South East Asia. They supported Buddhist monasteries along the Silk Road; in return, they were given a place to stay in the monasteries as they travelled from city to city. Merchants also spread Buddhism to foreign lands as they travelled by sea. They helped to establish diasporas within the communities they come across. Over time, the culture of these communities came to be based on Buddhism. As a result, they became centres of literacy and culture with well-organized marketplaces, lodgings and storage. However, the rise of Islam in Central Asia around the seventh century marked the end of the era of transmission of Buddhism through the Silk Road (Sengupta, 2017: 4).

Indian Communities in South East Asia The dominating influence of Southern Indian traders, adventurers, teachers and priests continued in South East Asia until about 1500 CE. Both Hinduism and Buddhism spread to these states from India, and for many centuries, they continued to be practised there with mutual tolerance, though eventually, the states of the mainland mainly became Buddhist. According to Sengupta, Hindu priests and Buddhist monks accompanied mercantile class and assumed a leading role in spreading the message of Indian thought and culture to the entire South East Asian region. Since they had no political ambitions and were living in hermitages and ashrams, the local people welcomed them. Thus merchants, monks and Hindu Brahmin priests travelled to faraway kingdoms like Cambodia and Indonesia in large numbers and India’s culture, religion and civilisation spread to different parts of South East Asia. The kings of the region wore Indian made silk and brocade textiles during ceremonious occasions and donned jewels imported from India. Printed and woven textiles were eagerly sought after by the common people. (Sengupta, 2017: 4)

In the early common era, Hindu and Buddhist religious establishments of South East Asia became associated with economic activity and local economy by estate management, craftsmanship and promotion of trading and commerce. Large funds were donated by benefactors, which were to be used later for the benefit of the local economy. Buddhism travelled alongside the maritime trade, promoting coinage, art and literacy. It may not be out of place to mention that historians are divided among themselves on name of the community who brought Indian civilization to South East Asia. Theories abound about how Indian influence spread throughout South East Asia. Each theory puts forward a specific caste carrying Indian civilization to South East Asia. The Brahmana theory propounds that the Brahmins reached South East Asia mostly

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under local royal patronage and they carried forward the literary tradition of Indian culture. The Kshatriya theory states that Indian warriors influenced and conquered parts of South East Asia. The Vaishya theory, which seems more plausible of the two, on the other hand, attributes the spread of Indian culture to traders. However, this theory does not explain satisfactorily the use of the large number of Sanskrit words in South East Asian languages, which perhaps supports to the first theory. It is more probable that Indian traditions were carried to South East Asia through trade. The rich resources of South East Asia, especially its gold, were desired in the Indian subcontinent. The Kshatriya theory discusses the process of state formation in South East Asia, and its argument that the warriors wanted to capture the region is perhaps partially true. Actually, all classes of people of South East Asia became Indianized to some extent. Brahmins influenced the South East Asian society in the field of knowledge building, religion and philosophy. South East Asia adopted the regulations that were influenced by Indian laws and philosophy. Przyluski Lévi and Jules Bloch among others point to the similarities between indigenous cultures of South East Asia and Indian culture. They point to the earlier South East Asian (specifically Austroasiatic, such as early Munda and Mon Khmer groups), as well as later Himalayan (Tibetic) cultural and linguistic influence on various Indian groups. In their analysis, this accelerated the process of acceptance of Indian culture and religious traditions in South East Asia. Indian cultural system was later espoused and integrated into the indigenous social construct and statehood of South East Asian regional polity, with which rulers gained power and stability, transforming small chieftains into regional powers (Levi et al., 1993: 67).

Component of Indian Culture in South East Asia Sengupta (2017) points to the many symbolic relics of India’s influence, clearly visible in art, culture and civilization, especially in Cambodia, Thailand and Indonesia or Burma today. The temples of Angkor Wat, Pagan, Borobudur and Prambanan are enduring testimonies to the impact of Indian art and architectural forms on South East Asian monuments. However, those stimuli and observances were accepted in South East Asia that resonated with their local cultures. Thus, we can identify the quality of adoption of external cultures by the South East Asians. In most of South East Asia, Indian culture became associated with either Chinese or local culture, and instead of assimilation, we can see the spirit of association and coexistence of two cultures peacefully one next to the other. The Indian epic Ramayana was adopted by almost the whole of South East Asia because of the ease with which it can be retold, understood, modified and applied to contemporary culture. In her analysis of the influence of Indian culture on South East Asia, Sengupta holds that one of the most popular and effective ways of propagating Indian culture in South East Asia was through popularizing Indian literary works.

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Folklore singers and artistes played a very important role here by modifying these literary works to meet local palettes. Through retelling of the stories from generation to generation, the great epics of Ramayana and Mahabharata could be edited and retold to attract bigger and bigger audiences. The artistes who popularised these were called ‘dalangs’ and contributed to the process of adaptation of these epic works originating outside their country by adding or changing them to make them more contextual and localised. (Sengupta, 2017: 4)

Some of the greatest literary texts of South East Asia like Hikayat Seri Rama (Malaysian adaptation of Ramayana) and RamKer (Ramayana Khmer/Cambodian) in Cambodia, Phra Lak Phra Ram (Laos), Yama Zatdawor Yamayana (Myanmar) Ramakien (Thailand) and Kakawin Ramayana (Indonesia), Darangen, Singkil (Mindanao, Philippines) were adapted from the Ramayana and written in this way (Eastern Art Online, 2022). Similar influence of Indian art can also be found in the sculptures and motifs. Local designs were combined with original Indian styles to create masterpieces in a typically stylized South East Asian art form. Though the Cambodian (Khmer) sculpture of the eighth to thirteenth centuries was thought to have been fashioned after Gupta period images, they are very different in appearance and form. These beautifully executed majestic figures of gods, goddesses, Buddha, Apsaras and demons have essentially South East Asian features. This Indian influence was evident also in South East Asian dance forms. Both Marwah (2020) and Sengupta (2017) assert that though India’s civilization and culture spread to many parts of the world through trade, it struck firm roots in South East Asia. Marwa argues: Yet these cultural conquests were peaceful. There was no evidence of violence, colonisation and subjugation and there was no extensive migration from India to the countries of South East Asia. The Indians who went there did not go to rule nor had any interest in controlling from a far. (Marwah, 2020)

As greater collaboration with Indians settled in the courts of South East Asia took place, Indian religion, political thought, literature, mythology, artistic motifs and style were imbibed more deeply into the local culture. Sengupta mentions the existence of a great maritime empire based in the Indonesian islands of Java and Sumatra in the mediaeval times, from the sixth to the fourteenth century. “Many Indian artisans came to work temporarily in the courts and were from Kalinga (modern-day Orissa). They helped in building great temples and monuments. Many of the motifs on the walls of Borobudur and Angkor Wat resemble carvings of Konarak and other mediaeval temples of eastern India” (Sengupta, 2017: 4). In the opinion of Wangchuk (2021), Brahmins were not only experts in performing religious rites and knowledgeable about astrology, but they were also well-versed in matters of statecraft, art and architecture. They were invited by rulers to serve as advisors, administrators and priests. Moreover, their knowledge of Sanskrit was phenomenal. It has been claimed that Sanskrit script was the first form of writing known to have reached South East Asia (Sengupta, 2017). Similar alphabets were adopted and used today in Burmese, Thai, Laos and Cambodian languages. A large number of ancient Sanskrit inscriptions have been discovered. These mention the use

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of Indian framework of code of law. In all legal aspects of court procedures, Sanskrit terminology was accepted. Vernacular was only used to describe the factual aspects. According to Sengupta, Codes of law and public administration especially the concept of ‘God King’ was adopted by many kings of South East Asia. They considered themselves to be incarnation or a descendant of one of the Hindu deities. Later when Buddhism came, this view was modified. The kings of Cambodia, Jayavarman VII (the founder of Angkor) and his successors were addressed by the people as king of the mountain and they built their palaces and temples on hill peaks (Bayon temples). (Sengupta, 2017: 4)

Indian food and flavours also found their way into South East Asian cuisine. The people of South East Asia have similar food habits as that of people of eastern India. The staple of the people of both these places is rice and curry, which are made with many common ingredients. Also, there are many spices used in common by both the peoples. Indian herbal medicines also reached South East Asia from ancient times and are used even today in many countries (Sengupta, 2017: 5). In this context, it is worth mentioning what Jayati Bhattacharya argues. Bhattacharya writes, Textiles formed a strong connection between India and South East Asia. Though Indonesia had an age-old tradition of local weaving for more than 4000 years, Indian textiles were highly acclaimed and continued to be imported through different periods in history, not only as clothing or gifts and rituals in various ceremonies, but also as textiles used to decorate images in temples and ceilings, or in manuscript covers. The popular textile imports from India comprised of the double-ikat silk patola, a unique pattern of woven fabric and block-printed cotton textiles. (Bhattacharya, 2020, 5)

Archaeological evidences abound of these exchanges through different periods of history suggesting the existence of dynamic trade by land and sea throughout South East, South, East Asia and other regions carried out by pioneering and ingenious merchants and entrepreneurs. For example, the Java inscriptions (ninth–tenth century), excavations at burial sites at Ban do Ta Phet in Thailand and Pontanoabangka in Sulawesi (circa 500 CE)—one of the main islands in the Indonesian archipelago—or the distinctive architectural style of the Pagan temples in Myanmar (eleventh and twelfth century). Bhattacharya also cites some fifteenth-century sources that point to the significant role played by two South India-based textile merchant communities, the Chulias (Tamil Muslim merchants) and the Kelings/ Klings (Chetti, Tamil, Telegu, Kannada Hindu merchants) in Melaka (in modern Malaysia). Other groups of textile traders from Gujarat in Western India settled in the Malay Peninsula and north Sumatra (Indonesia). Bhattacharya also notes that textiles and “Indianized” pottery, both imported and domestically produced, point to the role of both artisans and technology exchanges from India to South East Asia (Bhattacharya, 2020: 3–4). The overall analysis of this section of India’s past cultural interactions with South East Asia confirms several tenets of syncretic culture. Jayshree Sengupta puts in succinctly, “South East Asia absorbed and retained its past Indian influence in a very distinctive manner over the centuries and today it has melded into the South East Asian culture”. She continues,

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L. Ghosh India shares a unique connection with South East Asia that has been shaped and reshaped by numerous historical developments. Adherents of religions like Hinduism, Buddhism, and Islam made their way to South East Asia via a variety of sea and land routes through South Asia, causing an integration of the belief systems in the region with indigenous flavors and distinction. Indonesia, for example, has emerged as the country with the largest Muslim population in the world yet, Garuda, the legendary bird in Hindu and Buddhist mythological traditions, is the national emblem of the country. In addition to the popular Garuda airlines, Indonesia’s prime airline carrier, Garuda is represented in an impressive ornate statue in the Prambanan Temple, and also made its way into the wayang, or the traditional puppet culture of Java. The Garuda makes its pervasive presence felt in Thailand as well, a predominantly Buddhist country, where it is more mythically represented with a human torso and red feathers. These kind of cultural representations and connections continue in the Suvarnabhumi airport at Bangkok, capital of Thailand, where the international travelers are greeted with an impressive mythical exhibit of the Samudra manthan (churning of the ocean) that is directly influenced by hindu mythological beliefs. A similar depiction of the Samudra manthan can be viewed in the walls of the temples at Angkor Wat dedicated to Lord Vishnu, one of the famous World heritage sites in what is today, Cambodia. The localization of Indian influences can also be seen in the various adaptations of the Indian epics, Ramayana and Mahabharata in temple performances, enactments in theater shows or in wayang puppetry. (Bhattacharya, 2020: 2)

From the aforementioned examples, it shows beyond doubt that in India’s interactions with ancient South East Asia, people-to-people interactions were an ancient phenomenon which in turn opened new routes of infiltrations for colonial rulers. The following section investigates the details.

India and South East Asia During the Era of Colonialism The period of colonial expansion in most of South and South East Asia created a kind of resurgence in age-old connectivities. Burma, Malaysia and Singapore came under British colonialism while France dominated Indochina, the Dutch ruled Indonesia, Spain colonized the Philippines and Thailand was the only South East Asian country which was never colonized but was under strong Western influences. Under colonial rule, labour-intensive plantation economy was introduced, agriculture was commercialized, and connections between Western and Asian markets were established. This labour-intensive economy resulted in migration of large-scale population as labourers from India to South East Asia. Also, middle-class Western-educated people went to South East Asia to help the colonial rulers in their administrative mechanism. They served as an appendage to colonial administration. This newly migrant communities in later period of time in history developed a new Indian diaspora in South East Asia. In Jayati Bhattacharya’s estimate, between 1840 and 1940, about 8 million people travelled from India to Ceylon (now Sri Lanka), and about 4 million to Malaya and 12–15 million to Burma, with approximately half of them returning within three to seven years (Bhattacharya, 2020: 4–5). It was during this time that Tagore began to speak of Asianism as a positive and concrete concept. He promoted idea of Asian humanism. In the first public meeting

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in Beijing, he talked about Asian Unity. He stressed on the importance of India as a vital clog of pan-Asianism and the universality of her material and cultural heritage. In his speeches in Burma, Malaya, Singapore, China and Japan, and as well as the west, Tagore advocated ideas of freedom, fraternity and universalism that rose above all man-made boundaries. In her introduction to Tagore’s travels to South East Asia and its impact, Lipi Ghosh draws the reader’s attention to Tagore’s fascination for notions of nationalism, pan-Asianism and cosmopolitanism/universalism, which taken together may be termed as “multitier Tagorism” (Ghosh, 2016: 2–3). These ideals formed the basis of Viswabharati, the university he set up at Santiniketan where world met with multiple cultures. Okakura Tenshin, Sylvan Levi, who were invited to Visvavarati, focused on India’s pivotal role in spreading the legacy of peaceful international approach (Ganguly, 2016: 35). Other manifestations of India-South East Asia cultural relations were Greater India Society, Mahabodhi Society, Theosophical Society and Thai Bharat Cultural Lodge. Tracing the roots of the theosophist movement in India, Bhattacharya (2019) notes By the early decades of the twentieth century, the theosophist movement in the Buddhist revival led to close interactions with Madras and the establishment of the Buddhist Theosophical society in Colombo in what is today, Sri Lanka. Later, it was further consolidated in a more transnational Buddhist identity by Dharmapala, whose Mahabodhi society was established in Madras, Rangoon (Yangon), and Calcutta, among other places. (Bhattacharya, 2020: 5)

Greater India Society was established on 14 October 1926 under the patronage of a Calcutta based group of eminent scholars like Kalidas Nag, Prabodh Chandra Bagchi, Ramesh Chandra Majumdar, B.R.Chatterjee, Himanshu Bhusan Sarkar, Nilakanta Sastri, B.C. Chhabra, etc. This event was fuelled by the nascent nationalist feeling of the twentieth century which emphasized that India not only excelled in various aspects within her geographical limits but also extended her civilizing influences towards the fat of lands like South East Asian countries. This nationalist approach also carried with it the message that India’s peaceful interactions with her neighbouring countries and consequent cultural colonization of the indigenous people where her influence reached and was welcomed by the locals were much more humane and morale than the imperialist and aggressive approach of the Western nations towards the colonizing process (Ganguly, 2016: 34). Relations were, however, not restricted to cultural relations. Political relations too developed. The era of Tagorean Asianism gave way to Pan Asianism of Japan and India’s response to the ideology under Subhas Chandra Bose and Rashbehari Bose. Western historian terms this phase as that of Japanese imperialism, and following that legacy, many Indians too prefer to call it Japanese incursion. Unfortunately, it is misinterpretation of history as the true sense of Asian Unity was well understood by Subhas Chandra Bose, the great Indian freedom fighters along with his other Asian counterparts like Aung San of Burma, Phibulsongkram of Thailand and other Asian leaders. Indian army assisted Japanese in its pan Asian endeavours, and it created a new phase of India-South East Asia interactions. Subhas Chandra Bose, the Indian freedom fighter, having established his base in Thailand and Singapore and people

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of different sections of society, in the Malayan peninsula, Thailand and Burma, were affectionate towards him and his struggle (Ghosh, 2009, 154–179; Stockwell, 1999: 465–489). In the post-colonial era, after the end of the Second World War, some major aspects of the Indian foreign policy with its twists and turns determined the relations between India and different South East Asian countries till 1962. India’s policy on South East Asia was only an aspect of her overall own foreign policy and it was operated within the context of her policy towards and relations with the big powers. Again, it was only through her role in the Asian international affairs that India could influence the polices of the big powers towards her. India’s ability to play a major role in the international affairs depended on how she could influence the political development of South East Asia, the violent storm centre of big power rivalry and on how far India could maintain closer relations with South East Asian countries. Prime Minister Nehru’s concern for closer Indo-South East Asia relations was known even before the transfer of power in India. But it seemed that while seeking such relations he was always desirous of having a leading position for India in the affairs of that region. India does not belong to South East Asia, yet Nehru wanted to include the countries of the region in a grouping in which India might have a dominant role. The first major manifestation of India’s involvement in South East Asia affairs in the post-1947 period was India’s convening the 18 nations Asian Conference on Indonesia in January 1949. In his Presidential address at that Conference on 20 January, Nehru said: We meet today because the freedom of a sister country of ours has been imperiled and a dying colonialism of the past has raised its head again and challenged all the forces that are struggling to build up a new structure of the world. That challenge has a deeper significance than that may appear on the surface, for it is a challenge to a newly awakened Asia, which has so long suffered under various forms of colonialism. (Nehru, 1961: 407–408)

The next landmark in India-South East Asia relation is the Asian-African Bandung Conference in 1955, where both India and Indonesia put emphasis on the resurgence of Asian nationalism. Though there were differences between the two countries on the question of colonialism, both demanded that Asian nations be given their due place in world affairs. The Bandung Conference was of invaluable importance both for India and Indonesia. For India, it was important because it provided Nehru with the best opportunity to uphold non-alignment as a positive factor in the international politics. As for Indonesia, the very fact that a conference of Asian-African nations had been held at Bandung added much to the political image of Indonesia and its President, Soekarno (Patel, 2021: 202–203).

Conclusion To sum up, India’s relations with the South East Asian countries till 1962 could not be more than formal for more reasons than one. India herself was handicapped by her own political and economic limitations. She was not economically strong enough to

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provide them with their urgently needed economic aid for their development. Neither was she militarily able to assure them of her support in need. India herself was looked upon by the smaller South East Asian states as one that had perfected a system of extracting foreign aid. Politically, her passive non-alignment, initially marked by proWest bias, made the radical anti-imperialist people of the South East Asian countries think of India as an ally of the west in disguise. Thus, the good relations which India had till late fifties, with countries like Indonesia, North Vietnam and Cambodia, could not last long. With the passage of time and under prevailing objective conditions, those countries hardened their anti-imperialist and particularly anti-US policies, and Indian non-alignment turned out to be more and more reformist. Thus, the important tenet of India’s past interaction with South East Asia was the essence of culture, whether political or economic or social. India-South East Asian interactions produced a phenomenon of culture of association. South East Asia accepted the best of India and rejected the adverse elements. These past cultural relations can play a constructive role in today’s India-South East Asian interactions for soft power diplomacy in our Act East Policy. Taking instances from past, more constructive people-to-people interaction is possible, and this can open up more constructive panorama of future integration.

References Bhattacharya, J. (2019). Connectivity across the Colonial Bay of Bengal in the 19th and 20th centuries. In D. Ludden (Ed.), Oxford research encyclopedia of Asian history. Oxford University Press. oxfordre.com/asianhistory. Accessed on April 5, 2023. Bhattacharya, J. (2020). Ties that bind: India and Southeast Asia connectivities. In Education about Asia (Vol. 25, No.3, pp. 3–4). Online Archives: Teaching Asia’s Giants: Association for Asian Studies. https://www.asianstudies.org/publications/eaa/archives/ties-that-bind-indiaand-southeast-asia-connectivities. Accessed on April 5, 2023 Coedès. G. (1975). In W. F. Vella (Ed.) & S. B. Cowing (trans.) The Indianized state of Southeast Asia. Australian National University Press. https://openresearch-repository.anu.edu.au/bit stream/1885/115019/2/b11055005.pdf. Accessed on August 7, 2022. Eastern Art Online. (2022). Indian ocean textile trade: India to South East Asia. http://jameelcen tre.ashmolean.org/collection/7/10236/10334. Accessed on August 10, 2022. Ganguly, D. (2016). Situating South-East Asia in the articles of the first five years of the Journal of Greater India Society (1934–1939): A historiographical approach. Perspective Asia Pacific. IAAPS Kolkata. Ghosh, L. (Ed.). (2009). Connectivity and beyond: Indo-Thai relations through ages. Asiatic Society. Ghosh, L. (Ed.). (2016). Rabindranath Tagore in South East Asia: Culture, connectivity and bridge making. Primus. Nehru, J. (1961). Indian foreign policy. Selected speeches, September 1946-April 1961 (pp. 407– 408). The Publications Division, Ministry of Information and Broadcasting, Government of India. Levi, S., Przyluski, J., & Bloch, J. (1993). Pre-Aryan and Pre-Dravidian in India (1929). Reprint. Asian Educational Services. Marwah, R. (2020). South East Asia: An Indian imprint. Vide https://journals.sagepub.com/doi/abs/ 10.1177/26316846211029387?journalCode=ecia. Accessed on April 5, 2023.

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Mishra, P. P. (2021). India’s historical impact with Southeast Asia. Education About Asia, 26(1), 1–7. https://www.asianstudies.org/publications/eaa/archives/indias-historical-imp act-on-southeast-asia. Accessed on August 6, 2022. Panda, P. K. (2017, November 1). Revisiting glorious maritime trade history of Odisha. https:// medium.com/@pradeepkumarpanda/revisiting-glorious-maritime-trade-history-of-odisha. Accessed on August 7, 2022. Patel, A. (2021, September 11). Those were the days: The Periplus Maris Erythraei is a credible account of ancient India. The Hindu. Resources for K12 Education. (n.d.). The Ramayanas of South East Asia. Henry M. Jackson School of International Studies, The University of Washington. Sengupta, J. (2017, August 30). India’s cultural and civilisational influence on Southeast Asia. Raisina debates. Observer Research Foundation. https://www.orfonline.org/expert-speak/ind ias-cultural-and-civilizational-influence-on-southeast-asia/. Accessed on April 5, 2023. Srinivasan, M. (2021, October 21). Explained: The Adani Group’s recent port deal in Sri Lanka. The Hindu. Vide https://www.thehindu.com/news/national/explained-the-adani-groups-recentport-deal-in-sri-lanka/article36825539.ece. Accessed on April 5, 2023. Stockwell, A. J. (1999). Imperialism and nationalism in South East Asia. In J. Brown (Ed.), The Oxford history of the British Empire. The twentieth century (Vol. 4, pp. 465–489). Oxford University Press. Szczepanski, K. (2019, July 3). History of India’s Chola Empire. https://www.thoughtco.com/thechola-empire-195485. Accessed on April 5, 2023. Wangchuk, P. P. (2021, November 18). India’s crucial role in South East Asian countries. SPMRF Podcast. https://www.spmrf.org/indias-crucial-role-in-south-east-asian-countries/. Accessed on April 5, 2023

Chapter 3

The “Look East Policy” of Bangladesh: An Opportunity for Building Complementary and Shared Development for Eastern South Asia Ashish Banik

Abstract What explains the linkage between Bangladesh’s “Look East Policy” and the country’s balancing foreign policy adjustments with two emerging geostrategic initiatives: the Belt and Road Initiative (BRI) and the Indo-Pacific Strategy (IPS)? This chapter answers this question by analysing Bangladesh’s proactive role in regional arrangements offered by two major powers, the United States and China. Looking at the geolocation of Bangladesh as a littoral nation, it is a highly strategic and rising economic power in South Asia. This study details the nation’s strategy for ensuring its presence in all regional and subregional arrangements and global initiatives with a view to facilitating shared prosperity, vision and development for eastern South Asia. The study therefore looks into Bangladesh’s firm positioning towards furthering a complementary, fair and balanced relationship through meaningful participation and engagement in the regional and global initiatives, which is crucial to bring about peace, security and development for all the countries in the Indo-Pacific and Southeastern Asia. While scrutinizing these dimensions of international relations, the study also touches upon its possible implications upon the contemporary geopolitics of the Indo-Pacific region. To attain its objective and to illustrate its key arguments, this study employs a qualitative method of social science research and generates its data from secondary sources. Keywords BRI · FIOP · ASEAN · ASEAN regional forum · Look East · Act East · BBIN · BIMSTEC

A. Banik (B) Bangladesh Enterprise Institute, Dhaka, Bangladesh e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 L. Ghosh and A. B. R. Chaudhury (eds.), India’s Relations with Neighboring South and South East Asian Countries, Dynamics of Asian Development, https://doi.org/10.1007/978-981-99-4610-5_3

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Introduction Bangladesh is considered as one of the vital littoral countries for expanding business, connectivity and trade due to its geopolitical location in the Indo-Pacific region. In an era of great power competition in the Indian Ocean, “littoral countries” matter significantly. As such, Bangladesh as a major littoral country in the Indo-Pacific region, with stronger bilateral relations with its neighbouring eastern region, the ASEAN nations and the region beyond would greatly serve the interests of neighbours and all extra-regional big powers including China and the United States. Closer ties with Bangladesh would further enhance the opportunities to sustain a free and open Indo-Pacific, and China’s BRI. BRI is a strategic initiative undertaken by the People’s Republic of China to connect Asia with Africa and Europe via land and maritime networks with an aim of improving regional integration, increasing trade and stimulating economic growth (European Bank for Reconstruction and Development, 2021). Likewise, devising the Indo-Pacific Strategy (IPS), the United States has increasingly been shifting its strategic focus from the Northern Pacific to the Indo-Pacific. As a result, the countries in South and South East Asia have regained their long-neglected geopolitical status and the littoral states have achieved their greater geopolitical significance. The largest and arguably most important of the group, however, lies to the east: Bangladesh. BRI, led by the Chinese and the Indo-Pacific Initiatives led by the United States and its allies are two major geostrategic endeavours where Bangladesh’s location in the Bay of Bengal (BoB) occupies the central attention in the Indo-Pacific region. It is for this reason that the major regional and global powers have been trying to build up strategic alliance with littoral states like Bangladesh to expand their sphere of influence. According to them, the country’s location in the Bay of Bengal offers a crucial gateway to the Indo-Pacific region, but it also inevitably offers opportunities for the promotion of connectivity and linkages between South Asia, South East Asia, and the Far East in order to increase trade, commerce, and growth on a regional and global scale. As the conditions of geopolitics have been undergoing a massive transformation along with the interests and priorities of the global powers, both BRI and Indo-Pacific have been offering opportunities as well as challenges. A developing nation like Bangladesh, with its unique geostrategic location, has to be careful before engaging with any initiatives so that the country does not become the victim of any global power rivalries or succumb to any geostrategic competition. Both BRI and the Indo-Pacific are global strategies in nature where the IndoPacific region, particularly the area of BoB has gained paramount strategic interest. These initiatives are mainly focused on promoting geostrategic interests where business, trade and connectivity are a means to exert influence and power. This changing scenario has pushed Bangladesh not only into a fast-rising developing nation but into a new geopolitical threshold with challenging circumstances. In response, Bangladesh has devised a complementary but selective approach towards both the initiatives. This means that the country wants to be in both initiatives to such an extent which suits its own interest. In a desperate effort, Bangladesh has been searching commonalities

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in these initiatives and trying to leverage on them to develop a shared understanding and cultivate benefits for all parties. Converting this desire into a reality may not be an easy task. Bangladesh has so far taken a conscious decision not to engage with any military or political alliances/initiatives and instead expressed willingness to engage both the initiatives BRI and Indo-Pacific to facilitate its own economic development. In fact, the socio-economic and geopolitical compulsions have forced the country to develop and follow this approach. The sustainability of this, however, is conditioned on which direction the country steers its foreign policy in near future and in which the politics in the Indo-Pacific may take a shape corresponding to the position of the regional and global powers. This article will be composed of four sections. The first section will provide an overview of the Bangladesh’s engagement with the regional and global initiatives corresponding to its Look East Policy. The second section will concentrate on the recent initiatives of the larger global engagement—BRI and Indo-Pacific— and its implications on the geostrategic relations in the Bay of Bengal. The third section will assess the opportunities and strength of Bangladesh to create a complimentary approach in the context of BRI and Indo-Pacific through its Look East Policy. The final section will conclude by examining the direction the foreign policy of Bangladesh might take in the near future. This study has relied upon secondary sources, mostly on published materials, and employed the political economic approach while analysing the subject matters and framing arguments.

Bangladesh’s Look East Policy and Its Approach Towards Regional, and Subregional and Global Initiatives The foreign policy orientation of Bangladesh remains positive towards any initiatives relating to the development of any regional and subregional initiatives and has extended continuous efforts to support engagements to enhance connectivity (Banik, 2021: 60–69). In the mid-eighties, Bangladesh played a significant role in the formation of SAARC but this association failed to bring any major breakthrough for the promotion of regional connectivity and boosting intraregional trade as the organization became hostage to regional rivalry, negative attitude and trust deficits among the major players (Chakma, 2020). Realizing that the deadlock in SAARC was detrimental to forward any major agenda of regional integration and connectivity, Bangladesh first became the 26th member of ASEAN Regional Forum (ARF) in 2006 and desperately tried to promote bilateral relationship with Myanmar to open the gate of South East Asia and Far East through the Look East Policy (LEP). LEP refers to the strategic foreign policy interests of Bangladesh which is designed to promote and cement relations with East and South East Asian countries in the Indo-Pacific region covering economic, socio-cultural, defence and security ties (Ahmed, 2014, November 13). In the year

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2002, Bangladesh has taken a significant step to diversify its economic opportunities with the countries of South East Asia and Far East. The tremendous economic growth that had occurred during the end of twentieth and early twenty-first century in this particular region has encouraged Bangladesh to engage with these countries by building a multilayered connection to attain common aspirations of socio-economic development of the people in this region (Das et al., 2016: 40–61). Bangladesh had been experiencing an impressive economic growth with an average of six and a half per cent in GDP before the emergence of pandemic in 2020. The country has become the world’s 30th largest economy with a GDP of over $409 billion and with a target of export amounting to over $50 billion in 2022. Forecasts of various international organizations suggest that the size of the economy could be doubled by 2030 if the country can manage the current momentum and continuously expand opportunities to its economy and market (Ahmed, 2021, December 12). Diversification of the export market is one of the major priorities of Bangladesh’s economy for the last decade both in terms of expanding the list of items and getting access to emerging markets. Currently, the US and EU markets account for 85% of all Bangladeshi exports, with the EU accounting for 53% and the US for 32%, respectively (Ahmed, 2021, December 12). There is a growing realization among the policymakers and business community that such a dependence on export on the EU and the US market make the overall economy of the country vulnerable to any disruptions, for whatever reasons, on exports to the market of these countries in the foreseeable future (Economist Intelligence, 2019). This growing concern and sensitivity are becoming relevant in the context of the outbreak of the pandemic which drives the country to renew its effort on leveraging existing linkages and connectivity in South and South East Asia to boost the regional market. It is this context, which makes LEP of Bangladesh more relevant for the geopolitical initiatives under discussion. Over the passage of time, many impediments emerged including the Rohingya refugee crisis that has hampered the development of the LEP. As the expansion of the LEP through Myanmar has not been possible since 2003 due to the Rohingya refugee crisis and other geopolitical compulsions, Bangladesh has been trying to expand this policy by connecting itself with other regional and global initiatives through BoB. In the case of regional and subregional initiatives, Bangladesh’s support towards BBIN and BIMSTEC is noteworthy, and it has been involved with all the joint initiatives to date designed under both with the hope to push its LEP for expanding the export market, diversifying export items and promoting domestic growth (Biswas, 2020: 52– 76). Despite several rounds of talks and conferences that had taken place in the last decade among the member countries, these subregional initiatives have contributed little to promote connectivity, trade and commerce among the member countries as they have yet to reach a consensus to sign any FTA (Biswas, 2020: 52–76). As the regional and subregional initiatives have failed to provide an inclusive platform due to a variety of reasons in South Asia, Bangladesh has felt the urgency to connect with current global initiatives like BRI and Indo-Pacific Strategy as these platforms are expected to serve Bangladesh’s interests better than the available regional and subregional arrangements (Plagemann et al., 2021: 2265–2281).

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With a hope to maintain the current impressive economic development, Bangladesh has started engaging with BRI since 2016, after the landmark visit of President Xi Jinping to Bangladesh, and allowing funding in major infrastructure projects to strengthen connectivity within the country and facilitate the same process throughout the region. As a result, China has elevated itself as the largest trading partner of Bangladesh and Bangladesh has become the second-largest recipient of Chinese loans and grants under BRI among the countries in South Asia (Das, 2022, March 19). For strengthening economic infrastructure and growth, during the visit of the Chinese president to Bangladesh in October 2016, Bangladesh reached an understanding for the implementation of various government-to-government (G2G) and business-to-business (B2B) projects. In total, China promised about $40 billion in investment in Bangladesh equivalent to the amount of $24.45 billion as bilateral assistance for infrastructure projects and $13.6 billion in joint ventures. In addition, $20 billion in loan agreements had been committed (Khatun & Sadat, 2020, November 19). Bangladesh is not yet part of the Indo-Pacific Economic Framework (IPEF) recently announced by the US President in Tokyo, comprising thirteen countries to foster collaboration in four areas: the digital economy, supply chains, clean energy infrastructure and anti-corruption measures among the member states (France 24, 2022, May 23). However, it is possible that opportunities might emerge for Bangladesh to join this initiative in near future.

BRI and Indo-Pacific and Its Implications on the Geostrategic Relations in the Bay of Bengal (BoB) The BoB is not simply the connector of two very important geopolitical landscapes, SAARC and ASEAN, but the container of key international sea lanes and transit zones which are basically vital for maintaining international trade and commerce characterized as the fuel of the industrial growth of the world economy (Dutta 2021, May 12). This part of the Indian Ocean has emerged as a critical point for commercial shipping because approximately half of the world’s container traffic passes through this region, and the BoB ports handle approximately 33 per cent of world trade, which has therefore been branded as the “economic highway of the world” (The Daily Star, 2020, October 14). The BoB, therefore, has been witnessing a sharp geopolitical competition as the regional and the extra-regional powers are bent on maintaining their supply chain and business. For instance, not only China and India are heavily relying on oil and gas imports through the BoB, but Japan and Korea are also highly dependent on energy imports, particularly oil and gas—and their reliance will continue to the rise in the near future (Anwar, 2022). As a result, all major powers, regional and extra-regional, are now moving forward with their geopolitical calculations and designs to ensure their respective dominance in this region. As a result, the littoral states in the BoB have started facing competitive interests and experiencing divergent perspectives which sometimes foster mutual tension and

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conflict, and if not managed, may be transformed into confrontation. For example, Indian sensitivity regarding the growing influence of China among the littoral states including Bangladesh; the concern of the Western states led by the US and Japan for securing the Free and Open Indo-Pacific (FOIP); and the rising bilateral tensions between Bangladesh and Myanmar on various issues including Rohingya influx have been triggering tensions. Consequentially, various multilateral and bilateral security arrangements like AUKUS and Quad have been formed and bilateral security pacts are being signed which are increasing the probability of transforming the Indo-Pacific region into a heavily militarized zone (Anwar, 2022). Bangladesh, as one of the littoral states in the BoB, has been facing pressure due to conflicting interests and divergent positions among the major and great powers in the Indian Ocean. Recently, China, under BRI initiative, invested heavily in the littoral countries across South Asia and ASEAN with the aim of increasing its sphere of influence and promoting its strategic objectives. China is desperate to open overland sea routes using various coastal zones in South Asia and Myanmar as 70–85% of its imported oil is currently passing through Malacca Strait (Paszak, 2021). Realizing the strategic vulnerability due to the reliance on a single sea route, China has heavily invested to exert its strategic presence in all littoral states across South Asia and ASEAN. Interestingly, this growing Chinese presence has the potential to drastically transform the political economy of the region by deepening economic interdependence. In response, the US is currently in high gear with its Indo-Pacific initiative which demands the Free and Open Indo-Pacific (FOIP). Though it is at the nascent stage but is certain to be expanded in coming years which will of course generate enormous pressure on the littoral states across South Asia and ASEAN, no doubt both Indo-Pacific and BRI are yet to evolve but it has already set the ground for intensifying rivalry competition among the states. Both initiatives will leave no stone unturned to keep the littoral states in their own strategic sphere which might of course shrink the space for the small littoral states to pursue an independent foreign policy and strategy. The current position of Bangladesh to only engage with these initiatives economically rather than militarily might come under stress in the face of enormous geopolitical pressure in future. Ironically, Bangladesh had been enjoying fairly robust ties with China and the US and did not face any complexity or major challenge in maintaining a balanced foreign policy until recently with both the countries. Both military and security cooperation has started since the inception of the country. China is the supplier of 74% of Bangladesh’s arms and Chinese warships, corvettes, patrol boats are regularly being purchased. Recently, a pair of Ming-class submarines have been purchased by Bangladesh (ORF, 2021). Since 2015, the United States has also provided $66.9 million in Foreign Military Financing (FMF) and $7.29 million in International Military Education and Training (IMET) assistance to Bangladesh under its BoB Initiative. The support was intended to enhance the capacity of civilian and military actors in Bangladesh to detect illicit activity within the borders and in the region, build networks and strengthen bilateral military cooperation for a rules-based order in the Indo-Pacific Ocean Region (US Department of State, 2022). Interestingly, the recent assertive actions carried out by the Chinese and their presence in the key strategic

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zones of South and South East Asia have contributed to the growing sensitivity of the United States and its allies. No doubt, Chinese influence is growing in Bangladesh as well as with its immediate eastern neighbours in South East Asia, but it is far from eclipsing the United States. The United States still holds the upper hand in technology, strategic solutions, military strength, diplomatic front, foreign aid, and is a formidable soft power. The current US administration has repeatedly vowed to intensify its focus on the Indo-Pacific region and revitalize the United States network of regional allies and partners in this region as the administration’s open recognition and declaration that what occurs in the Indo-Pacific region, shall shape the trajectory of the world in the twenty-first century (The White House, 2022). The signing of the AUKUS treaty, settling host arrangements for US forces in Japan and South Korea, reviving a Visiting Forces Agreement with the Philippines, joint military exercises with Bangladesh and pushing Bangladesh to sign two important military-to-military agreements, the ACSA and GSOMIA are some of the noteworthy initiatives for strengthening US position in the Indo-Pacific. Bangladesh needs to strengthen its capabilities to manage risks with China vis-àvis US. In the geopolitical and economic interest of Bangladesh, the country needs to effectively and tactfully engage with both these initiatives. Now, it is clear that to initiate a balancing foreign policy in the face of geopolitical competition would be a challenge. Bangladesh should honestly and seriously in due diligence, increase and strengthen its engagement with the neighbours and ASEAN nations to transform this competition into cooperation.

LEP of Bangladesh: Opportunities for Complementary Approach A divergent perspective exists between the major and great powers in the BRI and Indo-Pacific and the littoral states, like Bangladesh, concerning the security issues in the BoB. The major and great powers are mostly focusing on traditional security whereas Bangladesh is largely concerned with rising threats emanating from the non-traditional field like the sea level rise, degradation of climate change, piracy, human and arms trafficking, etc. The non-traditional security threats might pose greater threats than the traditional ones. Moreover, the country does not consider the BRI and the Indo-Pacific as divergent, opposite as well as a competitive approach. It rather looks at both the initiatives as an opportunity for advancing its Look East Policy to promote connectivity, trade and commerce with the ASEAN and other countries in eastern South Asia and the Far East. The country wants to build a sectoral partnership with both initiatives emphasizing issues of common interest, which are affecting the interests and security of all parties. It is also interested in building leverage on common factors rather than on divisive issues. Building on common issues following a complementary approach is the major priority of Bangladesh to

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promote its economic interest. Promotion of this approach in BoB through its LEP is not however easy for a littoral country like Bangladesh given the current geopolitical competition and great power rivalry. For doing so, Bangladesh’s proactive role in regional, subregional and extra-regional initiatives to foster connectivity, trade and commerce would be critical. Some very important but major steps need to be undertaken if the country wants to harness benefit from its Look East Policy in the context of BRI and Indo-Pacific. The effectiveness of Bangladesh’s complimentary but selective approach to creating shared opportunities would depend on how far the country can bring the necessary domestic reforms to comply with international norms, values and standards. It would also need to initiate the diversification of export items and markets, the digitalization of the economy across government and private sectors, the building of necessary infrastructures across the country and the region and finally, the creation of a conducive environment for foreign investment. This would pave the ground to strengthen its diplomatic position while dealing with the major and great powers and generating conditions of complementarity forwarding its Look East Policy.

Concluding Observations The linkage between Bangladesh’s “Look East Policy” and balancing foreign policy adjustments lies in its capacity to maintain strategic autonomy in the face of geopolitical competitions and rivalry. As the US is still the formidable Indo-Pacific power in the Asia–Pacific, and China is a great power and asserting its BRI in the same region, Bangladesh’s geopolitical position and its relationships with neighbouring countries and the countries in South East Asia have gained momentum. In that context, Bangladesh’s Look East Policy deserves more sustained attention from policymakers within itself, and the ASEAN states in conjunction with the United States, its East Asian allies and China. Nations in both the South and the South East Asian regions have a long history of important security and economic ties with the United States and China, and the region is of high strategic interest to both countries. In this context, as mentioned above, the United States views both regions as an important zone for its Indo-Pacific security network. Accordingly, the US has recently taken initiatives to engage with Bangladesh keeping the broader picture of Indo-Pacific in mind. The signing of a draft on promoting defence cooperation during the US. Under Secretary Victoria Nuland’s visit to Dhaka is a tangible reflection to move forward the bilateral relations in that direction. At the same time, Bangladesh has established a trustworthy relationship with China in terms of security and economic cooperation. As Bangladesh enjoys the fastest-growing middle class in the region, it can become an attractive place for both BRI and Indo-Pacific. Being the fulcrum of regional and subregional networks in eastern South Asia, Bangladesh has become the lynchpin between SAARC and ASEAN in the field of promoting trade and commerce which is considered vital for any global initiatives

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like Indo-Pacific or BRI. With an aim of generating shared opportunities and benefits, Bangladesh has already taken a few major steps to revive its Look East Policy. A deep seaport in Matarbari, Cox’s Bazar, is being built funded by Japan, which is slated to be completed by 2025, and setting up Special Economic Zones (SEZs) across the Coastal Zones, a tunnel under the river Karnaphuli in Chittagong and the expansion of Cox’s Bazar and Sylhet airports are few examples of many initiatives to change the regional economic trajectory.

References Ahmed, S. (2014, November 13). The ‘Look East’ policy of Bangladesh. The Daily Star. https:// www.thedailystar.net/the-look-east-policy-of-bangladesh-50030 Ahmed, Z. (2021, December 12). Bangladesh at 50: From ‘basket case’ to rising economic star. DW Akademie. https://www.dw.com/en/bangladesh-economy-50-years-on/a-57015896 Anwar, A.(2022). Positioning the Bay of Bengal in the great game of the Indo-Pacific fulcrum. Journal of Indo-Pacific Affairs, Air University Press. https://www.airuniversity.af.edu/JIPA/Dis play/Article/2980896/positioning-the-bay-of-bengal-in-the-great-game-of-the-indo-pacific-ful crum/#sdendnote34sym Banik, A. (2021). BIMSTEC and regional connectivity: Opportunities for Bangladesh. In R. Chatterji & A. Basu Ray Chaudhury (Ed.), Reimagining BIMSTEC strengthening regional solidarity across the Bay of Bengal (pp. 61–69). Observer Research Foundation. Biswas, N. R. (2020). Bangladesh beyond borders: Its trans-regional experience in BIMSTEC. National Security, 3(1), 52–76. Vivekananda International Foundation. Chakma, B. (2020). South Asian regionalism: The limits of cooperation. Bristol University Press. Das, R., Khaled, S., & Islam, M. (2016). Look east policy of Bangladesh: Evaluation, justification and strategy. The Durham University Journal, 3, 40–61. University of Durham. Das, T. (2022, March 19). Trade ties between China, Bangladesh on the rise. Sunday Guardian. https://www.sundayguardianlive.com/world/trade-ties-china-bangladesh-rise Dutta, S. (2021, May 12). Forging a Bay of Bengal community is the need of the hour. Asia-Pacific Bulletin, 556. East West Center. https://www.eastwestcenter.org/system/tdf/private/apb556.pdf? file=1&type=node&id=40046. Accessed May 15, 2022. European Bank for Reconstruction and Development. (2021). Belt and road initiative. https:// www.ebrd.com/what-we-do/belt-and-road/overview.html#:~:text=China’s%20Belt%20and% 20Road,trade%20and%20stimulating%20economic%20growth France 24. (2022, May 23). Biden unveils Indo-Pacific framework countering China during Japan visit. https://www.france24.com/en/asia-pacific/20220523-biden-unveils-indo-pacificframework-countering-china-during-japan-visit. Accessed May 29, 2022. Khatun, F., & Sadat, S. Y. (2020, November 19). How can Bangladesh benefit from the Belt and Road Initiative. Dhaka Tribune. https://cpd.org.bd/how-can-bangladesh-benefit-from-the-beltand-road-initiative/. Accessed May 24, 2022. Observer Research Foundation. (2021). China–Bangladesh strategic linkages. https://www.orfonl ine.org/expert-speak/china-bangladesh-strategic-linkages/. Accessed May 21, 2022. Paszak, P. (2021, February 28). China and the Malacca Dilemma. In China Monitor. Warsaw Institute. https://warsawinstitute.org/china-malacca-dilemma/. Accessed May 16, 2022. Plagemann, J., Datta, S., & Chu, S. (2021). The paradox of competing connectivity strategies in Asia. Third World Quarterly, 42(10), 2265–2281. The Daily Star. (2020, October 14). Bay of Bengal prospects: Growing importance of the Bay of Bengal for Bangladesh in the post-Covid world. https://www.thedailystar.net/

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The Economist Intelligence. (2019). The problems facing Bangladesh’s exports. https://country. eiu.com/article.aspx?articleid=948500478&Country=Bangladesh&topic=Economy. Accessed May 25, 2022. The White House. (2022). Remarks by President Biden at Indo-Pacific economic framework for prosperity launch event. https://www.whitehouse.gov/briefing-room/speeches-remarks/ 2022/05/23/remarks-by-president-biden-at-indo-pacific-economic-framework-for-prosperitylaunch-event/. Accessed May 27, 2022. US Department of State. (2022). US security cooperation with Bangladesh. https://www.state.gov/ u-s-security-cooperation-with-bangladesh/

Chapter 4

Manifesting the South East Asian Dream: Understanding the Bhutanese Perspective Sohini Nayak

Abstract The neighbourhood strategy of Bhutan is a response to myriad geopolitical demands, to suit its ambition in the wider global order of substantial competition. Consequently, there is a perpetual renewal of cardinal propositions, aimed at widening its diplomatic pursuit. One such narrative that the landlocked nation has been banking upon is the Act East Policy of India, in the garb of the Indian “Neighbourhood First Policy”, consequently aimed at enhancing the perpetual periphery of the country and shifting the paradigm towards the South East Asian nations, seeking higher regional integration. With this background, the paper seeks to identify the foreign policy narratives of Bhutan along with probable solutions that it can amass to accomplish the South East Asian dream. Keywords Gross National Happiness · Northeastern region · BIMSTEC · Connectivity

Placing Bhutan in the Global Platform: A Brief Background The small landlocked Himalayan kingdom of Bhutan has been successfully grabbing the attention of the global community for decades. With its enthralling geographical location amidst the mighty Himalayas, abundant natural resources like renewable energy and a unique philosophy of Gross National Happiness (GNH), instrumental as its developmental strategy,1 Bhutan has been preparing to create its own niche in South Asian geopolitics and beyond. The country also promotes a symbiotic relationship between human beings and the environment, thereby inspiring the world on

1 Gross National Happiness is viewed as a developmental tool, more important than Gross National Product (GDP). For more see, The GNH Center Bhutan, https://www.gnhcentrebhutan.org/about/

S. Nayak (B) Department of International Relations, Jadavpur University, Kolkata, India e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 L. Ghosh and A. B. R. Chaudhury (eds.), India’s Relations with Neighboring South and South East Asian Countries, Dynamics of Asian Development, https://doi.org/10.1007/978-981-99-4610-5_4

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“proper planetary stewardship” as has been elaborated in the book, Bhutan: Conservation and Environmental Protection in the Himalayas (Ugyen et al., 2021), thus being one of a kind in its own right. Primarily a rural economy with 79% of the population living in rural areas, the country has recently risen to the status of a lower-middle-income nation (World Bank n.d.), with the poverty rate dropping from 36 to 12% between 2007 and 2017, based on USD 3.20/day poverty line (World Bank, 2021). It must be mentioned at this juncture that Bhutan had to struggle to move beyond its short-term macroeconomic imbalances emanating from hydropower-led growth, which was one of the highlights of its country profile for attracting investments. Without a proper climate for investment and diversification of economy and job creation, there was a lacuna in the private sector with low agricultural productivity, slow infrastructural growth rates and a small market. As a result of its rugged terrain and topography, it is vulnerable to disaster and climate change, thereby requiring constant external support (World Bank, 2014). Here, one of the vital sources of assistance came in the form of the tourism sector, becoming one of the major sources of income for Bhutan, focusing on sustainability and exclusivity and also fetching government revenue. Before the wrath of the COVID-9 pandemic, the “high value, low volume tourism” framework did gather a lot of attention along with the privatization of this domain with the Tourism Council, under the Ministry of Trade and Industry (International Trade Forum, 2011).The policy of imposing USD 200 per person per day tariff (including USD 65 charged as royalty by the government with food, accommodation, local transport and guides) helped the country to not only build a valuable experience but also support the ideology of environmental conservation with the inflow of select few people (International Trade Forum, 2011). Strategically too, Bhutan has been able to cultivate this aspect through the Buddhist circuit that has been a part of its “Dhamma diplomacy” setting a benchmark in soft power strategy. For instance, the recently released Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Master Plan on for Transport Connectivity (ADB & BIMSTEC, 2022) clearly mentions a very important route in the Buddhist Temple Tourism Circuit that involves Bhutan as well. The route encompasses Kapilavastu (Nepal)–Lumbini (Nepal)–Kathmandu (Nepal)–Paro (Bhutan)–Thimphu (Bhutan)–Punakha (Bhutan)–Bumthang (Bhutan)–Trashigang (Bhutan)–Paro (Bhutan)–Amaravathi (India)–Chandavaram (India)–Guntupalli (India)–Bhattiprolu (India)–Colombo (Sri Lanka)–Kataragama (Sri Lanka)–areas around Monaragala (Sri Lanka)–areas around Badulla (Sri Lanka) Kandy (Sri Lanka)–Anuradhapura (Sri Lanka)–Colombo (Sri Lanka) (ADB & BIMSTEC, 2022). Such a development will actually help the country in actualizing one of its latent desires to move beyond the South Asian periphery, towards South East Asia, where again, Buddhism is one of the principal religions, ultimately garnering better opportunities for development with the inflow of tourists and hence better investments globally through the circuit.

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Bhutanese Foreign Policy for the Win? Bhutanese foreign policy is often theorized as a contrivance of the “Buddhist statecraft”: peaceful, multilateral and devoid of unnecessary feud with stakeholders and partners. As explained by W. J. Long in A Buddhist Approach to International Relations (2021), the very notion of “happiness” is the essence of Bhutan’s interaction with other countries, both immediate and extended neighbours. This idea is also overtly distinct from the Western idea of happiness or the feel-good factor and even Aristotle’s aspect of happiness or eudemonia that summarizes a deep sense of commitment through a virtuous livelihood (Long, 2021). On the contrary, the Buddhist principle refers to a state of mind that is peaceful and long lasting, not controlled by the external circumstances alone, although not isolating the material pleasures of life completely. This means that the governments’ role lies in providing the best possible environment for the individual growth intertwined with the political and socio-economic outcomes. As a matter of fact, Bhutan was so bent on its GNH model that in 2009, the country was even prepared to give up on its membership of the World Trade Organization if its ideology was not given acceptance in the world stage (Long, 2021). Jessica Locke talks about Bhutan’s take on Buddhist modernism, elaborated as the form of Buddhism that has emerged out of interaction with the novel forces of civilization like globalization (Locke, 2020). The best example of this is the shift that Bhutan itself reflected with the transformation from absolute monarchy to constitutional democracy within a very short span of time. This feature has been the perfect amalgamation of the ideologies of the King or the Druk Gyalpo “in whose person the dual secular and religious pillars of the Bhutanese state are unified and who, as a Buddhist, shall be the upholder of [this dual, secular and religious state]” and the Western political complementarities of sovereignty, human rights, treaties, conventions, protocols and the other instruments that are unmissable for the smooth implementation of a democratic nation (Locke, 2020).This philosophy has been crucial to Bhutan’s approach to other nations, especially in reaching beyond its regional periphery. However, the problem lies in finding like-minded countries that will be able to gauge the importance and the substance of Bhutan’s foreign policy ideology. Intelligently enough, Bhutan has always reached out to its southern neighbour India. With similar Sino-Tibetan dialect, it has acted as a steppingstone and a reliant agency to move forward.

Partnering with India: A Congenial Association to Reach South East Asia? The ever-dynamic diplomatic relationship between India and Bhutan has been exemplary in the South Asian geopolitical setting since 1968. Underpinned with trust, goodwill and mutually beneficial cooperation, both the neighbours have been

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constantly using the fruits of the Treaty of Friendship and Cooperation, signed in 1949 and then revised in 2007 (MEA, GOI, 2020; MFA, Govt. of Bhutan, 2020).2 Deep rooted cultural and religious ties, often called “mythical commonality” preliminarily premised upon Buddhism and the “Madhyama Marg” preached therein, have further enhanced the connection between the two countries (Daijiworld News, 2022).Consistently extending the highest amount of economic assistance, India has been Bhutan’s largest socio-economic development partner (MFA, Govt. of Bhutan, 2020), with the latest contribution of Rs. 4500 crores for the 12th Five-Year Plan of Bhutan, comprising around 73% of its external grant component (MEA, GOI, 2020). Additionally, India is also the biggest market of Bhutan’s exports for electricity, dolomite, ferrosilicon and semi-finished products along with the free import from India for products like arms, ammunition, machinery and military materials or stores that may be required for the welfare of Bhutan, given that there is no danger from such importation (MEA, GOI, 2007). Bhutan is aware of the opportunities that are present for it to access the larger Asian enterprise—a geoeconomic gateway to East and South East Asia through the northeastern states of India (Jain, 2016).The northeastern region (NER) hosts 3.8% of the national population, which is around 8% of India’s total geographical space. The 434 miles long Bhutan-India border connects Sikkim, West Bengal, Arunachal Pradesh and Assam to the Himalayan nation. Since the Bhutan-China border is closed, the only land access into Bhutan is through Phuentsholing (Bhutan) and Jaigaon (India) and is also the only checkpoint for foreigners of either country to move across through the open border (World Atlas, 2018). With the Ministry of Development of the northeastern region, India has been persistently following up on the very crucial aspects of the Vision Statements created for the area, particularly access to sea links for the NER through the Sittwe Port in Myanmar and the Chittagong Port in Bangladesh, which can also be of help to Bhutan, since it is also a landlocked country, looking for opportunities to increase trade via sea routes and transit hubs. If such a development happens, then the reliance of Bhutan on the Kolkata Port for handling and managing all of its sea freight imports will be diversified for the better (Ashcroft, 2017). The northeast as a centre or economic hub for connectivity has also been the centre of multilateral projects like the India-Thailand-Myanmar Trilateral Highway Project, the road from Dawki-Tamabil Indo-Bangla border at Meghalaya going all the way to connect all continental ASEAN countries; construction of the 1.8 km long Feni bridge connecting India and Bangladesh for transporting goods from the Chittagong and Kolkata ports (Manchanda, 2020). These projects underpin the idea of making best of the geographical proximity and connecting to projects like the Kaladan Multimodal Project in Myanmar, for instance. Circumstantially, the state of Tripura has been often considered as the pivot of this developmental enterprise as the town of Sabroom is one of the closest towns to Bangladesh and the Agartala–Akhaura 2

The diplomatic relationship between India and Bhutan commenced with the first Prime Minister of India, Jawaharlal Nehru and His Majesty, Jigme Dorji Wangchuk, the third King of Bhutan, laying the framework of the special relationship.

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Railroad and the inland waterways port at Sipahijala district will only simplify the objective (Sentinel Assam, 2021). The development of the inland waterways is being given special emphasis by the Government of India with construction of floating jetties over the Gomati River at Sonamur in Tripura that will not only connect to the Yamuna River in Daudakandi in Bangladesh, which is a 90 km protocol route. This was to become operational in 2020. This route also connected to Haldia port in West Bengal and up to Banaras covering a distance of 1400 km, thereby clearing ambiguity on the potential of trade as well as people-to-people interaction through seamless connectivity (Lokmat, 2021). Additionally, Prime Minister Modi had also laid stress on Science and Technology Intervention in Northeastern Region (STEINER), conceptualized and funded by the Ministry of Development of Northeast Region (MDoner), with the main aim of bringing all the modern technologies for the development of the region so that it can actively participate in the cross-border negotiations (CSIR-North East Institute of Science and Technology, n.d.). Added to this is the North Eastern Region Vision 2020 document, as released by the Government of India that brings about an overarching framework of development. This vision document has identified infrastructure and connectivity as an integral part of the region with a Non-Lapsable Central Pool of Resources (NLCPR) (Press Information Bureau, 2019). This blueprint also includes the plan of developing 20-Port township along the Brahmaputra and the Barak River to enhance intraregional connectivity. All these ready chances are lucrative enough offers for Bhutan to cultivate this area more seriously. In fact, Bhutan has already begun capitalizing on this particular area in 2018. The launch of a direct flight route between Guwahati, in Assam, India and Singapore by the Bhutanese Airline, Druk Air extended the connectivity dimension of strategy making since it would involve Bhutan, India and ASEAN and benefit each one of them individually to rekindle the age-old saga of the Silk Route. The announcement was made in Bhutan during the inauguration of the Royal Bhutanese Consulate General in Guwahati, Assam, which is also the biggest city in the northeast (Borah, 2018). This practically means that Bhutan has to be aware and become a partner in forwarding India’s Act East Policy, resting on the 3Cs—commerce, culture and connectivity in order to solidify the partnership. The synonymity lies in India being a part of the Buddhist circuit itself and the fact that it has not lost a chance of gaining access to the Suvarnabhumi or the land of gold, which is what South East Asia is often addressed as, premised upon the Buddhist link—travelling from India along the trans-Asian overland and maritime trade networks. Buddhism functions as the fulcrum around which the relationship between India and ASEAN has blossomed (Chand, 2014).ASEAN countries like Laos, Cambodia, Thailand and Myanmar have Buddhism embedded in their “nationalistic” thinking. If Bhutan is to gain access via India, the chances of being accepted as a suitable stakeholder are high, given that the ASEAN countries are often dictated by the Buddhist philosophy of “Sangha” or a collaboration, based upon consensus among all the members who agree to alleviate each other for greater causes and development (Stobdan, 2016). This collaboration

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can be readily provided with the help of BIMSTEC of which both the countries are active members. However, the problem for Bhutan lies in the sensitivity of the region. The NER is extremely sensitive from a strategic point of view, mainly from insurgencies and Chinese-influenced operations and political war along with illegal migration and drug trafficking (Kumar, 2019). This area was considered to be a “red zone” with more or less 30 armed insurgent organizations that had linkages with groups of similar nature in the neighbouring countries as well (Nayak & Banerjee, 2021). However, several initiatives have been undertaken to deal with such an issue. Interestingly, one was effectuated by Bhutan itself in 2003 when it launched Operation All Clear to dismantle the camps of the United Liberation Front of Asom (ULFA) and the Kamtapur Liberation Organization, which resulted in the killing or arrest of about 650 people (Nayak & Banerjee, 2021). Apart from this internal dissension, another problem area that has hampered the smooth interaction between Bhutan and the NER is the lack of para-diplomacy efforts, also referred to as subnational diplomacy. This idea refers to the engagement between a particular country with a particular state of another country that may be of interest for collaborative prospects. As has been identified by Nitasha Kaul and Dechen Rabgyal in Bhutan and Northeast India: Subnational Diplomacy Possibilities (2021), in the initial years of independent India, Bhutan was viewed in “terms of strategic competition with China and prioritized this over para-diplomatic aspects of the relationship”. Again, with time and better strategic acumen, India began prioritizing Bhutan over its states in the supply of raw materials because of its aim of making Bhutan an integral part of its geopolitical narrative and ambit. However, what could not be achieved was interpersonal communication between a specific geographical realm like the northeast and Bhutan. All the eight sisters of the northeast have their own degree of partnership with Bhutan, depending upon the requirement. For instance, the Bangladesh-Bhutan-India-Nepal (BBIN) subregional forum was intended to be a part of the para-diplomacy effort from India, but it failed when the Bhutanese Parliament decided not to ratify the BBIN Motor Vehicles Agreement (MVA) based on environmental concerns- fragile ecosystem and concerns over absorptive capacity of infrastructure development (Kaul & Rabgyal, 2021). Nonetheless, this attempt to engage at a more grass-root level was also hampered by the COVID-19 as the borders were sealed, thereby affecting the local communities. In this case, opportunities are also present to initiate people-to-people contact for better subnational diplomacy. One such example is that of water sharing and water security. There are 56 rivers that flow down from Bhutan to the eastern state of Assam, finally flowing into the Brahmaputra River (Northeast Now, 2018). The inhabitants on both sides of the border have been often classified as one of the poorest in the region. They are mostly tribal people, recovering either from ethnic conflict or armed clashes in Assam that has displaced over 400,000 people since 1996 (Northeast Now, 2018). This region needs more active participation of the government for better productivity, which will in turn benefit both Bhutan and India. There are associations working with local communities, representing the southern districts, municipalities of Bhutan like

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Gelephug and Samdrup Jongkhar, intending to share resources and help each other in management.

Conclusion The strategic position of Bhutan requires a more tangible agenda for actually manifesting the goals that have been neglected in the recent past. Not only South East Asia but even Bhutan’s movement to the wider Indo-Pacific region is a strong possibility, given the country’s memorable invitation from the Deputy Secretary of State of the United States of America, John J. Sullivan, to move eastward. In fact, the already well-known “buffer” between India and China in South Asia can be an interesting addition to the new strategic theatre where all the world’s major powers are engaging with each other. Even though its probability of joining the India-centric collaboration seems to be more likely, given its South East Asian ambition, the guess may prove to be wrong. Thus, Bhutan must tread carefully in moving beyond its cocoon and wait for the time to be ripe, until which the country must count on enhancing its para-diplomacy skills not only in India but also around the other countries of the immediate neighbourhood, after identifying the areas of potential collaboration.

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Kaul, N., & Rabgyal, D. (2021, September 15).Bhutan and Northeast India: Subnational diplomacy possibilities. South Asian Voices. https://southasianvoices.org/bhutan-and-northeast-india-sub national-diplomacy-posibilities/ Kumar, N. (2019, October–December). Security gaps in the northeast of India will be fatal. The United Service Institution of India. https://usiofindia.org/publication/cs3-strategic-perspectives/ security-gaps-in-the-northeast-of-india-will-be-fatal/ Locke, J. (2020). Buddhist modernism underway in Bhutan: Gross national happiness and Buddhist political theory. Religions, 11(6), 297. https://doi.org/10.3390/rel11060297 Lokmat. (2021. February 7). Northeast to benefit largely as India developing 4000 km of inland waterways: Mansukh Mandaviya. https://english.lokmat.com/national/northeast-to-benefit-lar gely-as-india-developing-4000-km-of-inland-waterways-mansukh-mandaviya/ Long, W. J. (2021). A Buddhist approach to international relations: Radical interdependence. Palgrave Macmillan. https://doi.org/10.1007/978-3-030-68042-8_5#citeas Manchanda, J. (2020, October 28). Feni Bridge connecting India–Bangladesh will be completed by Dec 2020, says Nitin Gadkari. Republic World. https://www.republicworld.com/india-news/ general-news/feni-bridge-connecting-india-bangladesh-will-be-completed-by-dec-2020-saysnitin-gadkari.html Ministry of External Affairs, Government of India. (2007). India-Bhutan friendship treaty. https:// mea.gov.in/Images/pdf/india-bhutan-treaty-07.pdf Ministry of External Affairs, Government of India. (2020, February). India–Bhutan relations. Bilateral Brief . https://mea.gov.in/Portal/ForeignRelation/Brief_Bilateral_Brief_bhutan_Feb_2020. pdf Ministry of Foreign Affairs, Royal Government of Bhutan. (2020, December 11). Bilateral relations. https://www.mfa.gov.bt/?page_id=8824 Nayak, S., &Banerjee, S. (2021, June). The role of BIMSTEC in revitalizing India’s northeast. In ORF Special Report No. 150. Observer Research Foundation. https://www.orfonline.org/wpcontent/uploads/2021/06/ORF_SpecialReport_150_NER-BIMSTEC.pdf Northeast Now. (2018, August 27). Villagers of Bhutan and Assam come together to share river. https://nenow.in/north-east-news/villagers-bhutan-assam-come-together-share-river.html Press Information Bureau. (2019, July 15). North eastern region vision 2020. Ministry of Development, North Eastern Region, Government of India. https://pib.gov.in/Pressreleaseshare.aspx? PRID=1580240 Sentinel Assam. (2021, March 23). BIMSTEC and northeast. https://www.sentinelassam.com/edi torial/bimstec-and-northeast-529937 Stobdan, P. (2016, February 19). Asia’s Buddhist connectivity and India’s role. In IDSA Issue briefs. Manohar Parrikar Institute for Defense Studies and Analyses. https://idsa.in/issuebrief/ asias-buddhist-connectivity-and-indiasrole_pstobdan_190216#:~:text=Buddhism%20and% 20Asian%20Values%20Undoubtedly%2C%20Buddhism%20provided%20the,Japan%2C% 20Korea%20and%20in%20other%20parts%20of%20Asia Ugyen, T., Tobias, M. C., & Morrison, J. G. (2021). Bhutan: Conservation and environmental protection in the Himalayas. Springer. World Atlas. (2018). Which countries border Bhutan? https://www.worldatlas.com/articles/whatcountries-borderbhutan.html#:~:text=Bhutan%20borders%20India%20to%20the%20nort heastern%20side.%20The,1865%20demarcated%20the%20boundary%20between%20the% 20two%20countries World Bank. (2021, June).The World Bank in Bhutan. https://www.worldbank.org/en/country/bhu tan/overview#1 World Bank. (2014, August 25). Country partnership strategy for the Kingdom of Bhutan. International Development Association and International Finance Corporation, The World Bank. https://documents1.worldbank.org/curated/en/612871468205491416/pdf/885970CPS0P1480 00Box385310B00OUO090.pdf. https://www.tradeforum.org/article/Bhutan-A-model-for-sus tainable-tourism-development

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World Bank. (n.d.). Bhutan: Country partnership strategy for the period FY20152019. https://documents.worldbank.org/en/publication/documents-reports/documentdetail/612 871468205491416/bhutan-country-partnership-strategy-for-the-period-fy2015-19

Chapter 5

Nepal’s Drive for Multimodal Connectivity Purushottam Ojha

Abstract Nepal remained in isolation from the global market for a long time due to poor transport connectivity and lack of access to a seaport. The first road linking the border city of Birgunj with Kathmandu was constructed during the first half of the 1950s, followed by the construction of other highways and roads connecting major cities of the country. Road has become the preferred mode of transportation in the hills and mountains, while prospects for multimodal transport are high in the southern plains. The development of Inland Clearance Depots (ICDs) and trade facilitation measures taken up in the second half of the 1990s, marked a departure towards the implementation of a multimodal transport system in the country. Nepal has concluded a transit transport agreement with its three neighbouring countries. Nepal has been working with its neighbours in establishing multimodal transport network under the regional, subregional and bilateral framework. Initiatives for development of hard and soft infrastructures for seamless connectivity are on the anvil. However, this needs to be reinforced with greater collaboration, confidence and cooperation among BBIN countries. Keywords BBIN · Connectivity · Multimodal transport · International conventions · Infrastructures · Transit transport

Background Hindered by a difficult terrain and wedged between two giant neighbours, Nepal remained isolated from the international markets for a long time. In absence of proper connectivity to and from seaports, external trade was confined within its two neighbours, India and China, till the country ushered in a multiparty democratic P. Ojha (B) Trade, Transit, Investment and Private Sector Development, Government of Nepal, Kathmandu, Nepal e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 L. Ghosh and A. B. R. Chaudhury (eds.), India’s Relations with Neighboring South and South East Asian Countries, Dynamics of Asian Development, https://doi.org/10.1007/978-981-99-4610-5_5

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system with the overthrow of the dynastic-autocratic regime in 1950. Border inhabitants on both sides of the frontiers used to trade in small volumes on a barter basis, while cross-country trade of merchandized goods was carried out on a commercial scale, and these normally become the source of revenue for the government. Till the 1880s, Kathmandu valley also served as the centre of entre-pot trade between India and Tibet, China. Kathmandu lost this status with the opening of the Nathu La Pass and the Chumbi valley as the direct trade route between the two countries. Transportation of traded goods across the Himalayan range, in the early period, was carried by means of mules, horses, donkeys and human porters. On the southern plain, bullock cart, draft animals were the common means of transport, which were later on facilitated by lorries and trains plying between stations in India and Amlekhgunj and Janakpur cities in Nepal. The first rail link to Nepal was made operational in 1927, connecting Raxaul to Amlekhgunj in Bara district, a stretch of 38 km. This was followed by another rail link over a stretch of 50 km between Janakpur (Nepal) and Jayanagar (Bihar, India), which was constructed and brought to operation in 1937. These rail links were used for the transportation of passenger traffic as well as the export of timbers from Nepal to India. Motor vehicle was ferried by the porters from foothills of Bhimphedi to Kathmandu for the first time during the time of Rana Prime Minister Bir Shumsher (1885–1901). Subsequent Rana rulers followed suit and preferred ferrying motorcar by porters rather than building roads across the mountains. The history of aviation services in Nepal dates back to 1949 with the first landing of an Indian aircraft in the grassy land of Kathmandu called Gauchar (grazing land). This airfield was later developed as the international airport and named after the Late King Tribhuvan in 1955. This remained as the only international airport of Nepal until the second airport in Bhairahawa commenced operations in May 2022.

Transport Infrastructures The history of road construction in the country is very recent. Few north–south roads within Terai and urban roads in Kathmandu valley were constructed at the end of the nineteenth century. After the political changes of 1950 from autocratic to democratic regimes, Nepal implemented its First Five-Year Plan in 1956. There were 500 km of road length, two narrow gauge rail lines,1 and one ropeway with a length of 23 km between Dhorsing, (Makawanpur) and Matatirtha (Kathmandu) in operation during the first plan. Similarly, air services were limited to Kathmandu and four other cities of Simara, Pokhara, Bhairahawa and Biratnagar. The first north–south road, with a length of 189 km, connecting Birgunj with Kathmandu was constructed with Indian assistance in the first half of the 1950s. In view of the importance of transportation sector for enhancing socio-economic 1

Two narrow-gauge rail links; Raxaul-Amlekhgunj, 47 km and Jayanagar-Janakpur, 27 km were operational between Nepal and India during the period.

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progress of the country, the Government of Nepal accorded priority to building roads and highways in the ensuing periodic plans. Some key infrastructures were built, and public sector industries were established during the 30-year period of the Panchayat regime established by the Late King Mahendra B.B. Shah in 1960. Construction of the East–West Highway was taken up in 1961 followed by the construction of other highways—such as the Kodari, Prithvi and Siddharth highways—that connected major cities in the country. The Government of Nepal also supported the improvement of mule tracks and trails in the mountain and hills to ease the movement of people and goods while several suspension bridges were constructed over the gorges of the river, mainly with Swiss assistance. The construction of district and rural roads was accelerated after another political change in the country in 1990, replacing many old mule tracks and foot trails. The successive governments substantially increased their grants to the locally elected institutions and the latter largely used such funds to develop road infrastructures within their territorial jurisdictions. Being a mountainous country, road transport is the preferred mode of transportation for Nepal. As a result of road development programmes of the government at all levels,2 the total length of road constructed reached 33,528 km by mid-March 2021—that includes 15,974 km black topped, 8,582 km gravelled and 9,198 km earthen or fair-weather roads. On an average, between 2015 and 2020, the length of the road constructed was around 645 km each year. In addition, 63,577 km of road were constructed at the provincial and local levels; of these 72% are the earthen roads that are serviceable only during the summer and winter seasons (MOF2021). Expansion of railway lines in the southern plains having links to the Indian railway network began recently after the rail link between Raxaul and Birgunj ICD was operationalized in 2004. Rehabilitation and upgrading of the old railroad connecting Janakpur with Jayanagar in Bihar, India, are under progress and the Jayanagar–Kurtha section having a 51 km length has come into operation in April 2022. The next link from Bathnaha to Biratnagar is in the final stage of construction. A detailed feasibility study of the 945 km Mechi–Mahakali electric railway line has been completed, and a track bed of 42.5 km was laid around mid-March 2021. Similarly, the Government of Nepal has embarked on the plan of creating a North– South Rail Corridor. A detailed project report (DPR) of the Rasuwagadhi–Kathmandu railway has been initiated under Chinese assistance, while the feasibility study of the Kathmandu–Birgunj railway is being carried out with the assistance of the Government of India. Air service is another important mode of transport in Nepal. Being predominantly a mountainous country, almost all airfields in the hills and mountains provide short take-off and landing (STOL) services. Of the 54 airports developed in the cuntry, 41 are having the paved runway, and 33 of them in operation. The rest remain idle, primarily due to availability of the road facilities. Currently, one airport in Kathmandu provides international services, while three other airports in Bhairahawa, Pokhara

2

After adoption of federal system of government in the country in 2015, the provincial and local governments elected by the people accorded top priority in development of road infrastructures.

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and Nijgarh are under various stages of development. As of mid-March 2021, 27 international airlines operate in Nepal. Ropeways and inland waterways transport in Nepal have very limited operations, mainly used for recreational and tourism purposes rather than as a means of mass transport. There is increasing interest among investors to invest in the development of cable cars to provide connections to the mountaintops and religious places at high altitudes. Water transport is limited to rafting and kayaking along the high gradient of rivers, and there is also amateur boating for tourists in the natural lakes and artificial lakes developed for the generation of electricity.

Multimodal Connectivity Although the use of containers for the cross-border movement of traded goods started as early as in the 1950s, this entered into Nepalese trade only in the 1980s. With inherent benefits associated with the reduction in theft, pilferage and losses during transport and opportunities to reduce the cost of transit transport, Nepal embarked upon the development of a multimodal containerization project in the early 1990s. The project envisaged development of three Inland Clearances Depots at the major border posts of Birgunj, Biratnagar and Bhairahawa and implement related trade facilitation measures, including the automation of customs processes. The project was financed with borrowings from the World Bank/International Development Assistance and the technical assistance of the United Nations Conference on Trade and Development (UNCTAD). Out of three ICDs, the biggest one in Birgunj was developed for rail connected facility and the Government of India provided grant assistance for a 5 km rail spur connecting Birgunj with the railway station at Raxaul. This facility was bought to operation in July 2004, following the completion of the railway spur and the conclusion of the bilateral rail services agreement between the two governments. This was more important for a landlocked country like Nepal that had been incurring high transaction costs in transit transport operations. A provision was added in the bilateral Treaty of Transit in 1996, to further facilitate the movement of containerized traffic between ports in the India and Nepal borders. According to this, the customs officer posted in the land border post or the port of entry, whatever the case may be, will merely check the one-time lock put by the shipping agent or the carriers authorized by the shipping agent and allow the containers to move ahead without opening it. Only in case of genuine reasons, the containers could be opened by the customs officer. This has greatly cut the customs clearances time and simplified procedures at the port or the land customs station in India (MOC2017: 106). The Birgunj ICD, spreading over an area of 38 hectares, is found to be connected with broad gauge railway lines. It has six full-length railway tracks that can handle containerized, bulk and break-bulk cargoes. Other major structures of the facility include a full-length (700 m) goods shed, container freight station, container parking

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yard, parking space for 150 trucks, administrative buildings for customs, ICD operators and other border agencies. This facility provides a good interface between the rail and road modes of transport, while the other two ICDs in Biratnagar and Bhairahawa, are relatively small in size and serve as the meeting point between the road transportation at the Nepal-India border. The Government of Nepal developed the fourth ICD in Kakarbhitta, at the eastern border of Nepal in 2011, followed by the development of a fifth ICD in Tatopani, in the northern border with Tibet in China, and completed in 2016. A hinterland ICD was constructed and bought to operation in Kathmandu since April 2022 that basically serves as a satellite of the Birgunj ICD. Some other ICDs that are in the pipeline and at various stages of development are: Rasuwagadhi in the northern border and Chandani-Dodhara in the Western border with India. Besides these, the improvement of border infrastructure is undertaken by Integrated Customs Check-Posts (ICPs) that have been developed and remain in operation in Birgunj and Biratnagar. Meanwhile, such additional facilities are also being developed in Nepalgunj and Bhairahawa. Road and highway improvement programmes of the Government of Nepal are also in tandem with the development of other related infrastructures. Widening of north– south roads connecting foothills with the border towns of Biratnagar, Inarwa, Birgunj, Bhairahawa, Nepalgunj and Dhangarhi have been taken up. Besides, the government has also taken up the task of upgrading the East–West Highway and strategic roads that help in connecting the production centres and markets, for enhancing the efficiency of transport services.

Transit Transport Historically, Nepal was granted limited transit facilities by the British-India Government under a Peace and Friendship Agreement signed on December 1923. The treaty allowed use of Indian ports free of customs duties for import of public goods belonging to the Nepal Government. Article six of the agreement stipulates that goods imported by the Government of Nepal for immediate transport to the country were to be exempted from the customs duties on British Indian ports (Sharma [Kandel] 2009: 202). This practice remained in vogue until another Treaty of Trade and Commerce was signed with the Government of India in July 1950. This treaty for the first time recognized the full and unrestricted rights of commercial transit for Nepal (Bhattarai & Khatiwada, 1993: 205). The Treaty of Trade and Transit were the conjoined twins before splitting them into two separate agreements in 1978. Nepal’s third-country trade was mostly routed through the ports of Kolkata and Haldia in West Bengal, until Visakhapatnam was added in 2016 as an additional port for the movement of transit traffic between the Nepal border and the seaports in India. Traffic-in-transit move via road and rail transport through the former two ports, while cargo to and from Visakhapatnam move via trains due to longer haulage. Kolkata had been the traditional transit port of Nepal due to its relatively shorter distance from

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the Nepal border, at a distance of 800 km from the Birgunj–Raxaul crossing. The bilateral Treaty of Transit, its protocol, memorandums and letters exchanged from time to time and the Rail Services Agreement, 2004 provide basis for the movement of transit traffic. The treaty has also designated 15 land border crossings for the clearance of goods in transit, but only six or seven remain effectively functional and handle almost all third-country trade, moving to and from the seaport. Nepal has also concluded a Treaty of Transit with the Government of Bangladesh in 1976, which allows for the use of the Chittagong and Mongla ports and four land border posts (Petrapole, Biral, Banglabandha and Chilahati) for the movement of transit traffic. However, more than 90% of the bilateral trade between Nepal and Bangladesh take place via the Phulbari–Banglabandha corridor, while very few transit cargoes move through the Singhabad–Rohanpur rail route. The overseas trade is rarely transported through Bangladesh, mainly due to constraints such as a longer distance in comparison to Kolkata, inadequate physical infrastructure at land borders and ports, the need for completing dual transit procedures of Bangladesh and India, and the need for the transshipment of cargo at the international borders between India and Bangladesh (Ojha, 2003). Similarly, the Government of Nepal has signed a bilateral Transit and Transportation Agreement with the Government of the People’s Republic of China in 2016, and its protocol in 2019. The agreement allows for the use of four seaports (Tianjin, Shenzhen, Lianyungang and Zhanjiang) and three land ports (Lanzhou, Lhasa and Rikaze) for transiting goods through Chinese territory. According to the protocol, Nepalese transport vehicles will be allowed to ply between the Nepal border and the Rikaze dry port through a permit issued by the Chinese authorities. However, the provisions of this agreement are yet to be tested and made operational. Nepal and China have also signed an agreement in 2012 for the management of six border posts on both sides that are also officially designated routes for overland trade. Despite the arrangements made with neighbouring countries for the facilitation of transit services, Nepal’s logistics cost is one of the highest in South Asia. According to the World Bank’s Logistics Performance Index, 2018, Nepal is in the 114th position out of 160 countries which is much lower than that of India (44th position), Maldives (86th), Sri Lanka (94th) and Bangladesh (100th position) (World Bank, 2018). Inadequate infrastructure, inefficient customs procedures and poor logistics competence are major factors, contributing to lower rating in the logistics performance indicators. Efficiency and quality aspects of the logistics services are also not satisfactory. According to a survey done on carpet and garments, it takes 46 days to complete export transaction. The time required for completing a Nepalese export is at least 141% higher than that of India and 64% higher than that of Bangladesh, ostensibly indicating poor performances of logistic services (Rajkarnikar, 2010: 38).

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Issues and the Way Forward Nepal has made good progress in increasing road length over the last three decades, despite major questions on the standards and sustainability of its constructed roads. Simultaneous growth of road infrastructures and motorized vehicles has also added challenges in relation to road safety and security. There has been a sharp increase in the number of road accidents in the recent years. From July 2014–July 2019, there were a total of 54,000 road accidents in Nepal, resulting in 12,000 deaths of people mostly in the age group of 15–40 years. On an average, 40 people are injured on roads across the country each day (Nepal Times 2021). Poor road conditions, truck overloading, less efficient and worn-out vehicles and lack of proper knowledge about traffic rules are the causes of accidents, also resulting in higher costs of transportation. Hence, the primary need is to improve the trucking system and ensure road safety along with the development and upgradation of roads and highways. Nepal’s external trade is heavily skewed towards India and occupies more than 60% of import and almost 75% of the export in recent years. Geographical proximity, multiple trade routes and tariff preferences extended to Nepal under the bilateral treaty and the SAFTA arrangements are primary reasons behind this trade concentration. Trade with its three neighbouring countries, India, China and Bangladesh, is almost three-fourths of the total trade, and the ASEAN countries have a paltry share of just four to five percent in import, while export to these countries is even lesser which is around one per cent of the total trade of Nepal (see Annex). Besides India, Nepal’s export destinations primarily lie in the West, while countries in South East Asia and East Asia are a source of imports. Nepalese imports come from Thailand, Malaysia, Indonesia, Japan and South Korea, which mainly comprise electrical and electronic goods, machinery and equipment, transport vehicles, palm oil, soybean oil, garments and household utensils among others. With a total population of 662 million, ASEAN could be another destination for Nepalese export but requires support of transport connectivity and investment linkages. As a landlocked country, the cost of transit transport is higher due to complexities in documents, procedures and delays in completing the journey. Cargo clearances and onward movement of goods in transit between the Nepal border, and the seaport is heavily dependent on brokers including freight forwarders, shipping agents and customs house agents who generally follow non-transparent operations and create rents. The administrative hassles and the bureaucracy on the clearance of transit cargo are quite heavy at the gateway port, thereby reducing the competitiveness of Nepalese products and incurring high cost of imports. Lessening dependency on these brokers and their agents would require a simple transit processing system based upon the electronic lodging of documents, e-payment and better communication linkages between the regulatory agencies at the land borders and the gateway ports. Introduction of comprehensive guarantee system, allowing undertakings by the government agencies in lieu of bank guarantee, and electronic tracking of vehicle and container scan will help cutting down the cost and procedural hassles.

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An understanding was reached between the Government of Nepal and India in 2018 to establish inland water transport (IWT) as an additional mode of transit transportation between the Kolkata/Haldia port and Nepal, which would pass through the riverine terminals of Sahibganj, Banaras and Kalughat along the Ganges River. This can be a milestone in facilitating intermodal competition of transport and help in reducing the cost of transportation. However, a protocol to give effect to this arrangement is yet to be finalized. Development of transport infrastructures has got priority in various agreements and international cooperation mechanisms, wherein, Nepal is also a signatory. It may be at the subregion and region of South Asia under the SAARC or under the interregional organization of the BIMSTEC or transcontinental connectivity projects like the Asian Highway Network or the Trans-Asian Railways; all these arrangements focus on developing and strengthening transport infrastructures, promoting intermodal competition and linking countries for larger economic and social interactions. The concept of transport corridors proposed under the BIMSTEC and SAARC studies is critically significant for Nepal from the perspective of reducing transportation costs and connecting to the region and beyond. However, this needs to be supported by improving physical infrastructures such as roads, bridges and railways and the development of protocols to remove non-physical barriers. However, actual work on the development of transport corridors and related agreements is not keeping pace with the need of time. The BBIN Motor Vehicle Agreement signed on June 2015 could be a harbinger for enlarging the multimodal connectivity in this part of South Asia. India’s northeastern states are the lynchpin of a greater connectivity plan and are closely connected with India’s Act East Policy. The BBIN process, thus, could be harnessed as an opportunity to develop multimodal connectivity among the four partner nations, bringing efficiency in transit transport services for the landlocked countries. Creating a multimodal transport network connecting Nepal and Bhutan would help in creating a unified market in the subregion. Fragmentation of production and creation of an interindustry value chain is important instruments to increase export and achieve complementarity of trade, particularly by the landlocked countries. These countries produce limited number and quantity of tradeable goods, which are mostly exported with little value addition. In the case of South Asia, India and Bangladesh are emerging as the manufacturing powerhouse of the region, and there are prospects of linking high value agricultural and forest products (such as tea, coffee ginger, cardamom, medicinal herbs, etc.) through agroprocessing, manufacturing of automotive parts, light engineering goods and garments with large manufacturing units in India and Bangladesh. The visionary action of fragmentation of production combined with the facilitation of trade and transport will make it possible for the subregion to emerge as a hub for manufacturing industries. Thus, investment promotion and the industrial policy of the country must go hand in hand to enhance the productive capacity of the economy and benefit from regional integration. Another important aspect in facilitating seamless connectivity is the use and application of information and communication technology in the provision of transport

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and transit services. Current regulatory arrangements in the transit movement of goods require overhauling and a new paradigm of an IT-based system ought to be introduced in order to streamline the processes of cross-border transit operations. This also requires strengthening digital infrastructures within the country, bringing all regulatory agencies under a single window framework and extending the crossborder application of digital connectivity. The case of Central American countries could be taken as an example of international best practices, where these countries have adopted the International Goods in Transit (or TIM in Spanish) system that controls and monitors the goods through an electronic system passing through different customs territories. The provisions contained in the bilateral Treaty of Transit, concluded by Nepal with its three neighbours, seem antiquated in light of technological developments and the emerging concept of transit transport operations in the twenty-first century. International instruments and declarations of multilateral forums provide a firm basis for guiding the negotiation of bilateral treaties. The Trade Facilitation Agreement of the World Trade Organization, customs conventions including the Revised Kyoto Convention (RKC), the Vienna Declaration and Programme of Action (VDPA) and the Istanbul Programme of Action (IPoA) are few such instruments. Nepal as a landlocked country should strive for reducing the hassles of transit transportation by incorporating the provisions of the international agreements and becoming a landlinked country between two neighbours. Physical and energy connectivity along with digital connectivity should be on the priority agenda of transit negotiations. It is also important for Nepal to accede to some other international conventions that strongly support reduction in the time and cost of delivery of transit and transport services. These, among others, include the Convention on International Transport of Goods Under Cover of TIR Carnets of 1975 which allows the movement of goods by road under the single guarantee of a “Carnet”. Nepal’s neighbouring countries, India and China, are already a member of this convention and are in a position to provide transport facilities under this system. Similarly, the Customs Convention on Containers, 1972, provides for the temporary importation of containers, free of import duties and taxes and free of import prohibitions and restrictions, subject to re-exportation within three months from the date of importation. Moreover, the convention provides for the approval of containers for international transport under seal (UN2022). Besides, the UNESCAP-sponsored Framework Agreement on Paperless Trade (FA-PT) is another instrument that promotes the cause of eliminating paperwork in trade transactions.

Conclusion The main challenges for Nepal, as a landlocked country, are to develop adequate transport infrastructure for linking the hinterland of the country with transport services, while at the same time, achieving a secured and safe passage to reach the seaports. With 83% of the land being mountains, hills and valleys, road transport is the preferred

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mode of transport in the mountainous region, while prospects for multimodal connectivity are high in the southern plains linking road and highways with rail and inland water transportation. Efficiency in transport services and connectivity is critically important for the country in order to reduce the cost of delivering goods and linking the country with regional and international markets. Development of railway lines, particularly the electric traction line, is more important for a less stressful and more interesting journey for the passengers and transportation of cargo traffic. This process is moving slowly, and no remarkable progress can be seen in the laying of railway tracks in the East–West Corridor. The current arrangement of cargo clearances at the gateway port is cumbersome. It requires completing complex procedures and documentation and is one of the reasons for increased transportation cost for Nepal. Hence, the process should be simplified by re-engineering and cutting down the steps that are followed in the ports and customs. Both governments must work together in finding a common solution that facilitates safe and secured passage of traffic in transit and also reduces the cost of such movement. The Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicle Agreement (MVA) signed in 2015, is a milestone towards enhancing connectivity within the South Asian subregion. However, this agreement does not have extra-regional orientation. The agreement also does not recognize the special needs of the landlocked country with respect to the transit movement of goods. Contracting parties other than Bhutan have ratified the agreement, with its implementation still in limbo due to a delay in finalizing the protocol. Nepal should strive for optimizing the benefits from the Motor Vehicle Agreement and also leverage the provisions of the agreement in establishing reliable transit systems, not only within the subregion but also beyond the region. Nepal should also seek to accede to key international conventions that promote paperless transactions and allows for single transit documents and a common guaranteed system. The current Treaty of Transit with India should be revisited and aligned with the provisions laid in international conventions and treaties in order to simplify the process and cut down the cost. The arrangement made in the treaties of transit transport with China and Bangladesh should be implemented by removing related obstacles.

Annex See Tables 5.1 and 5.2.

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Table 5.1 Nepal’s trade with ASEAN countries (NRs. Million) Source: Department of Customs, GON: www.customs.gov.np Countries

2018–19

2019–20

2020–21

Export

Import

Export

Import

Export

Import

Brunei

0.021

0.024

0.022

0.032

0.071

10.0

Cambodia

0.031

40

0.026

60

40

160

Indonesia

20

18,200

120

30,800

270

17,100

Lao PDR

–

–

0.002

0.024

0.003

0

Malaysia

220

12,500

150

10,400

120

9600

Myanmar

100

2600

70

3200

60

5100

Philippines

0.023

600

0.01

590

440

20

Singapore

200

5400

800

4500

100

5600

Thailand

50

14,400

60

9400

80

9700

Vietnam

350

11,000

230

7900

100

8200

Total

940.075

64,740

1,430.06

66,850.1

1,210.07

55,490

G. total of the year

97,100

1,418,500

97,700

1,196,800

141,100

1,539,800

Share of ASEAN (%)

0.96

4.6

1.5

5.6

0.85

3.6

Table 5.2 Nepal’s trade with neighbouring countries Country

2018–19 Export

India China Bangladesh

2019–20 Import

Export

2020–21 Import

Export

Import

62,732

917,922

70,109

735,295

106,372

971,604

2110

205,519

1191

18,920

1016

233,923

1293

4242

955

5292

674

10,674

66,135

1,127,683

72,255

759,507

108,062

1,216,201

Total of the year 97,100

1,418,500

97,700

1,196,800

141,100

1,539,800

79

74

63

77

79

Total Share of three neighbouring countries (%)

68

Exchange rate: 1 USD = NRs. 120 Source Department of Customs, Nepal: www.customs.gov.np

References Bhattarai, D., & Khatiwada, P. (1993). Nepal–India: Democracy in the making of mutual trust. Nirala Publications. Ministry of Commerce. (2017). Compendium of transit treaties and agreements of Nepal. Government of Nepal. Ministry of Finance. (2021, May 28, 2021). Economic survey, 2020–21. Government of Nepal. https://mof.gov.np/public/uploads/document/file/1633341980_Economic%20Survey% 20(Engslish)%202020-21.pdf

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Nepal’s Other Pandemic: Road Fatalities.(2021, April 5). Nepali Times. https://www.nepalitimes. com/here-now/nepals-other-pandemic-road-fatalities/ Ojha, P. (2003). Development of transit transport system in Nepal (Unpublished paper). Presented in a seminar on Transit Transport Issues of Landlocked and Transit Developing Countries of South Asia held on April 3–4, 2003. Rajkarnikar, P. R. (2010). Adequacy and effectiveness of logistic services in Nepal: Implication for export performance. In Working Paper 7910, ARTNeT. https://www.unescap.org/resources/ade quacy-and-effectiveness-logistic-services-nepal-implication-export-performance-awp-no Sharma (Kandel), D. P. (2009). Nepal’s trade during Rana period. Ratna Pustak Bhandar. United Nations. (2022). Importance of key trade and transport convention. UN-OHRLLS, UNECE and IRU. https://www.tralac.org/images/docs/9951/importance-of-key-trade-and-transport-con ventionsfor-lldcs-background-note-un-ohrlls-wto-june-2016.pdf World Bank (2018, July 24). Logistics performance index, 2018. World Bank Group. https://ope nknowledge.worldbank.org/bitstream/handle/10986/29971/LPI2018.pdf

Chapter 6

BIMSTEC and India’s “Act East” Policy: Implications for Sri Lanka Chulanee Attanayake

Abstract In 2018, the Sri Lankan Government mentioned that Sri Lanka is looking east in its foreign policy engagement. What Sri Lanka meant by its “Look East Strategy” was not clear. Yet, it seemed like Sri Lanka was using the term to mean pursuing ties with ASEAN, not to counter Chinese influence, but to strengthen its own bilateral relationships and gain intrinsic benefits. In general, the terminology “Looking East” is associated with India in its economic relations with the South East Asian region. The Look East Policy which originated in the 1990s was upgraded to Act East in 2014 giving greater emphasis on strengthening economic, security and strategic partnership with ASEAN countries. In parallel to launching “Act East” policy in 2014, India also rejuvenated the BIMSTEC which had been relatively dormant and inactive for decades since inception. As a founding member of BIMSTEC, this has opened opportunities for Sri Lanka to engage with the South East Asian countries. This chapter explores how India’s Act East Policy and BIMSTEC rejuvenation can be a platform to realize Sri Lanka’s foreign policy objectives of engaging with South East Asia. Keywords Sri Lanka and South East Asia · BIMSTEC · Bay of Bengal region

Introduction In 2018, the Sri Lankan Government declared that it would look towards the east in its foreign policy engagement. While signing the Free Trade Agreement with Singapore, the first of its kind with a South East Asian country, the then-Minister of Development Strategies and International Trade, Malik Wickremesinghe mentioned that the agreement was part of the government’s “broader Look East strategy” (Kurukulasuriya, 2018). What Sri Lanka meant by its “Look East Strategy” was not clear. Given C. Attanayake (B) School of Social Sciences, Media, Film and Education, Swinburne University of Technology, Melbourne, Australia e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 L. Ghosh and A. B. R. Chaudhury (eds.), India’s Relations with Neighboring South and South East Asian Countries, Dynamics of Asian Development, https://doi.org/10.1007/978-981-99-4610-5_6

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how strong Sri Lanka’s ties with China are and given how Colombo does not share any dispute with Beijing, there seems to be no security or strategic imperative for Sri Lanka to develop a strategy similar to that of India. Yet, it seemed like Sri Lanka was using the term to indicate pursuing ties with ASEAN, not to counter Chinese influence, but to strengthen its own bilateral relationships and gain intrinsic benefits. Geographically, Sri Lanka is located close to the South East Asian region. Even though it is now considered a part of South Asia, it was invited to join the Association of South East Asian Nations (ASEAN) in 1967 (Kodikara, 1992; Suryanarayan, 2011). While it did not materialize at the time due to Sri Lanka’s contemporary foreign policy, when Sri Lanka’s political leadership became interested in joining the ASEAN in 1981, the organization’s policy was changed to restrict membership to countries that were truly within the geographical boundaries of the South East Asian region. In general, the terminology “Looking East” is associated with India in its economic relations with the South East Asian region. The concept originated in the 1990s and also includes strategic objectives associated with countering China’s influence in the region. It was upgraded to “Act East” in 2014, giving greater emphasis on strengthening economic, security and strategic partnership with ASEAN countries. In the meantime, India has been pushing towards greater corporation within the Bay of Bengal region. As such, India has taken the leadership to revive the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). The two initiatives are complementary to each other in realizing India’s foreign policy goals. With Sri Lanka’s emphasis on having a dual identity as an Indian Ocean nation and a South Asian nation in recent years, and with its active engagement in regional settings such as the BIMSTEC, Colombo has shown renewed interest in engaging with South East Asian countries. Colombo has gradually deepened its bilateral trade with ASEAN nations: between 2009 and 2019, bilateral trade has grown by 108%. The bilateral trade between ASEAN and Sri Lanka was US$2,155 in 2009 and increased to US$4,487 million in 2019 (Pabasara, 2020). While Sri Lanka is importing mineral fuels and oil, rubber and machinery from the South East Asian region, it is exporting apparel, electrical machinery, natural pearls and tea. Even so, there is greater potential for Sri Lanka in terms of the growing influx of investment and tourism from ASEAN. Amidst this backdrop, this paper will explore how India’s “Act East” policy and BIMSTEC initiative will provide an opportunity for Sri Lanka to extend its relations within the Bay of Bengal region and South East Asia.

Sri Lanka Looking East Sri Lanka’s foreign relations with South East Asia go back to the fifth century and are connected to its maritime history. As a key seaport situated in the middle of the maritime trade route between the east and the west, Sri Lanka formed a network of trade links with Indonesia, Thailand and Vietnam (Pabasara, 2020). As

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historical chronicles reveal, Sri Lanka formed its first diplomatic ties with Burma (Myanmar), initiated by Sri Lankan King Vijayabahu I (1055–1110) with Burmese King Anawrahta (1044–1077) through the exchange of envoys (Pabasara, 2020). The island nation also had close ties with Siam (Thailand), Laos and Cambodia that eventually expanded across different dimensions, particularly in the areas of trade, religious and philosophical ideologies, political and diplomatic relations (Pabasara, 2020). However, historical relations did not immediately translate into diplomatic ties in the contemporary era. Even though there were calls for Sri Lanka to join the ASEAN at the time of its inception in 1967, some South East Asian countries had reservations regarding this invitation. Contemporary relations continued to be based on religious ties. Its ties with the countries in the region are mostly based on Buddhist diplomacy. Sri Lanka has strong Buddhist diplomatic relations with Thailand, Myanmar and Cambodia. Buddhism has played a critical role in longstanding diplomatic relations with these countries. Buddhist ties continued to prosper even during the colonial period. As such, monasteries between Thailand and Sri Lanka have been in close contact even during the nineteenth century (Walpola, 2022) and Thailand’s monasteries have played a significant role in preserving Buddhism in Sri Lanka during the colonial period. The religious ties continue even today with Buddhist envoys from both Sri Lanka and Thailand frequently visiting one another. Similar to Thailand, Sri Lanka has strong religious ties with Cambodia dating back to history. Sri Lankan Buddhist monks have been instrumental in reviving Buddhism in Cambodia after it recovered from the brutal rule of Pol Pot Khmer. Thousands of Buddhist monks were either killed or disrobed, and Buddhism was almost wiped out during this period. Following the end of Pol Pot rule, Buddhist monks have actively worked in Cambodia for the revival of Buddhism by building Buddhist Centres and educating and training monks. Sri Lanka built an International Cambodian Buddhist Centre in Kaduwela, Sri Lanka, to provide residential facilities to Cambodian Buddhist monks in pursuing primary, secondary and tertiary education. The centre which reflects Cambodian architectural and art and craft traditions is also designed to enhance the Sri Lankan-Cambodian historical relationship (Perera, 2019). Despite having historical trade ties, Sri Lanka’s trade relations with the region remain underexploited. A key turning point in Sri Lanka moving towards South East Asia was in 2007 when Colombo joined the ASEAN Regional Forum (ARF). Formed in 1994, ARF was established to foster dialogue and consultation on political and security issues in the Asia–Pacific region. This has opened new avenues for Colombo to engage in efforts to strengthen regional cooperation in selected areas, such as political and security concerns. Currently, Sri Lanka is also looking at obtaining a sectoral dialogue partnership in order to better connect with the region Daily FT (2019). On ASEAN’s part, it sees cooperation with Sri Lanka as a tool to enhance engagement in countries in the Indian Ocean Region. Sri Lanka’s central position in the

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Indian Ocean makes it a focal point in vibrant maritime connectivity and counterterrorism. It can be a core centre for close bilateral interactions between maritime security agencies and anti-narcotic agencies. The past and current status of Sri Lanka’s economic relations with ASEAN and its members highlight missed opportunities for Sri Lanka and prospects for deepening cooperation. Sri Lanka’s recent access to the South East Asian region has been via the Bay of Bengal region. It is a founding member of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and has held the chairmanship two times in 2002–2003 and 2018–2020. During its chairmanship, it has promoted the political commitment of member states to intensify subregional cooperation, facilitated the finalization of the BIMSTEC Charter after 23 years and held numerous working committee meetings and senior official meetings. During the fourth Summit, the then-President Maithripala Sirisena emphasized that the BIMSTEC countries have shared aspirations for growth, development, commerce and technology and that Sri Lanka would facilitate this natural platform to implement regional connectivity and economic cooperation. However, like with ASEAN, Sri Lanka has not succeeded in reaping the full potential of the regional grouping to realize its economic and foreign policy objectives. Despite being connected to one of the largest groups of markets, Sri Lanka still has a limited trade relationship with the BIMSTEC countries. While it shares many common challenges such as climate change, Colombo has failed to collaborate with the region to come up with common solutions. Even though Sri Lanka has strong ties with Thailand and Myanmar which are members of the BIMSTEC, it has not yet succeeded in gaining the advantage of the relationship to extend its connectivity with the ASEAN. Against this backdrop, India’s “Act East” policy and the BIMSTEC have the potential of facilitating Sri Lanka to realize these lost opportunities.

India’s “Act East” Policy and BIMSTEC Engagement From Look East to Act East Launched in 1991, India’s “Look East” is part of a concerted effort to elevate the strategic importance of South East Asia in the country’s foreign policy agenda. According to Indian scholars and policymakers, it has evolved through various phases, with an accelerated pace and a process of interaction in moving from one phase to the next (Bajpaee, 2017: 348–372).After rebranding the “Look East” policy to an “Act East” policy. India has broadened and deepened its policy beyond its initial geographic focus on South East Asia to encapsulate the broader East Asia and now, Indo-Pacific region. “Act East” is targeted to expand beyond its initial focus on economic integration towards greater political interaction and security cooperation.

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After the end of the cold war period, India renewed its re-engagement with South East Asia by operating on multiple fronts by complementing its longstanding historical, cultural and ideological links with the region (Bajpaee, 2017). In this context, New Delhi placed greater emphasis on substantive engagement, thereby increasing the importance of South East Asia in India’s foreign policy agenda. Thus, in subsequent years since the launch of the “Look East” policy trade and investment relations with South East Asia have grown. New Delhi joined ASEAN as a sectoral partner and became a full member in 1994. In addition to participating in annual summits, it has conducted more than 30 sectoral dialogue mechanisms and seven ministerial-level interactions as of today. The decade that followed in the 2000s saw India’s Look East Policy gaining momentum through institutionalized linkages. The commencement of the ASEANIndia Summit-level partnership in 2002, the conclusion of a Framework Agreement on Comprehensive Economic Cooperation; a Joint Declaration on Cooperation in Combatting International Terrorism; and India’s accession to ASEAN’s Treaty of Amity and Cooperation agreements at the 2003 Bali Summit signified New Delhi’s deepening ties with ASEAN region via economic, security and political levels. The revamping of “Look East” to “Act East” in 2014, marked a new era of regionalism for India and engagement with South East Asia. Following the election victory of Prime Minister Narendra Modi, the “Act East” policy was unveiled at the ASEAN-India Summit in November 2014 (Kesavan, 2020). Modi indicated that his government would renew India’s external engagement to parallel and complement a renewed domestic reform momentum: “A new era of economic development, industrialization and trade has begun in India. Externally, India’s ‘Look East’ Policy’ has become ‘Act East Policy’” (Taw, 2014). This new rebranding emphasized close linkages between India’s foreign policy and domestic developmental aspirations. A development-driven agenda via Look East has placed emphasis on connectivity, including infrastructure, people-to-people contacts and trade. As such, many subregional multilateral fora such as the Mekong– Ganga Cooperation (MGC) and the Bay of Bengal Initiative for Multi-sectoral Technical and Economic Cooperation (BIMSTEC), were revived and revamped. India views facilitating connections between existing regional fora such as the BIMSTEC, MGC, SAARC and Indian Ocean Rim Association to be fruitful in interregional connectivity.

BIMSTEC Within “Act East” Policy Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is viewed as a subset of the Indo-Pacific growth region. It is widely regarded as a product of the convergence of India’s “Look East” policy and Thailand’s “Look West” policy (Kumar, 2020: 187–210).It is also considered as a bridge between South Asia and South East Asia and it is a natural affiliation between SAARC and ASEAN.

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Parallel to launching the “Act East” policy in 2014, India also rejuvenated the BIMSTEC which had been relatively dormant and inactive for decades since its inception. The objective was to exploit the untapped trade opportunities, promote energy and food security and also boost the development of its north-eastern region by enhancing infrastructural connectivity with South East Asian countries and promoting greater economic integration in the Bay of Bengal region. Prime Minister Modi enunciated the fact that BIMSTEC and India’s role in it was an intersection of its attempt to put “Neighbourhood First” and “Act East” as the BIMSTEC connects South Asia to South East Asia (Padmaja, 2017). The recent years have seen New Delhi intensifying its efforts for regional collaboration by identifying its regional borders and shifting the focus of its foreign policy from South Asia to South East Asia, East Asia, Central Asia, West Asia and beyond (Kumar, 2020). As a result of this approach, India developed the way for the revitalization of BIMSTEC and MGC. The efforts came as a response to various regional political developments in South Asia, including the non-functionality of SAARC and strategic and security concerns vis-à-vis Pakistan and China. For India, BIMSTEC serves the dual purpose of connecting with the South East Asian region and South Asia sans Pakistan. It is a well-known fact that India-China rivalry has led to the failure of SAARC as a regional organization. However, Sri Lanka, Nepal, Bhutan and Bangladesh, who are members of SAARC, are also members of the BIMSTEC. Several members of the BIMSTEC are also members of the ASEAN, and they have increasing economic and strategic interests in the security and prosperity of the Bay of Bengal region. Hence, in the BIMSTEC, India is given an alternative platform to connect with its neighbours and the South East Asian region simultaneously.

Opportunities for Sri Lanka As an island economy, Sri Lanka’s connectivity to the South and South East Asia region has been via its seaport in Colombo. While recent port expansions have facilitated improved trade relations, it is yet to reach its potential in terms of trade and investment and connectivity. Given its closed proximity and connectivity with India, being an active member of the BIMSTEC, India’s “Act East” policy and rejuvenation of the BIMSTEC can serve Sri Lanka’s foreign policy and economic interests.

Opportunities for Regionalism Regionalism is a key component of international engagement for small states as it offers them the opportunity to enjoy some form of equal status and varying levels of influence. They are important vehicles for small states in overcoming their economic, security and socio-political challenges. For the small states, safeguarding survival

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is an utmost priority; hence, internationalism and regionalism provide them with a positive framework. Small states get to enjoy a sense of acceptance and share responsibility in addressing international affairs (Thambipillai, 2008: 80–94). Sri Lanka, in the absence of SAARC as a platform to exercise regionalism, requires new platforms to exercise its regionalism. The continuous tension between India and Pakistan has prevented SAARC from making any substantial progress for over three decades. The recent tension between the two South Asian neighbours has dashed any hope of it being revived. This has resulted in India prioritizing BIMSTEC as a strategic move to bypass the SAARC. At the centre of India’s “Look East” policy, BIMSTEC has become the central organization for collaboration in the region (Hazarika, 2019). In this context, BIMSTEC offers Sri Lanka too, an opportunity to maximize its regionalism efforts and connect with both the South and South East Asian regions.

Opportunities for Trade and Investment India’s emphasis on the BIMSTEC and “Act East” policy also offers Sri Lanka the opportunity to enhance its trade relations with the Bay of Bengal and the South East Asian region. BIMSTEC provides South Asian countries with a conduit for economic cooperation with East Asian countries and a link to East Asian production networks and value chains (Kelegama, 2017). Even though being part of the BIMSTEC has given Sri Lanka access to 21% of the global market (Kelegama, 2017), its trade connectivity with the region is at a bare minimum. BIMSTEC contributes to only 23% of Sri Lanka’s total imports and seven per cent of its total exports. Moreover, more than 70% of this trade is accounted for by India (de Zylva & Hundlani, 2018). Similarly, Sri Lanka’s bilateral trade with ASEAN has experienced only limited growth. According to available statistics, bilateral trade in goods amounted to USD 4487 million, accounting for 13.4% of Sri Lanka’s total goods traded in 2019. Exports to ASEAN amounted to USD 396 million accounting for four per cent of Sri Lanka’s total exports. This can be compared to imports worth USD 4091 million from ASEAN which accounted for 17.4% of Sri Lanka’s total imports in 2019. Despite having bilateral investment treaties with five ASEAN members, the total value of FDI received from the ASEAN has decreased. According to available data from the Central Bank of Sri Lanka, FDI which totalled USD 257 million in 2016, has reduced to USD 201 million in 2017, USD 159 million in 2018 and USD 152 million in 2019. Compared with South East Asia, Sri Lanka has stronger integration with South Asia, in particular with India, as evident by a number of bilateral and multilateral preferential trade agreements. As such, Sri Lanka can use its links and connectivity with India’s production network to access the ASEAN market. Among the South Asian countries, India positioned itself within the top ten import origins for ASEAN imports and its export share continued to increase in recent years. India’s merchandise trade with ASEAN is around three per cent as opposed to a negligible zero-point one per cent of total merchandise trade in 2019. In the meantime, India has launched

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policies such as “Make in India” to place itself as a global production hub. If India’s “Make in India” initiative is successful, Sri Lanka has an opportunity to connect to those value chains and expand trade with India. As part of “Act East” policy and BIMSTEC, India is also promoting connectivity, be it technological connectivity, transport and logistics or people-to-people connectivity. Recent years saw India making significant investments in ports, roads and railways to facilitate trade connectivity in the Bay of Bengal region. Investments in Kaladan port, Trilateral highways between Moreh in India and Mae Sot in Thailand via Myanmar and the Aizawl–Tuipang highway are cases in point (Padmaja, 2017). These connectivity projects have the potential of enforcing India’s position in the region as a gateway between South and South East Asia. Given its proximity to and integration into the Indian market, Sri Lanka gains the opportunity to utilize this gateway to be an important part of the South East Asian economy.

Conclusion Given its geographical proximity and economic integration, Sri Lanka has the opportunity to gain benefits from India’s connectivity strategies such as the “Act East” policy. Even though Sri Lanka is a member of the BIMSTEC and has the ability to use the platform to connect with the South East Asian region, it can only be optimized with active participation from India. Compared to India, Sri Lanka has limited resources and capabilities in reviving a regional platform like the BIMSTEC. Now that India has included BIMSTEC as part of its Act East Policy, the once dormant organization is rejuvenated to fulfil its full potential.

References Bajpaee, C. (2017, August 31). Dephasing India’s ‘Look East’/‘Act East’ policy. Contemporary Southeast Asia, 39(2), 348–372. https://doi.org/10.1355/cs39-2d De Zylva, A., & Hundlani, D. (2018, April 4). BIMSTEC and Sri Lanka: A potential agenda for 2018–2020. The Lakshman Kadirgamar Institute. https://lki.lk/publication/bimstec-and-srilanka-a-potential-agenda-for-2018-2020/#C3 Govt. wants SL included as ASEAN dialogue partner. (2019, August 10). Daily FT. https://www. ft.lk/Front-Page/Govt-wants-SL-included-as-ASEAN-dialogue-partner/44-683722 Hazarika, O. B. (2019, July 7). BIMSTEC in India’s Act East Policy. Kalinga Institute of Indo-Pacific Studies. http://www.kiips.in/research/bimstec-in-indias-act-east-policy/ Kelegama, S. (2017, June 6). Regional economic integration in the Bay of Bengal. Talking Economics, Institute of Policy Studies Sri Lanka. https://www.ips.lk/talkingeconomics/2017/ 06/06/regional-economic-integration-in-the-bay-of-bengal/ Kesavan, K. V. (2020, February 14). India’s ‘Act East’ policy and regional cooperation. Observer Research Foundation. https://www.orfonline.org/expert-speak/indias-act-east-policyand-regional-cooperation-61375/

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Kodikara, S. U. (1992). Foreign policy of Sri Lanka: a third world perspective. Chanakya Publication. Kumar, S. (2020, August 14). Reinvigoration of BIMSTEC and India’s economic, strategic and security concerns. Millennial Asia, 11(2), 187–210. https://doi.org/10.1177/0976399620925441 Kurukulasuriya, L. (2018, February 1). Does Sri Lanka’s ‘Look East’ strategy to court ASEAN make sense? The Diplomat. https://thediplomat.com/2018/02/does-sri-lankas-look-east-strategy-tocourt-asean-make-sense/ Pabasara, C. (2020, July 15). A stocktaking of Sri Lanka-ASEAN relations: Implications post COVID-19. LKI POLICY BRIEFS, policy briefs series: No.25, July, 2020. The Lakshman Kadirgamar Institute of International Relations and Strategic Studies. https://lki.lk/publication/ a-stocktaking-of-sri-lanka-asean-relations-implications-post-covid-19/ Padmaja, G. (2017, October 6). BIMSTEC: where India’s ‘Neighbourhood First’ and ‘Act East’ meet. National Maritime Foundation. https://maritimeindia.org/bimstec-where-indias-neighb ourhood-first-and-act-east-meet/ Perera, J. (2019, March 10). Sri Lanka and Cambodia join hands to empower Buddhist communities. IDN-InDepthNews. https://www.indepthnews.net/index.php/the-world/asia-pacific/2544sri-lanka-and-cambodia-join-hands-to-empower-buddhist-communities Pieris, K. (2005, September 5). Trade in ancient and Medieval Sri Lanka. Daily News. http://arc hives.dailynews.lk/2009/03/23/fea13.asp Suryanarayan, V. (2011, December 27). Sri Lanka: Fresh insights on attempts to join ASEAN— Analysis. Eurasia Review. https://www.eurasiareview.com/27122011-sri-lanka-fresh-insightson-attempts-toTaw, N. P. (2014, November 12). India, ASEAN can be great partners: Modi. Hindustan Times. https://www.hindustantimes.com/india/india-asean-can-be-great-partners-modi/storyEvYECobHDArNyyS4TUFBgP.html Thambipillai, P. (2008, January 2). Brunei Darussalam and ASEAN: Regionalism for a small state. Asian Journal of Political Science, 6(1), 80–94. https://doi.org/10.1080/021853798084 34116 Walpola, T. (2022, June 13). Buddhist diplomacy highlights historic Lanka-Thailand relations. The Island. https://island.lk/buddhist-diplomacy-highlights-historic-lanka-thailand-relations/ Xavier, C. (2021, January 15). Connect East: Explaining India’s BIMSTEC focus. Observer Research Foundation. https://www.orfonline.org/expert-speak/connect-east-explaining-indiasbimstec-focus/

Chapter 7

India’s Act East Policy and Neighbouring Powers: India-Myanmar Relations Thinn Thinn Latt

Abstract The relations between India and Myanmar are strategically important as there is a long borderline between the two countries on both land and maritime borders. Literature, culture and religion have been intertwined between Myanmar and India for thousands of years. They have enjoyed more than 70 years of diplomatic relations since India and Myanmar began formal relations in 1948. Both the countries continued to strengthen their warm relations since the 1990s when India adopted the Look East Policy. One key factor underlying for current importance of IndiaMyanmar relations is India’s Act East Policy launched in 2014. India emphasizes that Myanmar is a priority friend of India in its both Eastward Policy and Neighbourhood Priorities. Myanmar also wants to seek greater engagement with India although its reliance on China continues to be profound. Myanmar’s Government is keen to attract India’s investments and counterbalance Chinese influence in the region. India’s cultural connectivity with Myanmar is a key step toward forging strong relations between them. India’s engagement with Myanmar includes ICT, Food Processing, Hydrocarbons, India-Myanmar-Thailand trilateral highway, military, and defense exercise and last but not the least educational sectors like IT and research. Myanmar wants deeper activities from India to deepen its relations. Keywords AEC · ASEAN · KMMTT · SEZ · Sittwe

India’s Act East Policy and Neighbouring Powers: India-Myanmar Relations Myanmar is one of the strategically important partners for India. Geographically, Myanmar borders India’s four northeastern states of Arunachal Pradesh, Nagaland, Manipur, and Mizoram, sharing 1643 km land border between the two countries and T. T. Latt (B) Former Associate Professor, Department of International Relations, Dagon University, Yangon, Myanmar e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 L. Ghosh and A. B. R. Chaudhury (eds.), India’s Relations with Neighboring South and South East Asian Countries, Dynamics of Asian Development, https://doi.org/10.1007/978-981-99-4610-5_7

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the 725 km-long maritime border. The geographical proximity of the two countries has helped develop and sustain cordial relations and facilitated people-to-people contact. Literature, culture, and religion have been intertwined between Myanmar and India for thousands of years. Modern India-Myanmar relations began on January 4, 1948, with the establishment of formal diplomatic relations between them. India and Myanmar signed a Treaty of Friendship in 1951 (MEA, 2012). The foundations for strong diplomatic relationship between India and Myanmar were established in 1987 following Indian Prime Minister Rajiv Gandhi’s visit to Myanmar. India-Myanmar relations officially got underway with the signing of a number of agreements aiming to promote bilateral cooperation between the two countries. During more than 70 years of diplomatic relations, India-Myanmar relations have taken many ups and downs. However, since the 1990s, India’s foreign policy has gradually shifted from a nominal ideology to a pragmatic one and India began to establish warmer relations between the two countries. According to Professor Prabir De, India framed its “Look East” policy in 1991 with the view to developing economic integration, political associations, and security cooperation with South East Asian countries. “With a view to fostering greater economic integration with South East, South and East Asian nations, India expanded the horizon of its Look East Policy to ‘Act East Policy’ (AEP)” in 2014 (De, 2020). Following Antara Ghoshal Singh, Taneja et al. hold that gradually the policy went on to encompass India’s engagement with Japan, the Republic of Korea, and China and in recent years. India’s outreach in the Asia Pacific has extended to Australia, New Zealand, and the Pacific Island Countries. AEP underlines “the need for a more action-oriented policy to deepen India’s focus on the countries to India’s east. At the same time, the policy is increasingly projected as the new economic development strategy for India’s North Eastern Region (NER) and the policy objective is the economic integration of the region with South East Asia” (Taneja et al., 2019: 1). Myanmar has an important role to play as regards India’s policy of economic development of NER, which shares a 1643 km-long border with Myanmar’s Sagaing Region and Chin State. The four NER states that share borders with Myanmar are Arunachal Pradesh (520 km), Manipur (398 km), Mizoram (510 km), and Nagaland (215 km). According to Taneja et al., “this geographical proximity provides an opportunity for these hitherto economically isolated states and their sisters (Assam, Meghalaya, Sikkim, and Tripura) to leverage the economic opportunities and markets in the east, building on their strong historical economic and socio-cultural associations with Myanmar” (Taneja et al., 2019). India’s holistic “SAGAR” (Security and Growth for All in the Region) policy envisioned by Prime Minister Narendra Modi aims to pursue and promote India’s geo-political, strategic and economic interests on the seas, particularly in the Indian Ocean. The Prime Minister has emphasized India’s policy perspective on the Indo-Pacific, which is based on the principles of “inclusiveness”, “openness” and the concept of “ASEAN centrality” (De, 2020).

Moreover, as Ambassador Rajiv Bhatia stresses, AEP is also a conscious upgradation of LEP and “a calibrated response to the changing situation in the region as

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well as to the evolution of India’s priorities in its economic and security strategies”. In his contention, the Modi government has made a conscious effort to blend India’s economic, political and strategic imperatives in its perusal of AEP. “The focus is on accelerating economic growth, connectivity with ASEAN and beyond, and maritime security” (Bhatia, 2016). In this context, Myanmar is important to India because it is the only ASEAN nation sharing both land and maritime borders with India. As has been argued, it, therefore, is a “gateway” to South East Asia (Atmakuri & Izzuddin, 2020). In India’s effort to strengthen its trade, investment and other forms of economic cooperation with ASEAN through its free trade agreement (FTA) with ASEAN and the formation of the Regional Comprehensive Economic Partnership (RCEP), Myanmar has a vital strategic importance. “Being the only country that sits at the intersection of India’s ‘Neighborhood First’ policy and its ‘Act East’ policy, Myanmar is an essential element in India’s practice of regional diplomacy in the Indo-Pacific, and serves as a land bridge to connect South Asia and South East Asia” (Atmakuri & Izzuddin, 2020). From India’s perspective, Myanmar is a nation of considerable importance as a partner capable of cooperation for the security and development of India’s northeast, and as Rajiv Bhatia comments, as a strategic “buffer state” in the context of the “China factor”, as a key constituency for our AEP, and as an attractive market as well as an economic partner. The New Light of Myanmar put it aptly in its editorial dated 30 May 2012: “In fact, India needs Myanmar, and Myanmar also needs and that is the common ground” (Bhatia, 2016). From Myanmar’s point of view, although it had closer relations with China and increasingly relied on it over many decades, it sought to strengthen its links with India in the last decade. With this strategy in mind, the Myanmar Government has sought to reduce the prodigious Chinese influence on its economy by diversifying its economic partners. Therefore, Myanmar has also actively sought to engage with AEC. AEC would provide Myanmar with an opportunity to reduce its reliance on China and enhance its economic development and security prospects by cooperating with India. As a result, bilateral relations between the two countries have picked up, with visits at the highest levels, ministerial levels, and functional levels in the six years. Apart from high-level visits, they have also engagements in different areas, including regular foreign office consultations, joint working groups in different sectors, and in general our engagement with India has been increasing over the last few years. Myanmar has had greater engagement with India after Indian Prime Minister Narendra Modi won re-election in May 2019. Prime Minister Modi’s prioritization of BIMSTEC in his second term can be evinced in his invitation for his second inauguration to the members of BIMSTEC (Bay of Bengal Initiative for MultiSectoral Technical and Economic Cooperation), which is a minilateral subregional organization that is committed to fostering bilateral or regional cooperation among the Bay of Bengal countries. Myanmar is an important member of the BIMSTEC. Therefore, in Atmakuri and Izzuddin’s analysis, it is in India’s geostrategic interest to see Myanmar prevail as

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a stable and autonomous country, thereby making possible greater bilateral engagement in India-Myanmar relations. India has vowed to engage with Myanmar through five “C’s”: Connectivity, commerce, capacity building, culture and community (The Irrawaddy, 2020, March). Such a strategic partnership is laudable.

Connectivity Joe Kumbun, in an article in The Irrawaddy reports that as a part of the connectivity pillar, land-border crossing points have been opened at Tamu-Moreh (between Sagaing Region and India’s Manipur State) and Rihkhawdar-Zokhawthar (between Chin State and India’s Mizoram State) (Kumbun, 2020) in August 2018. Infrastructure at both these land-border crossing points is being developed. The Tamu-Moreh and the Rihkhawdar Zowkhawthar border posts have been equipped with trade and immigration facilities. Additionally, demand for providing similar facilities near the Panfsau Pass in Nampong has increasingly arisen. Furthermore, according to Bipul Chatterjee and Prashant Sharma, “In accordance with the 2018 Bilateral Land Border Crossing Agreement, free movement of the local people within 16 km of the respective border with a border pass is allowed. It enables a better access to the Burmese people from across the border to India’s healthcare infrastructure, among other facilities” (Chatterjee & Sharma, 2020). The Kaladan Multi-Modal Transit Transport Project (KMTTP) is being envisaged as a multimodal transport corridor in order to accelerate cargo shipping from eastern and northeastern India via Myanmar. This corridor aims to connect the eastern Indian seaport of Kolkata with Sittwe deep-water port in Rakhine state in Myanmar by sea. This is one of the most significant connectivity initiatives undertaken by India in its effort to provide developmental assistance to Myanmar. As part of the initiative, some steps have been taken: • M/s A to Z Exim has been appointed as port operator, giving them the responsibility for operations and maintenance of Sittwe Port, Paletwa Inland Water Transport Terminal and associated facilities. • Construction of a 109 km of road from Paletwa to Zorinpui. • It is hoped by both India and Myanmar that the Sittwe Port will become operational from the first quarter of 2021. • The 120 km-long Kalewa-Yargi sector is being upgraded by India. • 69 bridges are being constructed on the Tamu-Kyigone-Kalewa sector of the India-Myanmar-Thailand Trilateral Highway (The Irrawaddy, 2019). The JWG on shipping met twice—the first on 18 October 2012 and the second on 5 November 2020—to continue discussions on the operations of the Kaladan project; direct shipping; Coastal Shipping Agreement; LRIT; capacity building, etc., for increased cooperation in the shipping sector. There is also a possibility of signing a Coastal Shipping Agreement with Myanmar. To boost connectivity efforts, new air routes between Yangon and major cities of Myanmar and important Indian cities like

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Kolkata were being introduced, for example, daily flights on the Kolkata-Yangon sector by IndiGo from September 2019. The India-Myanmar-Thailand Trilateral Motor Vehicle Agreement (IMT MVA) was signed in the same year in Bangkok. Myanmar also expressed its readiness to negotiate Bilateral Motor Vehicle Agreement on the finalization of IMT MVA. Bus service between Imphal and Mandalay, postponed due to COVID-19 pandemic, is also on the anvil.

Commerce Myanmar has been one of India’s major trading partners for a long time. According to a report by the Embassy of India at Yangon, dated 31 December 2020, since the signing of the India-Myanmar trade agreement in 1970, bilateral trade has grown steadily from US$ 328 million in 1997–98 to US$ 921.19 in 2006–7; US$2.18 billion in 2013–14 and US $2.17 billion in 2016–17 and stands at US$ 1.52 billion in 2019–20 (Embassy of India, 2020). In 2018, India ranked 4th in Myanmar’s imports with a share of 5.12%, and on Myanmar’s exports, India’s share has been varying annually and it ranked 4 with a share of 3.44% (Seshadri, 2020). However, again according to the report, bilateral trade declined by − 11.93% in 2019–20 over 2018– 19. India’s imports from Myanmar have risen by 4.94%, though India’s export to Myanmar declined by − 19.22% during 2019–20 over the previous year’s trade figures. Therefore, India became the 5th largest trade partner of Myanmar (Embassy of India, Yangon, 2020). Myanmar is also the second largest exporter of beans and pulses to India. “The total value of beans and pulses exported to India in 2016–17 amounted to US$ 809.45 million, US$ 370.43 million in 2018–19 and US$ 344.07 million in 2019–20” (Embassy of India, Yangon, 2020). However, pulses export has declined somewhat following India imposing quantitative restrictions to protect its own farmers. The report also claims that timber and wood articles, which are among one of the top exports from Myanmar to India, have also declined from 50% in 2013–14 to about 14% in 2019–20 at 75.47 million following the imposition of ban on exports of logs from Myanmar from April 2014 by the government (Embassy of India, Yangon, 2020). With the opening of Myanmar’s economy, there have been new entrants who are pursuing aggressive trade and investment opportunities. As a result, bilateral trade, investment and other forms of economic cooperation with Myanmar have become diversified. This has been evident in Indo-Myanmar trade links also. According to figures provided by the Embassy of India at Yangon, India exports pharmaceuticals products (increased from US$ 50 million in 2010 to US$ 221.78 Million in 2019– 20 which is about 38% of the market share in Myanmar), steel and iron products, electrical machinery, vehicles other than railways, machinery and equipment, cotton and yarn, plastics, etc. (Embassy of India, Yangon, 2020). In certain years, significant levels of sugar and refined petroleum products have also been exported, depending on demand (Seshadri, 2020). India is also looking towards exporting agricultural

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machinery, agrochemicals, electrical goods, investment in plantations, ICT and ITrelated products and services.

Investment I Indian companies have exhibited considerable interest to invest and do business in Myanmar. Among recent initiatives have been the development of a container terminal by an Indian company, Adani Ports and Special Economic Zone [APSEZ] with an approximate investment of around US$280 million (The Irrawaddy, 2019). In the investment sector, 33 Indian ventures worth 771 million began operating in Myanmar by the end of January 2020. The Indian government has extended air, land and sea routes to strengthen trade links with Myanmar. It has also set up a gas pipeline. Though India’s private sector investment has been low and growing at a slow pace, both governments have been working towards increasing cooperation in agriculture, telecommunication, information technology, steel, oil, natural gas, hydrocarbons and food processing. As the Indian Ambassador to Myanmar, Saurabh Kumar, commented, “This cooperation in the area of capacity building and training is also picking up, and at the base of all is cultural links and people-to-people exchanges” (The Irrawaddy, 2019). The Embassy of India report claims that according to the Government of Myanmar’s statistics, “India is presently the eleventh largest investor with an approved investment of US$ 773.038 million by 34 Indian enterprises, out of the total estimated investments of US$ 87.501 billion from 51 countries (as on November 2020) (Embassy of India, Yangon, 2020). India’s investment in Oil and Gas sector alone is about $1.2 billion, besides other investments. Among the private sector investments from India in recent times, the Ahlone Port Terminal by Adani Group is one of the biggest. With an investment of $ 290 million, once fully operationalized, it will have the capacity to handle 0.6 million TEUs. Indian pharma company Zydus has also set up a unit at Thilawa SEZ. (Embassy of India, Yangon, 2020). The 2020 Report by the Indian Embassy at Yangon also provides a list of companies in other sectors that have been investing in Myanmar. According to this report, some Indian automobile companies have won major contracts/investments in Myanmar. Tata Motors, in association with Myanmar Automobile & Diesel Industries Limited (MADI) and with the GoI support, has begun a truck assembly plant in Magway, Myanmar, which has a capability to deliver 1000 vehicles per year. The plant manufactures “highly flexible chassis & frame assembly line as well as cab manufacturing, painting and trimming activities” (Embassy of India, Yangon, 2020). TVS motors launched two-wheelers dealership in Mandalay and in other small towns. Farm implements and tractors from Sonalika Tractors, New Holland tractor, Escorts have made their mark in Myanmar. In the livestock sector, Skylark Sunline Co. Ltd. has invested to set up its operation in Myanmar. Other projects include:

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• laying of part of the Myanmar China Oil Pipeline Project and Myanmar China Gas Pipeline; • project by the Indian company Punj Lloyd Ltd, along with South East Asia Crude Oil Pipeline Company Limited and South East of Asia Gas Pipeline Company since May 2011 with an estimated total investment of US $ 475 million; • Larson and Toubro are part of the Zawtika Development Project where it is engaged with laying three wellhead topsides and three jackets weighing 7000– 8000 MT with a cost of US$ 250 million in an offshore project at M9 & M11 blocks in the shallow waters (water depth of 130–150 m) of the Gulf of Martaban, Myanmar. It will also lay 21 km of 18 inches of subsea pipelines. • Larson and Toubro are also involved in the engineering procurement fabrication and installation of wellhead platforms and pipelines at Yetagu offshore field with a cost of US$112 million. 1 • Vihaan Networks Ltd. has completed the installation of solar-powered telecommunication tower projects on the 600 km Mandalay-Yangon highway at the cost of USD 5 million. • With the ban of export of unprocessed timber by Myanmar since April 2014, several Indian companies like Centuryply, Greenply Industries, MAK Plywood, B.S Progressive and Fine Ply have set up their wood-based industries in Yangon. As facilitating connectivity is central to improving India-Myanmar economic relations, the two countries inaugurated 250 km Tamu-Kalewa-Kalemyo highway in 2001. The two countries were also keen to provide a major strategic and commercial transport route connecting Northeast India, and South Asia as a whole, to South East Asia. Considering Myanmar to be a “gateway” to the rest of South East Asia, India has also invested in ASEAN-wide infrastructural projects in the ASEAN-India Free Trade Area. 3 According to Atmakuri and Izzuddin, following the same logic, India developed the Sittwe port in Myanmar’s Rakhine state as part of its policy for the Indian Ocean called Security and Growth for All in the Region (SAGAR), central to which is “portled- development” (Atmakuri & Izzuddin, 2020). This Bay of Bengal port is a crucial intersection point of the KMMTT initiative, which aims to connect southwestern Myanmar to northeastern India “by creating a multimodal trinary of sea, river and road transport corridor to boost interconnectivity” (Atmakuri & Izzuddin, 2020). The Indian Foreign Secretary, Harsh Vardhan Shringla and the Chief of the Army Staff of the Indian Army, General Manoj Mukund Naravane, on a visit to Myanmar on 4 and 5 October 2020, reached an agreement with Myanmar that an early operationalization of the Sittwe Port was needed. India also offered $6 billion for establishing an oil refinery and for joint vaccine production, among others (Chatterjee & Sharma, 2020). Reporting on this visit, Nan Lwin claims, “India’s long-term strategic goal is to create a Special Economic Zone surrounding the Sittwe port, and in so doing, cement India’s footprint in Rakhine and boost its presence in the Bay of Bengal” (Lwin, 2020). At the same time, this port will link to the India-Myanmar border and to the Indian side and be a positive one for trade and economic activity in the region concerned.

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Security and defense relations between the two countries focus primarily on border security and counterterrorism. In fact, since India’s independence, the IndiaMyanmar border has been a stronghold of separatist militias in the northeastern states. These militants infiltrate from the Myanmar side into the India side and carry out occasional attacks. India and Myanmar conducted a joint military operation “Operation Golden Bird” along the Mizoram border in April–May 1995 following the signing of a MoU for the maintenance of peace and tranquility in border areas (Ghosh, 2015). To improve economic relations, India and Myanmar seek to boost their security cooperation at the border. To facilitate greater the economic activity a secure border is needed. According to Atmakuri and Izzuddin, Part of the reason why the KMMTT has faced delays is that the route of the project traverses a warzone in Rakhine state, where a battle rages on between the Myanmar Army and the Arakan Army rebels on the one hand, and on the other, the Arakan Rohingya Salvation Army. Insurgents from India’s Nagaland have also disrupted the completion of the KMMTT project. Therefore, the Indian and Myanmar armies have carried out two joint military operations, codenamed Operation Sunshine 1 and 2, to fight militants along the borders of Myanmar’s Rakhine state, which borders India’s four northeastern states. Greater impetus was given to these operations after Prime Minister Narendra Modi visited Myanmar in 2018. (Atmakuri & Izzuddin, 2020)

Between February and June 2019, the two armies launched two phases of joint operations called Operation Sunrise against armed forces based on the border between the two countries (Bhalla, 2019). Cooperation in security sector and defense sector between India and Myanmar has built over a period. As Myanmar is of vital importance to its national security interests, India has been giving military training and conducting joint military exercises with the Myanmar Army like the India-Myanmar Bilateral Military Exercise (IMBAX2017 and IMBEX2018-19). Through such training programmes, India had trained the Myanmar Army so that it was able to participate in UN Peacekeeping Operations. Furthermore, in the interest of enhancing defense relations, India and Myanmar signed a milestone defense cooperation agreement in July 2019 during the visit to India by Myanmar’s Senior General Min Aung Hlaing. As both countries came to understand how important Bay of Bengal had become, the Indian and Myanmar navies conducted a momentous bilateral naval exercise, IMNEX-18, in 2018. India also invited the Myanmar Army to participate in the India-led multilateral Milan naval exercise that occurs biennially in the Andaman and Nicobar Islands, with the next one taking place in March 2020. To bolster the “Made in India” initiative, India has been able to sell to Myanmar India’s first locally-produced anti-submarine torpedo, called TAL Shyena, in 2017, and in 2019, Myanmar acquired a diesel-electric Kiloclass submarine, INS Sindhuvir, which India had modernized after purchasing from Russia in the 1980s. Thus, not only are the two-armed forces engaged at different levels but there exists also a good collaboration between the two governments in terms of maintaining peace in the border areas (Atmakuri & Izzuddin, 2020). In the healthcare sector, two MoUs were signed between the two countries in September 2017: (1) an MoU for cooperation in Medical Products Regulation

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between the Central Drugs Standard Control Organization (CDSCO) and (2) an MoU for cooperation in the field of Health and Medicine. Following the 1st meeting of JWG for this purpose, presided by Nay Pyi Taw and held on April 25, 2019, another MoU was signed between the Indian Council of Medical Research (ICMR), India, and the Department of Medical Research (DMR), Myanmar on 27 February 2020 for Health Research. The process of identifying areas of cooperation and implementation as well as joint production, supply and distribution of the COVID-19 vaccine under a JWG was also set in motion. In terms of capacity building between the two countries, India has some engagements in Myanmar to facilitate democratic transition, such as training of civil servants, district magistrates, township administrators, the police force, officers of the Union Election Commission (UEC) and judicial officers. Moreover, cooperation in this area is also increasing between the two countries through cultural links and people-to-people exchanges. Across the board, the two countries have some ongoing capacity-building programmes. For example, India has collaborated with some Myanmar institutes/centre such as the Myanmar Institute of Information Technology (MIIT) in Mandalay and the Advanced Center for Agricultural Research and Education (ACARE) at Yezin Agricultural University. Moreover, India has committed US$ 5 million every year over a period of five years for socio-economic projects under the framework of the Rakhine State Development Programme and built 250 houses in northern Rakhine for the displaced people to return to. In conclusion, Myanmar is a key pillar of India’s Act East Policy and the two countries have cooperated in various areas over the last five years. India’s AEP plays an advantageous role for Myanmar in meeting its strategic interests specifically from the angle of military engagement. From India’s point of view, this is a crucial area to pitch to Myanmar given that other players cannot provide the military with a reliable edge or alternative in the security dimension. However, there are some challenges in implementing India’s infrastructure projects in Myanmar such as the delays plaguing infrastructure projects, failure to meet deadlines due to weakness of coordination, financial constraints, flawed feasibility studies, question of security. This is especially true in case of local communities and Civil Society Organizations (CSOs) opposed the Kaladan project’s destructive impact on the environment and impacts on local livelihoods. Therefore, both India and Myanmar Governments need to engage with CSOs and local communities to implement and complete these projects on time. India also needs to deepen its engagement in Myanmar beyond just government-togovernment and military-to-military sectors. To foster democracy in Myanmar, India requires to engage with Myanmar political parties—ruling, and opposition—as well as ethnic groups, CSOs, etc., by providing technical support. Moreover, it is better for India to get involved in Myanmar’s peace process by facilitating peace talks. Finally, both India and Myanmar need to cooperate more in education sector development and provide more scholarship programmes for Myanmar’s young leaders who will be the leaders of the future and the drivers of democracy in Myanmar.

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References Atmakuri, A. & Izzuddin, M. (2020, January 8). Why Myanmar should matter to India. The Diplomat. https://thediplomat.com/2020/1/why-myanmar-should-matter-to-india/ Bhalla, A. (2019, June 17). Operation sunrise: India-Myanmar target insurgent groups camp in North East. India Today. https://www.indiatoday.in. Accessed 17 June 2019. Bhatia, R. (2016). India’s Act East Policy and Myanmar’s Role. Lecture delivered on India’s Act East Policy at Jadavpur University, Kolkata on 2016, March 10, as part of the Ministry of External Affairs’ ‘Distinguished Lecture Series’. Gateway House, Indian Council on Global Relations. https://www.gatewayhouse.in/indias-act-east-policy-and-myanmars-role/ Chatterjee, B., & Sharma, P. (2020, October 17). View: Accelerate India-Myanmar economic ties with people at the centre stage. The Economic Times. https://m.economictimes.com. Accessed 17 Oct 2020. De, P. (2020). Act East to Act Indo-Pacific: India’s expanding neighbourhood. KW Publishers Pvt Ltd. Embassy of India, Yangon. (2020). Bilateral economic & commerce brief . https://embassyofindiay angon.gov. Accessed 31 Dec 2020. Ghosh, S. (2015). Operation all clear & golden bird: India’s past campaigns on foreign soil. https:// www.oneindia.com. Accessed 10 June 2015. Kumbun, J. (2020, February 27). Indo-Myanmar ties should go beyond geo-political interests. The Irrawaddy. https://www.irrawaddy.com/opinion/guest-column/indo-myanmar-ties-go-bey ond-geopolitical-interests.html. Accessed 27 February 2020. Lwin, Nan. (2020, October 6). India, Myanmar agree strategic port operation in Rakhine next year. The Irrawaddy. https://www.irrawaddy.com/news/burma/india-myanmar-agree-strategic-portoperation-rakhine-next-year.html. Accessed 17 April 2023. MEA. (2012). India-Myanmar relations. Myanmar. The Ministry of External Affairs, Government of India, New Delhi. https://www.mea.gov.in/Portal/ForeignRelation/myanmar-july-2012.pdf Seshadri, V. S. (2020, October 16). Moving trade and development relations forward with Myanmar. DPG Policy Brief , 5(36). Delhi Policy Group. https://www.delhipolicygroup.org. Accessed 16 Oct 2020. Taneja, N., Naing, T. H., Joshi, S., Singh, T. B., Bimal, S., Garg, S., Roy, R., Sharma, M. (2019). In India’s Act East Policy: facilitating India-Myanmar border trade. Indian Council for Research on International Economic Relations (ICRIER). https://icrier.org The Irrawaddy. (2019, December 13). Myanmar plays a role in New Delhi’s two major foreign policy initiatives: Indian Ambassador. https://www.irrawaddy.com/in-person/myanmarplays-role-new-delhis-two-major-foreign-policy-initiatives-indian-ambassador.html. Accessed 16 April 2023. The Irrawaddy. (2020, 3 March). Editorial. https://www.irrawaddy.com/opinion/editorial/myanmarwill-benefit-deeper-ties-india.html. Accessed 16 April 2023.

Chapter 8

India’s Act East-Thailand’s Go West in the New World Order Piti Srisangnam

Abstract This article explains the interactions of three major players: USA, China, India and South Asia in the global value chains that are breaking/decoupling and amidst the changing world order. Thailand, India and many developing countries will be affected if they do not adjust their trade and investment policies. Accelerating trade negotiations in the more comprehensive and high-standard trading arrangements format will allow Thailand and India to position themselves as the central chain linking this breaking chain. The authors suggest using the RCEP approach to trade negotiations as a model for further development of trade talks. Keywords Global value chain · Multiplex world order · WMD · RCEP · BRI · LSG

Introduction What we are witnessing is not just the post-COVID pandemic era, or the passing of a particular period to the global economic recovery, but the changing of the world order as such: the end point of US hegemonic ability to set and control the rules of international trade and investment as well as the rise of multipolar world where many great powers created new rules based on geopolitical concepts which have at the core the drive for security. The global value chains (GVCs) are being decoupled into two regional value chains (RVCs): the Western RVCs led by US and EU and the Eastern (or Asian) RVCs led by China. Supply chain resiliency is used as a pretext for international trade and investment protectionism policies. In this context, it is necessary for medium-sized economies such as Thailand and large-sized emerging economy such as India to position themselves together as the central chain linking the separated RVCs. Regional Comprehensive Economic Partnership (RCEP), the P. Srisangnam (B) Department of Economics, Chulalongkorn University, Bangkok, Thailand e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 L. Ghosh and A. B. R. Chaudhury (eds.), India’s Relations with Neighboring South and South East Asian Countries, Dynamics of Asian Development, https://doi.org/10.1007/978-981-99-4610-5_8

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world’s largest trade deal available now, may be an important tool to upgrade these India’s Act East-Thailand’s Go West relations to the next level.

Geopolitical Changes: A New World Order in the Making Geopolitics is the study of political effects related to geographical issues, such as landscapes, climates, locations and boundaries, that influence or determine human behaviour and decisions (Johnston, 2000: 353–360), especially in terms of international politics, economic relations and balances of power (Devetak et al., 2017: 816). Notably, the present era is marked by great changes in the global geopolitical landscape and the relationships between various nations, forming a new equilibrium of a “new world order”. This signifies an important turning point in history, characterized by potentially radical shifts in the global balance of power. Such traits are caused by multiple phenomena which lead to grave consequences and are beyond the scope of one nation to handle alone, such as the emergence of new global superpower(s), sudden and radical changes in levels of technological development, environmental and climate crises, the emergence of new and potentially persistent pandemics (Srisangnam et al., 2020). As such, we need to understand the effects of important geopolitical changes and the subsequent adjustment towards a new world order equilibrium on the patterns and values of trade and development across the globe. In terms of area studies, large-size regions that are closely tied and connected to Thailand and ASEAN via trade and investment are: the US, People’s Republic of China, and South Asian Region with India as the core. Any developments in the patterns of future possibilities and trends should be monitored.

The US and a Situation of Declining International Power Since the mid-2010s, the United States’ position as a single, dominant and uncontested global superpower in a “unipolar” setting has been steadily challenged. Professor Amitav Archayahas argued in the book The End of American World Order (2004) that the era of a world policed and dominated under the sole influence of the West has ended. The US hegemony, established through the post-Cold War liberal international order through its military, administrative departments and undisputed US influence over powerful international organizations, has drawn to a close. In Archaya’s opinion, the undeniable emergence of a new superpower will have profound impacts on the balance of global political power, in what he terms as an age of “Multiplex World Order”, characterized by an exponentially more complex and volatile world political order. Such profound complexities will be caused by economic, political and sociocultural diversities of various nations that are becoming

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more entwined and overlapped with one another. In the upcoming future, world orders will no longer be established and abolished solely at the hands of the state (or states). Instead, various factions and parties, such as international organizations, regional collaborative platforms, and non-state players such as multinational enterprises, private businesses, civil society sectors, and countless networks and groups, will play their roles in shaping the world political order and collectively influence the outcomes, in degrees not previously observed before. As such, an important question arises—will the United States be able to come to terms with this decline and erosion of its previously held influence? To academically seek answers to this question, a study of the US’ national security strategies is crucial. The US National Security Strategy, publicized in 2017, aims to set four main objectives (Pillars) for its national strategy (The White House, 2017), as follows: The first pillar is the national security strategy, where the US is committed to protecting American citizens, the homeland, and the American way of life, have four major threats, consisting of (1) threats from weapons of mass destruction (WMD), in particular, those under the development efforts of the People’s Democratic Republic of Korea (North Korea); (2) threats from terrorists, which the US believe are sponsored or supported by the state of Iran; (3) extremist insurgencies and fundamentalist armed forces, in particular Jihadist groups; and (4) cyber-security threats. The second pillar is the economic strategy, as in promoting economic prosperity and a robust economy. The US Department of State is tasked with trade negotiations under various frameworks, for achieving and sustaining annual growth rates over 2%, which is required to catchup with China’s rapidly growing economy. The Department of Defense is responsible, through its regional commands—especially the US Indo-Pacific Command (USINDOPACOM)—for maintaining security and freedom in maritime navigation in disputed or sensitive areas, especially in the South China Sea, which is marked with much political tension. The third pillar consists of social and cultural strategic goals. Here the US aims to reinforce its defining traditional values, especially the paramount value of peacekeeping to preserve “The Western Liberal Democracy” ideology. The US has expressed a desire to maintain its leadership and status in global politics and considers the states of China and Russia as principal threats to its peacekeeping agenda (Weaver, 2018: 62–71). The fourth pillar, being the main strategic focus of the US on the overall level, is to advance the US’ influence in the world. The US strives to maintain and sustain its hegemonic powers and views China and Russia as being detrimental influences that are eroding this power. The principal policy tool of the US in this strategic agenda is the reform of US assistance programmes to its allies and recipient nations around the world. From these four national security strategies, it can be observed that the US views China as a threat in as many as three out of four of its principal security concerns, whereas Russia is considered a national threat in two out of four. More importantly, these agendas are included in the US’ national strategies, which means that they are considered long-term national strategies for as long as 15–20 years. A very important notion is that they will be maintained regardless of presidential agendas that change

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every 4 years with each presidency; presidential policy agendas can change relatively more often, but they are meant to serve in different ways and are means to the same ends; the “ends” here are these four dominant strategies, which shall not be changed in the aforementioned timeframe. As the leadership of the US is transferred to President Biden’s term, the White House has announced its policy priorities which are at the same levels of importance to the US government. These are the suppression of the COVID-19 pandemic, measures to tackle climate change, the encouragement of racial equality between ethnic groups, the promotion of economic growth, the strengthening of the national healthcare and welfare systems, immigration screening, and the restoration of the US as the leader of global order (The White House, 2021). As such, the likelihood of intense conflict(s) between the two superpowers, as illustrated in Harvard Professor Graham Allison’s book Destined for War: Can America and China Escape Thucydides’ Trap?, will be very difficult to avoid. In his book, Professor Allison argued that China’s rapidly rising status as a solid superpower will overshadow the US’ prior influence, and this will only add to the tension and chances of conflict. The analogy, known as Thucydides’ Trap, is often employed when explaining conflicts occurring when the balance of power shifts from one previously dominant nation-state to another. The concept originated with Thucydides’ (a Greek philosopher and thinker who lived around 500 BC) analysis on the driving force of the Peloponnesian War, the dominant cause of which was the emergence of the city-state of Athens as a new regional superpower, which threatened to eclipse and surpass the previously uncontested dominance of the city-state of Sparta. The latter, threatened by this change of power dynamics, started a war against Athens. The book then proceeded to compare 16 more examples of similar conflicts that occurred in history, observing that as many as 12 out of 16 cases ended in physical conflicts. This is worryingly similar to the present situation with much tension between the United States, a prior dominant superpower that is losing its uncontested status and its grip over the global power balance, and China, which is rapidly ascending and threatening to surpass its rival (Allison, 2017).

The People’s Republic of China and Development Goals Towards Economic Opportunities The Chinese National People’s Congress’s (NPC) meeting is considered the primary legislative mechanism of the state of China. This procedure consists of 2953 legislative council members (2097 from the Communist Party and 856 from other sectors forming the country) holding an annual meeting once per year, for the purpose of ratifying legal and regulatory drafts established by 170 representatives known as the Standing Committee (who are elected from the aforementioned 2953 members). The most recent meeting took place between 5 and 11 March 2021 and was considered an NPC meeting of great importance, due to China’s newly acquired position of

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being the biggest economy in the world in 2021, finally surpassing the United States in terms of population size and GDP (PPP) alike. The results of the meeting indicate China’s strategic directions for the upcoming future and can be summarized as follows (Xinhuanet, 2021). 1. Announcement of China’s success in overcoming the COVID-19 global pandemic, and the strategic thrusts for china’s future economic and social development. China’s profound success in handling the COVID-19 outbreak has given it a significant advantage, enabling China to enjoy a positive economic growth rate in 2020, one of the few countries to be able to do so. The central committee of the Chinese Communist Party has listed the following factors as keys to this economic success: (1) a demand-driven macroeconomic policy that fulfils the economic needs of the people, helping in maintaining economic dynamics; (2) the use of government employment policies to ensure that all workers are to remain employed even in the trough of the recession in early 2020; (3) elimination of factors obstructive to economic policymaking; (4) steady efforts to drive forward national reform initiatives to fully integrate China into international value chains; (5) development of science, technology and innovation (STI) to fulfil industrial sectors’ needs and requirements; (6) simultaneous development of urban and rural areas; and (7) the strengthening of political and administrative power towards promoting a peaceful and secure society in China (Xin, 2020). 2. Presenting China’s success in its 13th National Economic and Social Development Plan (2016–2020) An achievement that China had announced in its celebration of the 100-year anniversary of the founding of the Chinese Communist Party (23–31 July 1921–2021) was the profound success in utilizing scientific and social science-based methods and programmes to alleviate the poverty problem for as many as 55.75 million Chinese citizens, as well as the coordinated effort to relocate 9.6 people away from inhospitable natural environments in their former areas. China has been granting awards and recognitions to its contributing volunteers, who are mostly students from leading Chinese universities, who travelled to local areas plagued by poverty and conducted efforts to solve their problems. This achievement allows China to publicly state that, during the course of its 13th Five-Year Plan, all of China’s population has been liberated from poverty, and that it has now created more than 60 million urban jobs for its citizenry, complete with a successful social security system, which is the world’s largest both in terms of education and public health. Another area that China considers as an important factor of success in its effort in promoting better quality of life for both the Chinese population and denizens of other nations is the Belt and Road Initiative (BRI) that connects Asia, Africa and Europe together. In this regard, the authors are of the viewpoint that the BRI will benefit China greatly in the following five dimensions: (1) promotes internal economic growth, especially in terms of utilization of excess production capabilities that would be otherwise idle and wasted due to the global recession and the trade

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wars ongoing at present, (2) allows China to access the relatively untapped abundant natural resource supplies in various locations in Asia and Africa, (3) allows China to access a vast and diverse pool of human resources, which varies greatly in terms of quantities, wage rates, and skillsets, (4) grants China access channel to highpurchasing power markets in Europe, as well as large markets with high growth potentials in Asia and Africa and (5) solidifies China’s standing in the international community (Piti Srisangnam, 2021). 3. Announcing the beginning of the 14th National Economic and Social Development Plan (2021–2025) The Chinese Government has always stated that the 14th 5-year national development plan has been drafted and formulated under the direct and personal supervision of President Xi Jinping. The premier has taken responsibility to be the chairman of three key “leading small groups” (LSGs), which are (1) the LSG for Comprehensive Deepening of Reform, (2) LSG for Finance and Economy and (3) LSG for Foreign Affairs. He also personally presided over various important brainstorming sessions with various stakeholders within the country. Prior to this occasion, the government had made announcements that the Chinese economy in future will be marked by a new balance of power between internal and external economic circuits: “Internal Circulation” signifies the creation of new demand from within the country, coupled with the reduction of external dependency, especially from the United States, whereas “External Circulation” in international economics focuses on maintaining China’s economic shares in the global economy and international trade through the formulation of new markets through both the BRI and various trade negotiations. This concept is known as “Dual Circulation”. It is within this 14th National Development Plan that the central committee of the Chinese Communist Party has established the goals for 2035, which is one of the three core components of the long-term development vision of China, known as “the Chinese Dream”, which consists of (1) remodelling the Chinese society into a fundamentally strong and modern society in 2035, as a basic goal, and becoming an advanced socialist country that no longer subscribes to the Western criteria of development evaluation; (2) establishing China as a strong and profoundly advanced socialist society in 2049. This is aimed, also, to commemorate the 100th anniversary of the establishment of the People’s Republic of China (1 October 1949). In this regard, China has set its 2050 goals to become a strong, democratic (in Chinese contexts and definitions), cultured and civilized, harmonious, and aesthetically pleasing nation, under the scenario of a “community with a shared future for mankind”; and (3) the Chinese Communist Party and the state of China possessing complete sovereignty over its borders under the “One China Policy” (Office of the Secretary of State, 2020). This 14th National Development Plan of China is the first of a grand strategic framework that requires as many as 6 continuous National Development Plans, which are the14th Plan (2021–2025), the 15th Plan (2026–2030), the 16th Plan (2031– 2035), the 17th Plan (2036–2040), the 18th Plan (2041–2045) and the 19th Plan (2046–2050).

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A summary by the Thai-Chinese Strategic Research Center (of the National Research Council of Thailand) has summarized nine main principles of the 14th Chinese National Economic Development Plan as follows: (1) enhance and uplift developmental quality and efficiency, and safeguard economic development, (2) use innovative momentum to facilitate progress in a modern and advanced industrial system, (3) establish a sizeable internal market, setting new conditions for future upcoming development, (4) comprehensively revitalize rural areas and reform urban development strategies towards perfection, (5) improve regional economic planning, and promote inter-regional development cooperation, (6) perform in-depth reforms in all dimensions to drive forward robust and vigorous development momentum, (7) promote green development and facilitate healthy coexistence between human and nature, (8) focus on peace and happiness for the citizenry, working towards common prosperity and (9) reinforce development efforts with national security considerations, making China a highly secure country (Tantayakul, 2021). From this narrative, it can be observed that, while the US sees China as a major threat to the American hegemony and its long-held leadership in international politics, China itself does not verbally emphasize on becoming an international hegemon. Rather, China is more legislatively concerned with creating opportunities in economic, trade, investment and national security areas, focusing on the principles of mutual benefits and international harmony. That being said, as was mentioned before, given the uneasy circumstances between the two great nations, conflict and much tension between the US and China will be hard to avoid. From Thailand and ASEAN’s perspectives, as the ASEAN Community is located in the strategic position at the linking point between the Indian and the Pacific Oceans, geopolitical impact on the movements of both superpowers on the ASEAN community will also be inevitable. Such conflicts are expressed through trade and technology wars. The US began implementing Title III of the Trade Act of 1974 (Sections 301 through 310, 19 U.S.C. §§2411-2420), titled “Relief from Unfair Trade Practices”, in May 2018. This is often collectively referred to as “Section 301”. For violators of US trade agreements or those engaging in acts that are “unjustifiable” or “unreasonable” and inconvenience US commerce, Section 301 offers a statutory means through which the United States imposes trade sanctions on foreign countries. However, the reasons for implementing the trade war policy were different. President Trump used the pretext of a trade deficit and policy action to bring the United States to greatness again, while President Biden makes excuses for Supply Chain Resiliency. All of these actions lead to the implementation of protective international trade policies and international investment policies only in friendly countries or the so-called Friend Shoring. These actions continue to occur until now and will likely continue in future. The Great Decoupling between Western RVCs led by the US and the Eastern or Asian RVCs led by China became an inevitable situation. In this context, it is necessary for medium-sized economies such as Thailand and member states of the ASEAN Community to position themselves as the central chain linking the separated RVCs.

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India and South Asia: An Emerging Market Next Door In 2022–2023, Thailand received the honour of acting as the chair and host of the BIMSTEC (Bay of Bengal Initiative Multi-Sectoral Technical and Economic Cooperation) Summit. Thailand has been a key contributor in the founding of the Initiative in 1997, and, today, BIMSTEC has the participation of 7-member countries located around the Bay of Bengal locality—Thailand, Myanmar, Bangladesh, India, Nepal, Bhutan and Sri Lanka. These countries are some of Thailand’s closest neighbours, with a great many centuries of intertwined histories, trade, cooperation, religious interactions, and a prevailing sense of shared social and cultural heritage. Geographically, Thailand and Myanmar share a vast 2401 km of land borders, while their Western maritime borders, known as the Andaman Sea, are the eastern part of the Bay of Bengal and the Indian Ocean. This means Thailand also shares a border with India via the sea. Thus, Thailand’s famous island province of Phuket is located not too far away from the city of Port Blair, on the Andaman and Nicobar Islands. In a virtual BIMSTEC Colombo Summit on 30 March 2022, it was decided that the number of sectors of cooperation would be reduced, reconstituted and reconstructed from the unwieldy 14 to a more manageable seven, namely trade, investment and development (led by Bangladesh); environment and climate change (led by Bhutan); security and energy (led by India); agriculture and food security (led by Myanmar); people-to-people contact (led by Nepal); science, technology and innovation (led by Sri Lanka); and connectivity (led by Thailand). From economic perspectives, the Bay of Bengal is considered an important destination for trade and investment from Thailand and ASEAN, due to the following six reasons: 1. The Bay of Bengal is a sizeable market with high prospects for growth, inhabited by as many as 1.7 billion citizens, and accounting for over 4.4 trillion USD. As a location for emerging economies, the region has enjoyed average annual growth rates higher than 6.5 per cent during the last 10 years (BIMSTEC Secretariat, 2021). As such, this is a promising region for Thailand’s trade and investment partnerships and attention. 2. The region is endowed with ample supplies of natural resources throughout a vast range of terrains, from the Himalayan mountains to the rich Indian Ocean. As such, the Bay of Bengal area has been known throughout history as an important source of production, as well as a prominent part of trade routes. With vast land areas, rich mineral deposits, and an ocean that connects the various regions of the world together for opportunities in future, the region is very noteworthy in its prospects. This especially holds true when the world is turning its attention towards the concept of “Blue Economy”, in which oceans play a prominent role. The World Bank has highlighted the potential of joint development coupled with natural conservation to promote economic advancement and job opportunities in six areas, which are: (1) fisheries, (2) alternative energy, (3) maritime transport, (4) tourism, (5) maritime and oceanic waste management and (6) the potential of the ocean in alleviating the climate change crisis (World Bank, 2017).

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3. The region benefits from its supply of young and promising population. India is the second most populous country after China, with more than 1,378,089,932 forecasted inhabitants (Open Government Data Platform India, 2021), and Bangladesh is the 8th most populous country with a projected population of 170,824,856 (Bangladesh Bureau of Statistics, 2021). In addition, there are other 1.7 billion inhabitants living in other member states of the region, and there is a great diversity in terms of labour skills and experiences, knowledge, and, subsequently, wage rates. This gives rise to immense opportunities when choosing production based on the merit of labour characteristics. All of these factors, coupled with a young and robust population pool, have made the Bay of Bengal region a stage for new opportunities for entrepreneurs seeking to employ the most suitable supplies of labour for their businesses, and also a place where there are opportunities for people to build their future and advancements in life. 4. The region is located almost adjacent to Thailand and is within a short travelling distance. From the viewpoint of entrepreneurs who will need to oversee their bases of operations, as well as workers and employees who need to travel back and forth between the home and host countries, an agreeable distance of approximately 4 h of air transit facilitates relative convenience, as individuals can access all major airports located throughout the region during the said travelling time. This convenience and ease of access allow time and commuting costs to be properly managed, making the prospects of trade, investment and work in the neighbouring region of the Bay of Bengal an interesting option. 5. Countries in the Bay of Bengal region and South East Asia and Thailand share close cultural proximities, with cultures and social norms that are related to one another. This means that people from Thailand and South East Asia will have a considerably easier time understanding how our counterparts in the Bay of Bengal region live, think, eat and want. In business terms, entrepreneurs from SMEs to large multinational firms can develop their goods and services to serve the actual needs of the customers and consumers in the Bay of Bengal region, through insight from this common understanding, and the intelligence gained from various information, which can be acquired without excessive difficulties or costs. These are the benefits of a common cultural and social proximity, with closely related linguistic, religious, lifestyle and geographical roots, which in turn facilitates a common sense of understanding. 6. Thailand is part of multiple free-trade agreements which allows it to gain advantage in trade and investment in the region, such as the Thai-India Free Trade Agreement and the ASEAN-India Free Trade Agreement. In addition, in the near future, the BIMSTEC Agreement will be fulfilled, along with potential opportunities from the Regional Comprehensive Economic Partnership (RCEP, where ASEAN and the other five-member states allow India to participate in the RCEP through special rights) and the Thai-Bangladesh Free Trade Agreement which is currently undergoing impact studies in preparation of future negotiations. All of these chains of agreements serve the purpose of integrating Thai and Bay of Bengal countries into global value chains (GVCs), which will, in turn, generate jobs and economic expansion.

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RCEP is the Opportunity From the author’s perspective, RCEP is the opportunity for Thailand, ASEAN and possibly India to return as a signatory state, at least by three points: (1) RCEP will make the regional value chains (RVCs) stronger in order to support the post-COVID recovery of global value chains (GVCs); (2) RCEP creates opportunities for ASEAN and dialogue partners to be part of the GVCs; and (3) RCEP is a good starting point for preparing member countries, especially Thailand and India for other more complicated trade negotiations (Srisangnam, 2022). At present, rather than just aiming to reduce taxes, Regional/Bilateral Trading Arrangements have concentrated on negotiations on more extensive issues. These encompass rules and regulations, MRAs, standards and conformance as well as the ratifications and commitment to the Declaration on TRIPS, public health, human security and labour-related issues. For Thailand and ASEAN member states, RCEP is the first comprehensive and high-standard FTA that has been fully implemented. The benefits of RCEP to Thailand can be concluded as follows: • Trade in Goods: Tariff elimination of at least 92% of goods traded among RCEP countries, with additional preferential market access for Thailand’s exports and stronger provisions to allow duty-free temporary admission of goods (39,366 tariff lines) into the regions. • Non-Tariff Measures (NTMs) Provisions: Provisions to ensure greater transparency and stronger disciplines on NTMs, such as import licensing procedures, to better enable favourable market access for Thailand’s exports. • Rules of Origin: Streamlined rules give businesses greater flexibility to tap on preferential market access benefits and take advantage of the value chains with regional cumulation provisions. Key sectors include electronics and electrical appliances, automobiles and parts, chemicals and plastics. • Custom Procedures and Trade Facilitation: Simplified customs procedures and enhanced trade facilitation lowers transaction time and costs and give Thailand’s exporters greater certainty. • Trade in Services: At least 65% of RCEP countries’ services sector will be fully open, with greater transparency of regulations and measures (with possible liberalization on more sectors in future). • Investment: Performance requirements on investors as conditions for entering, expanding, or operating in RCEP countries are prohibited. A built-in work programme on Investor-State Dispute Settlement (ISDS) provisions provide greater security and assurance for Thai businesses. • E-Commerce: Elements such as online consumer protection, online personal information protection, transparency, paperless trading, acceptance of electronic signatures and commitments on cross-border data flows provide a more conducive trade environment for Thai businesses. • Intellectual Property (IP): Businesses can obtain protection including for nontraditional trademarks and a wider range of industrial designs in the region. The RCEP countries also commit to accede to international IP treaties which will

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streamline applications to enable companies to file a single patent or trademark application designating multiple countries. • Competition: Commitment to maintaining competitive law regimes based on international best practices and agreed principles protects businesses from anti-competitive activity when operating in other RCEP countries. • Government Procurement: A new area of cooperation among RCEP countries. This is the first time that Thailand and some ASEAN member states have ratified government procurement measures. Transparent laws, regulations and procedures provide greater clarity for Thai businesses that bid for government procurement projects in RCEP countries (Srisangnam, 2022).

Further Economic Integration From Thailand’s point of view, it will need to heed to the question of whether it can take part in this expanding recovery momentum in GVCs. Ideally, it should be possible to rejuvenate its domestic economy back towards positive growth again through recovering trade flows. Of course, in comparison to other ASEAN members, Thailand only has trade advantages when it comes to other Asian and East Asian partners, through the Regional Comprehensive Economic Cooperation (RCEP) between ASEAN, China, Japan, South Korea, Australia and New Zealand. Presently, however, Thailand does not enjoy any trade advantages in connecting Asia’s regional value chains (RVCs) with US-led RVCs. Currently, the CPTPP Agreement is the only linking bridge in this regard, the advantages of which are also enjoyed by Vietnam, Malaysia, Singapore and Brunei. In the case of Vietnam, free trade agreements exist to serve in linking and promoting trade and investment advantages with the EU and the Eurasian Economic Union (EaEU). This means that in comparison to Thailand—similarly enjoying 14 trade agreements as Vietnam, but is able to conduct unobstructed trade with only 18 economic zones—Vietnam is able to trade unrestricted with as many as 53 economic zones all around the world, despite having the same number of trade agreements in force (Asia Regional Integration Center, 2021). From this comparison, it is quite evident that what is at stake for Thailand is the risk of losing the benefits of the momentum of economic recovery, where GVCs and RVCs recover and close the gap without Thailand being an important participant. This will be likely if Thailand misses the opportunity to participate and be part of various ongoing free-trade agreements. Thailand will need to seriously and urgently consider taking a proactive attitude in expansive and high-quality free trade agreements, such as the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) comprising of 11 member economies (Malaysia, Singapore, Brunei, Vietnam, Japan, Canada, Mexico, Chile, Peru, Australia and New Zealand), as well as connect to other important free trade agreements and regional integrations like the Eurasian Economic Union (EaEU) which comprises of Belarus, Kazakhstan, Kyrgyzstan, Armenia and Russia, or the European Union and the UK. In addition,

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Thailand will need to introduce free trade agreements with new emerging market countries, such as South Asian countries (Srisangnam, 2022). RCEP is a good starting point for preparing member countries to negotiate more sophisticated, more comprehensive and higher standard regional trading agreements. From Table 8.1, it can be seen that RCEP covers the facets of the basic or entrylevel comprehensive and high-standard trade talks. RCEP, however, doesn’t cover the more complex issues such as TRIPS Plus, UPOV-1991, or compliance with high international standards. It is like preparing Thailand and ASEAN members to try swimming in a children’s pool before going out to actually swim in the Olympic stadium pool after the whole group gets used to the implementation of the RCEP. India also wants to move forward with the Act East Policy that envisages expanding opportunities into South East Asia and East Asia. India is a country with a wide range of manufacturing potential. It should not be too surprising that India features prominently on the list of top agricultural producers. India has a large population and internal food security (i.e. producing enough to feed a nation’s population from internal resources) is a priority. India ranked first in the production of milk, jute and pulses (a class of legumes that includes dry beans, lentils, and chickpeas), second in rice, wheat, sugarcane, fruit, vegetables, cotton, groundnuts, and dry fruits, third in fish production, fourth in egg, and fifth in poultry production worldwide. India is the world’s largest wheat-producing country and the largest rice exporter globally and has maintained the lead for more than five years. In 2019 alone, the country exported 18.75 million tonnes of rice to other nations. India exports its non-basmati rice to African and Asian countries. In contrast, its premium basmati rice is exported to the United States, the Middle East, and other nations in Europe and Australia. India remains the world’s largest exporter of refined sugar and milled rice. Strong exports of rice, cotton, soybeans and meat helped India move up to 9th place among global agricultural exporters in 2019 (FAO, “India at a Glance” ND; US Dept. of Commerce, 2021; FAO “Commodities by country” ND; WTO, 2020: 92; Mint, 2021). Under a situation where the world is worried about food security, India, with its superior production capability, will be able to give itself a great opportunity if it enters the negotiation process for liberalization of trade and investment.

Policy Recommendations However, it is also inevitable for Thailand and India to further negotiate with other trading blocs in order to link the two decoupled RVCs. It would be in the best interests of Thailand, ASEAN member states and India to quickly establish strategic plans on trade, and expedite its trade agreements. Focus not only opens to the whole world but also increases the value of trade and investment among Thailand, India, ASEAN and Bay of Bengal partners are also the first priority. This will allow Thailand and India to benefit fully from the recovering global value chains (GVCs) and will allow the whole South and South East Asian countries to adjust quickly to a new international trade climate where countries are setting up new forms of unilateral protectionist barriers,

O

X

X

X

X

X

USMCA

EU-Vietnam FTA

EU-Singapore FTA

EFTA

EaEU

RCEP

X

X

X

O

O

O

X

extension

X

X

O

O

O

O

X

exclusivity

O

O

O

O

O

O

O

X

O

O

O

O

O

O

International union for the protection of new varieties of plants (UPOV-1991)

O

X

O

O

O

O

O

Government procurement

X

X

X

O

O

O

O

An SOE acts in accordance with commercial considerations

X

O

X

O

O

O

O

Compliance with international labor standards (ILO), such as the establishment of associations and rights

O Negotiated and Enforced; X Neither negotiation nor enforcement; n.a. No negotiation data; CPTPP The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam); USMCA United StatesMexico-Canada Agreement; EFTA European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland); EaEU Eurasian Economic Union (Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia); RCEP The Regional Comprehensive Economic Partnership (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam, Australia, China, Japan, New Zealand, South Korea and India

O

linkage

TRIPS plus the expansion of TRIPS agreement on trade-related aspects of compulsory intellectual property rights licensing (CL) Patent Patent term Data

CPTPP

FTA 2.0

Table 8.1 Trade dimensions covered by RCEP

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which is caused by the deglobalization sentiments arising from the COVID-19 global pandemic. Thailand and India must focus and prioritize in their trade agreements the cooperation with countries and regions that form the cores of various regional value chains (RVCs), and those that are the arbiters of international standards and best practices in various dimensions, such as labour protection, environmental conservation, intellectual properties (IP), e-commerce and government procurement. Agreements and collaborative frameworks that will prove to be important considerations, for example, The Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), the European Union (EU), the European Free Trade Association (EFTA), the Eurasian Economic Union, as well as various trade and investment agreements with the US and the UK. Trade negotiations to be carried out with these countries or regions should be comprehensive and must have high standards. In the past, Thailand and ASEAN as well as their dialogue partners (China, Japan, ROK, Australia and New Zealand) have successfully utilized this framework in realizing and implementing the Regional Comprehensive Economic Partnership (RCEP) to its conclusion stage in the past, and this template can serve as a strategic guideline for future agreement negotiations. In addition, the second group of countries and regions which warrant similar priorities as the first category above is the group of emerging economies and markets. Such markets are characterized by a large population and sizeable consumer pool, vast supplies of natural and human resources, and high economic growth rates. Countries in such category include the BIMSTEC countries (Bay of Bengal Initiative MultiSectoral Technical and Economic Cooperation), the Gulf Cooperation Council (GCC, a Middle Eastern economic cooperation initiative), bilateral agreements between Thailand and trade partners in South Asian, Middle Eastern and African countries. Finally, a third category on the courses of action is the revision, amendments and expansion of the 14 existing Thailand’s trade agreements currently in force (Thailand-India FTA with the Early Harvest is also included in this category), to cover more aspects that will prove beneficial to the Thai economy and its citizenry. Apart from negotiating and upgrading FTAs, internal reform or the real action of domestic “software” upgrading is also needed for both Thailand and India who share the same obstacles. The Thai and Indians need to carry out regulatory reforms which are collectively known as “Regulatory Guillotine”. Having prudent and astute laws, rules, regulations, and internationally accepted standards, along with good regulatory practices (GRP), is one of the most vital factors for establishing Thailand and India as a preferred destination for foreign investment and a successfully growing economy. The term “good regulatory practices” cover measures such as “regulatory impact analysis”—the study of the impact of the drafting and enforcement of various laws and regulations—and the formulation of impartial, non-subjective laws. Such reforms will benefit a country in many ways, both by enhancing the prospects of economy, trade and investment attainments in the global economy, and by raising the country’s standards, recognition and reputation in the global community (which corresponds to the aforementioned vital national interest in terms of the dignity of the state and nation). Important indexes that will be used in evaluating a country’s attractiveness

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are, for example, the Corruption Perceptions Index (CPI), the Global Competitiveness Index, the Ease of Doing Business Index, etc. By gaining ranks in these competitiveness evaluations, Thailand will benefit in the long run from more attractive economic climates, better reputation, and, subsequently, economic opportunities and expansion. As such, the existing rules, regulations and laws will need to be updated to fit the modern world’s environment. This process, called the “Regulatory Guillotine”, will comprise of four procedures, which are (1) “Cut”: the removal of outdated regulations and laws, and those that depend on subjective decisions and judgments, (2) “Collect”: the bundling of previously scattered rules, laws and regulations, which are assigned to different agencies while essentially serving the same functions, into the same “location”, (3) “Continue”: the perpetuation and continuation of well-functioning, appropriate and useful laws and regulations and (4) “Create”: the creation of laws and regulations in areas previously unaddressed, or where there were gaps, loopholes and grey areas previously. This process shall work to establish and formulate new laws that are fair, equitable, facilitating, not cumbersome or obstructive, and compliant with internationally accepted standards (Office of the Prime Minister, 2018). Such undertakings of Regulatory Guillotine have been started in Thailand, with some progress, but have since been stagnating. The process began with the revision of Thailand’s Smart and Simple Licence Project (under the supervision of the Prime Minister’s Office of Thailand). An example of a successful and commendable effort of Regulatory Guillotine that Thailand and ASEAN member states should draw a lesson from is the case of Vietnam, where the procedures began under the “Project 30” Initiative in 2008 and was successfully completed with the “Resolution 19” edict in 2015. The result of this improvement was the removal of approximately 30% of redundant rules, regulations and laws, resulting in the reduction of business-related costs of over 1.4 billion USD per year (Tri Thanh & Nguyen, 2016). Last but not least, both India and Thailand need to continue to strengthen their relations and partnerships in all aspects. Our modern relations started with India’s Look East Policy in the 1990s; Thailand responded to India with the country’s Look West Policy. Their intertwined diplomacy, as well as business and social network, have helped both countries to play an increasing role in a rapidly changing landscape and new regional dynamics. Act East Policy emphasizes the need to link the NER with South East Asia. This is because poor infrastructural connectivity has been a major impediment to India’s connections to its eastern partners. The most prominent project that needs to be completed as soon as the pandemic ends is “the IndiaMyanmar-Thailand Trilateral Highway”. This connectivity project, agreed upon in 2009, seeks to address the transport network and will connect the Indian town of Moreh in Manipur to Mandalay in Myanmar to Western Thailand. Within Thailand, rail networks will connect the transport chains to the East to Bangkok and to the South to Malaysia and Singapore. This will help Thailand then to operate as a distribution point for further trade networks that connect India to South East Asian markets. In turn, this will reduce India’s reliance on maritime traffic and choke points such as the Malacca Strait and the Lombok Strait. In the context of improved connectivity, there

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have also been talks of extending the Trilateral Highway to the bordering countries of Laos, Cambodia and Vietnam, and the strategic significance of mainland South East Asia is further enhanced by the growing Indian investment in Thailand (Palit, 2016: 85).

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The White House. (2021). The Biden-Harris administration immediate priorities. https://www.whi tehouse.gov/priorities/ Tri Thanh, V., & Van Nguyen, C. (2016). Regulatory coherence: the case of Vietnam. In D. Gill, & P. Intal, Jr. (Eds.), The development of regulatory management systems in East Asia: Country studies (pp. 259–391). ERIA Research Project Report 2015–4. ERIA. https://www.eria.org/ RPR_FY2015_No.4_Chapter_8.pdf US Department of Commerce. (2021, October 21). Country commercial guides: India—food and agriculture value chain. International Trade Administration. https://www.trade.gov/countrycommercial-guides/india-food-and-agriculture-value-chain Weaver, J. M. (2018). The 2017 national security strategy of the United States. Journal of Strategic Security, 11(1), 62–71. https://doi.org/10.5038/1944-0472.11.1.1655. http://scholarcommons. usf.edu/jss/vol11/iss1/5 World Bank. (2017). What is the blue economy? https://www.worldbank.org/en/news/infographic/ 2017/06/06/blue-economy World Trade Organization. (WTO). (2020, September 21). World trade statistical review 2020. https://www.wto.org/english/res_e/statis_e/wts2020_e/wts2020_e.pdf Xin, Y. (2020). Chargé d’affaires of the embassy of the people’s Republic of China in Thailand gave a keynote speech on “Fighting the COVID-19 Virus” for the Chinese and the world”. Seminar “Moving on the Thai-Chinese Economy”. Thai-Chinese Journalists Association. 20 August 2020, 13:00–17:00. The Emerald Hotel, Ratchadapisek Road, Bangkok Xinhuanet. (2021). The two sessions are authorized to release. In The fourth session of the thirteenth national people’s congress opens in Beijing 5 March 2021. http://www.xinhuanet.com/politics/ 2021-03/05/c_1127174184.htm

Chapter 9

India-Malaysia Relations: Strategic Engagement in the Context of the Act East Policy Mala Rajo Sathian and Geetha Govindasamy

Abstract The chapter examines the trajectory of Malaysia-India relations by analysing some of the key issues in bilateral relations, particularly in the last two decades or so. It will highlight Malaysia’s pro-China foreign policy, especially in the economic sector, which stands in contrast to India’s pro-United States strategy that supports the Indo-Pacific concept and the Quadrilateral Security Dialogue (QUAD). Despite having gravitated somewhat in opposite directions, continued efforts to strengthen bilateral relations is a common feature from both sides. To understand the evolving trends in bilateral relations, the chapter focuses on three select areas that have shaped consensual ties in the last two decades. These are (i) bilateral and diasporic relations, (ii) diplomacy and security, and (iii) trade and commodity expansion. The chapter identifies the inattention that exists in the context of the Act East Policy as well as Kuala Lumpur’s interests in New Delhi. Keywords Malaysia-India ties · Diaspora · Palm oil · Indo Pacific · Trade · Act East Policy

Introduction As India marked 75 years of independence in 2022, Malaysia and India celebrated 65 years of the establishment of diplomatic relations. However, the two nations share a much older and stronger historical connection, predating the period of official bilateral relations. The maritime space via the Bay of Bengal and the Straits of Melaka connected the regions over the course of premodern to modern history, M. Rajo Sathian Department of South East Asian Studies, Universiti Malaya, Kuala Lumpur, Malaysia e-mail: [email protected] G. Govindasamy (B) Department of East Asian Studies, Universiti Malaya, Kuala Lumpur, Malaysia e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 L. Ghosh and A. B. R. Chaudhury (eds.), India’s Relations with Neighboring South and South East Asian Countries, Dynamics of Asian Development, https://doi.org/10.1007/978-981-99-4610-5_9

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facilitating trade and cultural interactions. This link remained intact in the early postindependence period, as both were bound largely as former colonies of the British under the Commonwealth aegis. More significantly, India’s relations with its diaspora waxed and waned according to its political history and foreign policy priorities. While bilateral relations are rooted in history, geography and culture, what has propelled ties further is the convergence of mutual strategic needs and development. When India began its transition from a state-controlled economy to a more liberalized one, New Delhi realized that ASEAN member states offered enormous prospects for its own growth. To give shape to this new vision, New Delhi launched the Look East Policy in 1991 during Prime Minister Narasimha Rao’s government. In consonance with India’s robust economy and geostrategic status, Prime Minister Narendra Modi recast the same initiative as Act East Policy in 2014 by including East Asia as well. It is against this backdrop that both India and Malaysia have strengthened their partnership not only in diaspora ties but also in the areas of trade and investment, security and defence in contemporary times. Despite this, bilateral relations have endured several hiccups in the last few years, especially during the second administration of Dr. Mahathir Mohamad as Prime Minister of Malaysia (2018–2020). Issues like the citizenship amendment act in Kashmir and the extradition of preacher Zakir Naik created intermittent tensions. In addition, India’s preoccupation with the Indo-Pacific strategy which has not gained much currency among Malaysian policymakers has also shown the divergent track in foreign policy directions of New Delhi and Kuala Lumpur. The first part of the present chapter briefly alludes to the evolution of MalaysiaIndia bilateral and diaspora relations, pointing to some key developments. This is followed by a discussion on how the Act East Policy is shifting India’s policy strategies in relation to the Indian diaspora in Malaysia. The latter half of the chapter discusses trade and security relations between the two countries examined within the context of the wider Indo-Pacific security region.

The Beginning: Newly Independent States Leadership played a crucial role in cementing bilateral ties. First Prime Ministers of independent Malaysia and India, Tunku Adul Rahman (1955–1970) and Jawaharlal Nehru(1947–1964), both vocal anti-colonial and anti-imperialism advocates, shared a common vision for a decolonized and independent Asia. The leaders shared cordial relations and exchanged visits in the period after the independence of their countries. Tunku’s moral and financial support, albeit small, towards India in the India-China conflict in 1962 and later in the crisis with Pakistan over Kashmir was reciprocated with appreciation and admiration (Jalal, 2007; Muni & Mishra, 2019: 95). In turn, India reciprocated by supporting the formation of Malaysia and its counter-communist strategies throughout the 1960s till 1980s. Towards the middle of his term as prime minister, Nehru encouraged Indians overseas to assimilate and become good citizens of their host countries, indicating

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the beginnings of disassociation with Indians abroad (Singh, 2014: 132–133). This can be attributed to pressure in domestic politics and relations with its immediate neighbours which forced India to focus more on the South Asian region. Malaya too faced Indonesia’s Konfrantasi challenge in its Malaysia Plan to include the states of Sabah and Sarawak. Apart from domestic politics, increasing pressures within the cold war geopolitical and hegemonic concerns compelled both India and Malaysia to focus on their respective region’s security. Predating this period, the old Indian diaspora who arrived under colonial rule as indentured labourers to work in the plantation sector as well as the semi-professional class, stayed on and became full citizens while still retaining socio-cultural links with India. Despite the community preserving its Indian identity and links to the motherland, Malayasian Indians became a neglected community due to a lack of a specific diaspora policy from New Delhi. At the same time, the Malaysian government too expected its Indian community to show loyalty to the host country.

The Transition: Diaspora Ties and Disassociation In terms of regionalism, India’s early attempts to construct an Asian solidarity beginning with the Bandung Conference (1955) did not quite yield the expected results. Instead, Indonesia threw its support behind Pakistan and China which over the years began to emerge as a powerful hegemon in the region. Yet, diaspora demographics and politics continued to evolve within the global, regional and domestic changes. Malaysian Indians, also part of the People of Indian Origin (PIO), became less significant than others in the Indian diasporic mandala. Malaysia has always had a rather significant percentage of PIO, estimated to be about 7% of its population in 2022. Although this figure is small compared to PIOs in the Maldives, Fiji and Middle East (Saudi Arabia, UAE, Qatar), the link between the two countries has been established and nurtured over a long period of time. Notably, 80% of the PIO in Malaysia are Tamils who mostly came from Tamil Nadu, along with Telugus from Andhra Pradesh, Malayalees from Kerala and Punjabis from Punjab. The high percentage of Tamils among PIO in the country naturally connected Malaysian Indians strongly with Tamil Nadu, especially its people, politics, religions and mediascape. Thus, for the average Malaysian Indian, their connections and perspectives are closely entwined with Chennai and Stalin (the present Chief Minister of Tamil Nadu) rather than New Delhi and Prime Minister Modi. According to Rahul Mishra, academic at the Asia Europe Institute, Universiti Malaya, in this sense, the Indian political leanings among PIOs of Malaysia is provincialized (personal communication, 30 March 2022). By extension, this also leads to a provincialized Malaysian Indian identity vis-à-vis the global Indian diaspora. This becomes evident when the Malaysian Indian diaspora is compared with the Indian diasporas in Fiji and Maldives, whose ancestry is mostly traced to the northern states of Uttar Pradesh and Bihar and a smaller percentage from south India. The predominantly northern origins among the Indians of Fiji and Maldives are reflected in turn

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in a mostly Delhi-centric orientation and perspective. Even in terms of language, the majority of South Asian diaspora worldwide (the moniker Desi is commonly used) speak and communicate in Hindi. For most Malaysian Indians, Tamil is the language of connection with India. The Desi narrative seems to be centred on other people of South Asian descent. These differences add layers to the complexity of looking at the Indian diaspora as a monolithic entity in Indo-Malaysian relations.

Transformation: Old to New Diaspora to Cultural Diplomacy The Indian diaspora in Malaysia transformed from one that was largely associated with the plantation workers to include skilled and professional groups, both as a result of social mobility among Malaysian Indians as well as recent migrations of PIO to join the workforce in Malaysia. This signalled a shift from the old to new diaspora and, from India’s disassociation to active association with its diaspora beginning 1990s. The governments of Atal Bihari Vajpayee (1998–2004) and current Prime Minister Narendra Modi have done much to promote substantial engagement with the Indian diaspora, mainly to secure connections that would benefit India’s own growth (Challagalla, 2018). Concurrent in this period of the emergence of a newer diaspora is the voluntary movement of people in the age of globalization, specifically skilled white and bluecollared workers in search of job opportunities. This was the age of IT and healthcare professionals; it was reflected through a growing Indian expatriate population worldwide. This opened up a dynamic transnational space that linked networks of families, kinsmen and businesses. There was also vibrant engagement on various levels with multiple stakeholders, from governments, private commercial sector, research and cultural institutes to the media and entertainment industry. Indian expatriates in Malaysia are both skilled and semi-skilled professionals as well as workers employed in restaurants and businesses. The newer expatriates have transformed the Malaysian Indian diaspora landscape from its colonial heritage to one that is purely voluntary and economically driven. India’s diaspora policy became manifested through the Ministry of Overseas Indian Affairs which was founded in 2004 to facilitate information dissemination, partnership and other matters related to overseas Indians, both the non-resident Indians (NRI) and PIOs. It later became part of India’s Ministry of External Affairs, linking diaspora matters into foreign policy strategy. Notably, in the last decade, India’s foreign policy orientation is increasingly embodied through a culture-based soft power, integrating traditional cultural relations into its foreign policy (Muni & Mishra, 2019: 28). Indo-Malaysia cultural relations were boosted with the establishment of the Indian Cultural Centre (ICC) in 2010 in Kuala Lumpur to facilitate and disseminate Indian culture ranging from Carnatic music to yoga. The ICC is also the organizer of the Festival of India in Malaysia that showcases Indian fine arts and culture (High Commission of India, 2019). In fact, India’s cultural diplomacy through the ICC and the vision of “the world is one family” (vasudhaiva

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kutumbakam) is similar to what has been echoed in Malaysian Prime Minister Ismail Sabri’s “Malaysian Family” (Keluarga Malaysia) vision of collective future (Louis, 2021a). While the common good based on the one family concept is ideal, relations between the two nations have not always been amicable, especially during the tenure of Mahathir Mohamad (2018–2020) when Pakatan Harapan (Coalition of Hope) governed Malaysia.

Malaysia-India Bilateral Ties in the Era of Act East Policy Socio-Economic Ties Trade, investment and economic relations are the mainstay of India’s engagement with Malaysia. Currently, Malaysia is India’s 13th largest trading partner and India remains one of the top ten trading partners for Malaysia (High Commission of India, 2022). The introduction of India’s Look East Policy (1991) and Act East Policy (2014) has indeed contributed to the strengthening of two-way trade and investments. According to Prime Minister Modi, “Malaysia is at the core of the Act East Policy” (Business Standard, 2015). Economically, bilateral relations morphed into an enhanced partnership with the signing of the Comprehensive Economic Cooperation Agreement in 2010 and after the introduction of the Act East Policy, the Joint Statement on Enhanced Malaysia-India Strategic Partnership was realized in 2015. During his first visit to Malaysia in 2015, Modi encouraged local investors to get involved in initiatives such as Make in India, Digital India, Smart Cities and Skills Development (Ministry of External Affairs India, 2015). However, India’s footprint in Malaysia was visible in the growing economic ties between 1980 and 2016. During this period, Indian companies invested in 242 manufacturing projects estimated to be worth US$ 2.62 billion in Malaysia. The same period also saw 150 major Indian companies investing in other areas. Almost half of these companies were involved in IT ventures (Kumar, 2018). The 60th anniversary of bilateral relations a year later was marked by an official visit to Chennai by then Malaysian Prime Minister Najib Tun Razak. The six-day official visit saw Najib and Modi discuss two-way investments worth US$5 billion and MOUs worth billions of dollars (Kumar, 2018). In addition, Indian and Malaysian companies signed trade deals worth US$36 billion (Mustafa 2018). According to Mustafa Izzuddin (2018), “Najib’s India engagement is domestically intertwined with Indians in Malaysia”. Strategically not limiting his interaction with just Modi, Najib Razak visited Tamil Nadu’s Chief Minister Edappadi Palanisami and other southern states’ representatives. Moreover, he was awarded an honorary doctorate by Thanjavur University. On the sidelines, he chose to meet Superstar Rajinikanth, the renowned Kollywood actor. Najib gleefully posted a selfie with the caption “Just had a very warm and friendly meeting with Mr. Rajinikanth the Tamil

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superstar at his home” (Malaysiakini, 2017). Visiting Chennai and being involved in events showcasing Najib’s personal/cultural affinities with Tamilians did manifest into political optics to underscore the “Tamil” connection between Malaysia and India. Such displays were well received by Malaysian Indians. For Modi, engaging the southern state meant securing political mileage in a state like Tamil Nadu that is traditionally resistant to Bharatiya Janata Party’s (BJP) influence. Modi’s ethnic politics is also apparent in the Act East Policy where he is courting overseas Indians to become a bridge-builder between their adopted country and India, a clear departure from Nehru’s disassociation policy some decades earlier. For example, during the 2015 visit to Kuala Lumpur, Modi associated Tamil Nadu with Malaysian Tamilians. He invoked the Indian connection by remarking, “many of you are from Tamil Nadu…Tamil Nadu’s role in India’s growth is important…India is not confined to territory. India exists in every Indian in every part of the world, India is in you” (The Economic Times, 2015). Such utterances reflect Modi’s reliance on the Indian diaspora to augment India’s relations with the East. It is difficult to gauge to what extent the Indian diaspora is responsible for encouraging Malaysian investments in India. Nevertheless, Malaysian investments in India are substantial, estimated to be US$7 billion in the fields of telecommunication, construction and oil refineries. Among others, prominent Malaysian Indian companies investing in India are Maxis Communications in Aircel, Khazanah in IDFC, Apollo hospitals as well as Axiata in IDEA Cellular Ltd (High Commission of India, 2022). Similarly, Indian investors have done well in the manufacturing sectors in Malaysia. Notably, Indian investors are involved in product manufacturing related to textile, petroleum (as well as petrochemicals), pharmaceutical, non-metallic mineral and food. Indian companies such as Reliance Group, Biocon, Ranbaxy, JG Containers, Forte International and Tamco Switchgear have made relatively large investments in these areas. The Malaysian financial and banking service sectors have benefitted greatly from the presence of ICICI Bank Limited, Wipro, Infosys, Tata Consultancy and Manipal International (Indian Global Business, 2019). In 2022, the existence of 20,000 jobs in Malaysia has been directly attributed to the presence of 150 Indian companies in the ICT, biotechnology, manufacturing and financial services (New Straits Times, 2022). However, Basu Das (2018) postulates that overall ASEAN-India economic relations are relatively weak, mainly due to India’s trade policy and mismatched economic priorities. When compared to Malaysia-China trade, Indo-Malaysian trade lags behind in investment and trade volume. Nonetheless, there are sufficient opportunities to engage and broaden the scope, more so in the post-pandemic era. For instance, China is Malaysia’s number one economic partner with 15.5% of Malaysia’s total exports, whereas India is at eighth place with 3.6% of total exports (Workman, 2022). Going forward, we argue that Indian policymakers need to better engage Malaysia at the regional level if New Delhi wants to compete with China’s more robust trade and investment orientation towards ASEAN.

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Islamophobia and Faux Pas While it is somewhat true that New Delhi and Kuala Lumpur had the best of relations during Najib Razak’s government, Indo- Malaysian engagement is far more complex than the narrative that emphasizes on economics and ethnic politics. Bilateral relations took a turn for the worse under Mahathir’s second term as prime minister. The rise of Hindu nationalism in India has not been well received by the Malaysian government and the larger section of its Muslim population. Although Modi was one of the very first leaders to visit Malaysia after the historic win of Pakatan Harapan, Malaysia’s engagement with India spiralled downwards when Mahathir Mohamad, who has always advocated for global Muslim unity, began commenting on India’s internal policies towards Kashmir which has a majority Muslim population. In particular, India raised objections when at the United Nations General Assembly in September 2019, Mahathir commented on the abrogation of Article 370 which is the revocation of the special status of Jammu and Kashmir. Mahathir claimed that India “invaded and occupied Jammu and Kashmir” (Outlook, 2019). Later, in December 2019, Mahathir criticized India’s newly minted Citizenship Amendment Act (CAA) as an anti-Muslim law by remarking “I am sorry to see that India, which claims to be a secular state, now is taking action to deprive some Muslims of their citizenship”. The Indian foreign ministry refuted by pointing out that Mahathir’s interpretation of the CAA is “factually inaccurate” and that the citizenship law does not deprive “any Indian citizen of any faith of her or his citizenship” (Aljazeera, 2019). Against the backdrop of adverse remarks from Mahathir, India temporarily restricted the import of palm oil from Malaysia in retaliation. This was a blow for Malaysia which was the world’s second-biggest producer and exporter of palm oil after Indonesia. India has been one of the biggest importers of Malaysian palm oil for some time. With Indo-Malaysian relations hitting another low, Mahathir perceived the action as akin to a trade war (Bhat & Jakhar, 2020). Sreeram Chaulia, Professor at the Jindal School of International Affairs, interpreted it as an economic-political linkage power posturing. She posited that “the large market size of India is its innate strength and [Indian Prime Minister Narendra] Modi wants to harness it to raise costs for countries that strategically cross India” (Bhat & Jakhar, 2020). When Mahathir suddenly resigned in March 2021, his successor Muhyiddin Yassin (2020–2021) took pains to actively re-engage India. By May 2021, New Delhi resumed importing Malaysian palm oil as well as increasing the import of rice, sugar and high-speed diesel (Sharma, 2020). Tensions between the two countries had been brewing way before the palm oil issue hit the ground, largely due to the intensification of Muslim/ Malay identity solidarity in Malaysia’s internal politics. Kuala Lumpur turned down New Delhi’s request to extradite controversial preacher Zakir Naik who is wanted in India for alleged terrorism and money laundering activities (Outlook, 2019). Naik, who left India in 2016, gained permanent residency status in Malaysia during the government of Najib Tun Razak. Mahathir’s perception of India’s islamophobia is telling when he made the remark that Naik would be unsafe in India and that he is willing to send

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the preacher to any other country that is willing to take him (Hindustan Times, 2020). At the societal level, Malaysian Muslims too feared that Naik would not receive a fair trial as BJP is perceived to be anti-Muslim. Internally, Mahathir’s government faced an uphill battle to gain support from Malay Muslims who constitute 60% of the country’s population. Mahathir’s government was already perceived as being antiMalay and anti-Islam as many of its coalition party members were non-Muslims. The situation was also problematic as the Democratic Action Party (then part of the ruling coalition of which members are largely from the Chinese community) opposed the presence of Zakir Naik. Given that Zakir Naik is popular among Malaysian Muslims and the Malaysian Islamic Party (PAS), which was also part of the government, it would have been perceived as a betrayal of Muslim solidarity if Pakatan Harapan had repatriated him. Since Malaysia’s internal as well as external policy places a premium on Muslim solidarity, bilateral relations continued to be tensed. According to Kachiar (2020) “by resorting to Muslim identity politics …Mahathir instrumentalized religion to appease the Muslim Malay… the idea behind taking an Islamist approach in foreign policy was to carve a niche for Malaysia in the Muslim world and to portray Mahathir as the leader of the Islamic world at home and abroad”. Given the past trends in IndoMalaysian relations, it can be reasonably argued that policies and attitudes of leaders prompted by nationalistic approaches on both sides disrupted relations intermittently in the last two decades. For obvious reasons, Zakir Naik’s extradiction issue remains unresolved.

Security Ties For both India and Malaysia, stability in the Asia Pacific region is key to economic and tangible security. We argue that the Act East Policy in the context of Malaysia should be viewed vis-à-vis China and US rivalry as well as Modi’s global outreach. One of the main features of the Act East Policy is to rival and contain the influence of China in the Asia Pacific regional construct. Hence, in countering China’s assertiveness, Modi focuses on the Indo-Pacific Oceans Initiative (IPOI), India’s own Indo-Pacific strategy. Therewithal, India is also a member of the Quadrilateral Security Dialogue (QUAD), which calls attention to a free, open and inclusive Indo-Pacific region. In contrast, pertaining to regional security concerns, Malaysia adheres to the ASEAN Way of consensus in dealing with conflicts and supports the ASEAN Outlook on the Indo-Pacific which exhibits neutrality towards China. Kuala Lumpur strives to engage rather than offend Beijing, mainly due to strong bilateral economic ties. Consequently, Indo-Malaysian security and defence cooperation have become significant in a bilateral context rather than a regional one. Among others, bilateral security cooperation includes the 1993 MOU in Defence Cooperation, the establishment of a Joint Working Group on combatting terrorism in 2010 and the signing of a MOU on cyber security in 2015 (High Commission of India, 2022). Defence cooperation is strengthened by regular exercises and visits between military staff. According to the High Commission of India (2022) in Kuala Lumpur, recent

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exchanges are as follows. Indian naval ships INS Ranvijay and INS Kora carried out PASSEX with the Royal Malaysian Navy (RMN) ships—KD Lekiu and KD Jebat— on 6 September 2021. Likewise, in November 2021, the RMN took part in the Goa Maritime Conclave (GMC-21). Between 25 February and 4 March 2022, KD Lekiu participated in the multilateral exercises MILAN 22 at Vishakhapatnam. These exercises at sea are designed to allow for discussions on common maritime concerns as well as nurture cooperation in the areas of interoperability. However, these activities were not tied in anyway to countering China’s increasing maritime influence in the Indo-Pacific.

Conclusion The year 2022 marked six decades of Indo-Malaysian relations. Spurred by a convergence of interests, Indo-Malaysian relations have made great strides in recent years. Earlier, the impact of the LEP on Malaysia has been described as lacking “robustness” (Chandran, 2014: 1). Then there is the opinion that the LEP is a missed opportunity in tapping the potential of the Indian diaspora (Singh, 2014). After Modi became the prime minister in 2014, Indian foreign policy in the context of the Act East Policy towards South East Asia has indeed become more robust and calculated against the backdrop of China’s growing assertiveness in the Indo-Pacific region. Following the COVID-19 outbreak, bilateral relations have slowed down. While Malaysia may not be India’s top economic partner, both countries are connected by geographical proximity, economic connections and not forgetting a large number of PIOs. These characteristics are crucial not only for strengthening Indo-Malaysian relations in years to come but are also the bedrock of Modi’s Act East Policy. Similarly, the Indo Pacific strategy has increasingly become another platform to interact on a variety of issues albeit opposing views concerning China.

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Chapter 10

Singapore-India Relations: An Enduring Convergence of Interests Sinderpal Singh

Abstract Singapore-India relations, in the post-Cold War era, demand special discussion. The first part of this chapter outlines Singapore’s relations with India during the Cold War within the wider framework of India-ASEAN relations. The second part will look at the wide-ranging transformation in the bilateral relationship shaped by the end of the Cold War. The third section examines the period since 2014 with the formation of a Bharatiya Janata Party (BJP)-led government in India. The concluding section will offer some likely future trends in the bilateral relationship. It points to some recent challenges to the bilateral relationship, driven largely by the Indian government’s seeming shift in dealing with China. However, the fundamentals of the Singapore-India relationship, specifically in the defence and security domains, remain robust. This broad congruence of interests will continue to sustain the growing ties between the two countries. Keywords Singapore · India · Indo-Pacific · Foreign policy · ASEAN · Singapore-India

Introduction This paper examines Singapore-India relations, specifically focusing on the postCold War period. The first part will trace Singapore’s relations with India during the Cold War within the context of broader India-ASEAN relations. The second part will look at the qualitative change in the bilateral relationship brought about by the end of the Cold War. The third section scrutinizes the period since 2014 and the establishment of a Bharatiya Janata Party (BJP)-led government in India. The concluding section will offer some likely future trends in the bilateral relationship. S. Singh (B) South Asia Programme, S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore, Singapore e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 L. Ghosh and A. B. R. Chaudhury (eds.), India’s Relations with Neighboring South and South East Asian Countries, Dynamics of Asian Development, https://doi.org/10.1007/978-981-99-4610-5_10

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India, ASEAN and the Cold War: Opposite Sides of the Divide India’s independence in 1947 coincided with Indonesia’s emergence as an independent country, mirroring India’s own nationalist struggle against Western colonial rule. President Sukarno, independent Indonesia’s first leader, had much in common with India’s first Prime Minister, Jawaharlal Nehru. Their shared outlooks on global politics and the nature of the global system translated into both playing leading roles at the 1955 Bandung Conference, held in Bandung, Indonesia and later the Non-Aligned Movement (NAM) (Singh, 2011: 51–64). (1) However, relations with Indonesia worsened in the early 1960s on the matter of the Malaysian Federation. Indonesia objected to the formation of the Malaysian Federation, deeming it a neocolonial plot and this led to the period of Konfrantasi (or Confrontation) between Indonesia and the Malaysian Federation, wherein Indonesia carried out armed incursions and acts of subversion and sabotage against the latter. Over this period, India gave Malaysia its full diplomatic support, while Malaysia afforded India its full diplomatic support during the 1962 India-China border war (Singh, 1995: 522–524). The formation of ASEAN in 1967, with the end of the Sukarno era in Indonesia, heralded a new era for South East Asia and India was keen to be part at this project of Asian unity, although India did not join as a founding member of ASEAN (Mishra, 2018: 90–91). This high point of the relationship with ASEAN was over-shadowed by broader global events which took place from the early 1970s. The US-China rapprochement of 1972 fundamentally changed the India-ASEAN relationship for the next two decades. India’s security relationship with the Soviet Union deepened considerably in this period, in the aftermath of the Soviet Union’s role in apparently deterring US action against India in the context of the civil war in East Pakistan (Kapur, 1972: 463– 474). These two events set the stage for India and ASEAN to increasingly occupy opposite ends of the Cold War ideological divide. The Kampuchean conflict led to the culmination of this shift between India and ASEAN. The ASEAN states, together with China and the United States, lent maximum diplomatic support for the Khmer Rouge regime in Kampuchea (the DK or Democratic Kampuchea Government), robustly denouncing the Vietnamese-installed regime in Kampuchea (the PRK or the People’s Republic of Kampuchea). The PRK was, in turn, supported by Vietnam and the Union of Soviet Socialist Republics (USSR). India at the outset of the invasion, in 1978, remained impartial, as the then Janata Party government sought to represent India as nonaligned in this conflict between the two superpower blocs. Indira Gandhi’s return to power in 1980, however, led to India recognizing the PRK government in July that year (Buszynski, 1986: 232). ASEAN countries viewed this development as an indication of India joining the Vietnam-USSR camp diplomatically and this perception affected relations with most of the ASEAN states, especially Singapore. For Singapore, this was a clear instance of a larger country using force against a smaller neighbour to effect regime change

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and thus a threat to its own national interests. Singapore-India relations, as a result, experienced their lowest point during this period (Acharya, 2000: 80–101). This downward trend in the relationship, within the context of the broader politics of the Cold War persisted till the end of the 1980s. The early 1990s, however, would herald structural change to the Singapore-India relationship and will be discussed in the next section of this paper.

“Look East Policy”: Singapore as First Mover The end of the Cold War and the dissolution of the Soviet Union led to a deep angst among Indian policymakers. The enduring pillars of Indian foreign policy stressed non-alignment (with a slant away from the US more than the Soviet Union) and domestic economic self-reliance based on an aversion to the trade and economic liberation models pursued by states in East Asia. This consensus began to unravel as India found itself relatively isolated in a radically transformed global system in the early 1990s. It was in this context that India’s leaders embarked on its “Look East Policy” (LEP), first articulated by then Prime Minister Narashima Rao in Singapore in 1994 (Singh & Rahman, 2010: 70–97). India’s LEP is usually viewed as a change in foreign economic policy, in the first instance, with military elements occurring in later phases. However, in the case of Singapore-India relations, this initial shift involved military and diplomatic elements, with the attendant economic aspects following later. Singapore and India began discussions about military cooperation as early as 1992, when Prime Ministers Rao and Goh Chok Tong met at the Non-Aligned Summit in Jakarta that year. This led to joint naval exercises between India and Singapore in 1993 and by 1994, the two countries signed a Memorandum of Understanding (MOU) to begin institutionalizing their defence relationship (Strait Times, 1994). A significant aspect of this MOU involved Singapore’s navy obtaining access to Indian submarines and anti-submarine warfare training. Singapore became the first country to be allowed such access by India at that point in time (Indian Express, 2004). On the diplomatic front, Singapore was one the key supporters for India joining ASEAN first as a sectoral dialogue partner in 1992 and as a full dialogue partner in 1995 (Sridharan, 2003: 26–29). Singapore was one of the strongest supporters within ASEAN for India to be one of the East Asia Summit’s founding members in 2005, thus enabling India’s entry into an ASEAN-led, East Asian regional order (Sikri, 2009: 115–127). From the early 1990s, Singapore was India’s gateway to East Asia. From Singapore’s perspective, the end of the cold war afforded ASEAN both opportunities and challenges in managing the security dynamics within South East Asia. The key was to manage the influence of great powers within South East Asia by forging a stable balance of power to cope with the increasing influence of China in the post-Cold War era. Regional states in South East Asia had constant concerns about the US’s military and diplomatic commitment to the region in the aftermath of the Cold War. In this context, Singapore was keen to engage a re-orienting India, undergoing its domestic

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economic reforms and slowly shedding some of its deep-seated anti-US sentiments, within the regional geopolitics of South East Asia. Singapore viewed India’s growing economic and subsequent military and diplomatic weight as an advantage in shaping a multipolar balance of power within South East Asia. India’s growing military and diplomatic engagement with Singapore extended to the economic realm as well. Singapore and India signed the momentous Comprehensive Economic Cooperation Agreement (CECA) in 2005, encompassing trade in goods, in services, investment protections, among other features. The IndiaSingapore CECA was the first of its kind economic agreement India had ever entered and once again established Singapore as the first mover within South East Asia in India’s engagement of the region (Ministry of Trade and Security, Singapore, n.d.). By the early 2000s, the Singapore-India relationship had further blossomed in the military and diplomatic realms. The rising level of confidence in the defence relationship led to the bilateral Defence Cooperation Agreement in 2003, which led to the 2004 India-Singapore Defence Policy Dialogue in March 2004. The dialogue facilitated regular high-level consultations on bilateral and regional security issues and signalled the deepening defence relationship between the two countries (Ministry of Defence, Singapore, n.d.). Following a 2004 agreement, Singapore also received unparalleled access to Indian military training facilities, thus allowing the Singaporean army and air force to conduct exercises on Indian territory and over Indian airspace. By 2007, Singapore was granted a five-year lease of the Kalaikunda air base in West Bengal. This enables the Singapore air force to train in India as well as place its personnel and equipment at the base over the long term (Joseph, 2007). Correspondingly, Singapore and India signed a five-year agreement in 2009 to grant the Singapore army more access to firing ranges in India for artillery and armour exercises as well as permitting it to place its assets in India for the period of the agreement (Indian Express, 2008). Beyond the strictly bilateral level, Singapore and India, at that point, also participated with third countries in various defence exercises. Singapore hosted Indian and United States warships jointly patrolling the Malacca Straits in 2002, extending Singapore’s symbolic support for the growing defence relationship between India and the US. India’s invitation to Singapore to join in Exercise Malabar in 2007, was a landmark event as this exercise began as a bilateral exercise between the United States and Indian navies, with the addition of Japan and Australia over time (Cherian, 2007). This broadening and deepening of the defence relationship served Singapore key security interests. As outlined earlier, Singapore’s central strategic aim has been constructing a stable, varied and multipolar balance between the great powers in South East Asia. It has sought to do so by cultivating great power interest in South East Asia in general, and in Singapore in particular. Great powers, in this calculus, should be incentivized to have a stake in Singapore’s survival and in the region’s stability. Singapore, as part of this strategy, seeks to diversify its partners to prevent dependency on a single great power. This facilitates Singapore’s autonomy, as well as provides regional states less room to seek great power patronage from a single great power against Singapore. India’s key geostrategic location in the Indian Ocean

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and its growing inclination to look beyond its immediate South Asian region fit well with Singapore’s strategic aims (Singh, 2020: 259–264).

‘Act East’ and the Modi Era: Highs and Lows The period between 2000 and 2010 marked a high point in bilateral relations across economic, military and diplomatic realms. From about 2010, there was a growing convergence between ASEAN and India on pushing greater economic connectivity, specifically via land connectivity. In this instance India’s Northeast Region (NER) serves as India’s land gateway to South East Asia via Myanmar. In conjunction with ASEAN’s own plans to increase physical connectivity within South East Asia as well as with neighbouring countries, India and ASEAN agreed on a masterplan on road connectivity at their annual summit in 2010 (Osius & Rajamohan, 2013). The India-Myanmar-Thailand (IMT) Trilateral Highway was a means to improve land connectivity between India and South East Asia, with the aim of fostering economic development for India’s NER as well as border communities in Myanmar. Singapore was a keen supporter of this initiative and signalled this when Singapore’s then foreign minister, K. Shanmugam, specifically visited Assam as part of his official trip to India in 2012. To demonstrate Singapore’s support for the economic potential of greater India-ASEAN land connectivity via India’s NER, he met members of Assam’s business community and the Chief Minister during this trip (Economic Times, 2013). This decade, however, also presented certain challenges for the bilateral relationship. The Little India riots in Singapore in December 2013 caused a fair amount of debate within India about the treatment of blue-collar workers who were Indian citizens working in Singapore and inevitably translated into certain difficult conversations at the official level (Economic Times, 2014). From Singapore’s perspective, the riots were a domestic law and order problem, which were dealt with under Singapore’s laws and not the concern of foreign governments. The strong bilateral ties between the two states, however, allowed the bilateral relationship to weather this isolated incident but it was an important reminder of the way domestic politics can impinge on the Singapore-India relationship even when there was growing convergence of interests and perspectives at the official level. The victory of the Bharatiya Janata Party (BJP)-led coalition in India’s general elections in 2014 evoked a quiet optimism for many countries, including Singapore. From the outside looking in, the electoral victory marked a potential transformation of the Indian state. This was the first time since 1984where a single political party had managed to win a majority of seats in India’s general elections. It also marked the emergence of Narendra Modi as the BJP’s undisputed leader, which was again a departure from the earlier pattern of diffused centres of power within India’s ruling coalition governments since the late 1980s. These two features seemed to portend a greater amount of policy clarity and execution for those watching India from the outside. Within South East Asia, two other factors evoked optimism in the aftermath

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of the BJP victory in 2014. Since 2010, despite the progress made since the early 1990s, there has been widespread frustration within ASEAN about India’s failure to match its promise as key player in an ASEAN-led East Asian regional order. The key issues related to India’s seemingly slow pace of economic liberalization as well as an apparent reluctance or inability to participate sufficiently in the various ASEAN-led multilateral institutions India had joined (Singh, 2018). The BJP’s strong victory in 2014 had the potential to address these concerns. Firstly, the BJP, unlike the Congress Party, was not as ideologically constrained by India’s earlier socialist economic policies and thus more likely and able to effect greater economic liberalization. This would allow it to be more economically integrated within the East Asian multilateral order, with important strategic advantages for South East Asian states. For Singapore, given its position as a free trade port city, this was especially important as it increasingly looked to more great powers having an economic stake in East Asia’s economic growth. Secondly, the BJP, again as compared to the Congress Party, was likely to be more politically able in developing closer military and strategic ties with the US. This again was vital for South East Asian states such as Singapore. India’s growing defence and strategic ties with the US helped in maintaining a pro-status quo stable balance of power in East Asia. As a corollary, there was a sense that a BJP-led government would be more willing to assert India’s role beyond South Asia, specifically in proximate East Asia. Singapore, like certain other South East Asian states thus hoped for a politically confident Indian government domestically, with a desire for growing ties with the US, as well as wanting to play a more engaged military and economic role beyond its immediate region (Singh & Tan, 2022). Looking in from the outside, the early days of the Modi government seemed to validate some of the early optimism outlined above. Firstly, the BJP has demonstrated the will to unfetter Indian foreign policy from earlier entrenched concerns about closer relations with the US. The Congress-led United Progressive Alliance government managed to seal the historic 123 Agreement with the US but then Prime Minister Manmohan Singh endured considerable domestic political costs for this policy within his governing coalition as well as within his own Congress party. Prime Minister Modi’s BJP did not seem to domestically agonize on this issue, and this has led to India developing an increasingly closer and deeper defence relationship with the US. The successful conclusion of the Logistics Exchange Memorandum of Agreement between the two countries in 2016 essentially designated India as one of the US’ closest defence partners and crosses a key threshold in bilateral defence technology transfer and cooperation (Roy, 2020). Certain strategic divergences, such as policy towards Iran and the future of Afghanistan remained during the BJP’s first term, which inadvertently relate to India’s perceptions of Pakistan’s role in the region. Despite these specific differences, defence relations between India and the US have never been closer. For Singapore, this is a positive development as it exhibits a self-assured Indian government prepared to undertake pragmatic strategic choices to play a more effective security provider role both regionally and globally. Secondly, India’s relations with China were considerably reshaped during Modi’s first term. India had accepted the challenge of China as a strategic competitor

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within South Asia and the broader Indian Ocean and recognized that this will be a multidimensional competitive relationship across diplomatic, defence and economic domains. The Modi government accepted the reality of a competitive relationship but aimed to manage it so as not to lead to tensions beyond a specific level. It also accepted that India, while being a strategic competitor with China, needed to continue its economic engagement with China (Pant, 2018). This change in India’s approach to China was welcomed by countries such as Singapore as it signalled India’s willingness to address China as a strategic competitor in South Asia and beyond while still staying committed to India’s economic liberalization and enmeshing itself within ASEAN-led regional economic and security multilateral processes. However, towards the end of the Modi government’s first term and the beginning of its second term, some of the earlier adjustments in Indian foreign policy came under a significant amount of stress. Many states in East Asia, including Singapore, had hoped for a renewed Indian commitment to deeper economic engagement, especially in the context of the BJP’s public commitment to undertake difficult economic reforms both domestically and in its foreign relations. India’s eventual decision to not sign on to the Regional Comprehensive Economic Partnership (RCEP) in late 2019, after earlier commitments that it would join RCEP, was a major setback for many countries in East Asia, particularly Singapore. India’s decision has raised significant reservations about the trajectory of India’s liberalization agenda and assumptions about the BJP’s ability to deliver these deep structural reforms. For Singapore, this signalled India’s inability to meaningfully participate in East Asian economic multilateralism, which for many East Asian states is a key aspect of a broader ASEAN-led East Asian regional order (Krishnan, 2021). India’s Atmanirbhar Bharat (loosely translated as “self-reliant India”) vision announced by PM Modi in 2020 seems to signal, for observers outside India, a shift away from the BJP’s earlier ideological commitment to economic and trade liberalization to one of raising trade barriers and economic self-reliance (Sen & Vater, 2020). Singapore, together with other East Asian states, such as Japan, has been at the forefront of convincing Indian leaders to join RCEP. There was an appreciation of Indian concerns relating to its large trade deficit with China growing significantly under RCEP but there was also an impression that the BJP’s strategy towards China had experienced a shift towards the end of PM Modi’s first term. India’s more assured and pragmatic relationship with the US was viewed favourably by many East Asian states. Indian requests to play a security provider role beyond its immediate South Asian region were also appreciated by several East Asian states such as Japan, Singapore and Thailand, to name three prominent examples. India’s desire to join the coordinated patrols in the Straits of Malacca to counter piracy was one such initiative by the Modi government (Peri, 2017). This was perceived as a sign of increasing Indian confidence and capability to play a larger security role in East Asia, despite the long-standing misgivings among certain littoral states on the role of non-littorals in the Straits of Malacca. However, as Indian attempts to reach some form of grand diplomatic bargain with China faltered by the end of Modi’s first term, its broad approach towards China seemed to have shifted by Modi’s second term. This shift is discernible from the

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vigorous drive for the “Indo-Pacific” as a replacement for the “Asia–Pacific” when it came to India’s diplomatic and strategic language in East Asia (Pant & Saha, 2020: 187–206). This in turn, has made several states in South East Asia, including Singapore, uneasy. This discomfort has also arisen from the way Donald Trump had utilized the “Indo-Pacific” as a strategy intended to drive back against China’s seeming aggression in East Asia. ASEAN, being both the architect and lead player of the growing number of Asia–Pacific institutions, was faced with a dilemma. On the one hand, the Indo-Pacific reinforced India’s place within the East Asian strategic landscape, but it was led by a small group of states which were also members of the Quadrilateral Security Dialogue (or the Quad). India’s wish to play a larger role was appreciated by most East Asian states but the way it chose to do so via the discourse of the Indo-Pacific seemed exclusionary (see, for example, Tan, 2020: 131–148). For the first time since the end of the Cold War, Indian strategic ambitions in East Asia were too audacious for the ASEAN member states. India’s shift in dealing with the threat posed by China also increasingly seemed to manifest in economic terms, leading it to increasingly decouple itself from China. This, inevitably, led to its decision to not join RCEP and was viewed as a significant setback by Singapore for India’s role within an ASEAN-led regional architecture in East Asia.

Indo-Pacific, Asia–Pacific and the Way Forward Despite official Indian statements to the contrary, there is a widespread view, especially within East Asia, that India has decided to slow or even halt its economic liberalization trajectory, specifically when it came to external trade. Some have argued that this is not a broad turn inward economically but rather an attempt to decouple India from China economically, with repercussions for East Asian economic multilateralism, given China’s over-whelming role within East Asia’s economic order. There is also a perception within South East Asia that India has lost its patience with an ASEAN-led regional security and economic order, in tandem with India’s deteriorating bilateral relationship with China (Singh, 2021). Singapore, like several other countries in South East Asia, view Indian foreign policy as having shifted from about 2019. India looks to increasingly decouple itself from China in all spheres and has shifted to a stronger balancing position against China. The latter disposition is evident from India’s stronger push for an “Indo-Pacific” vision for the Pacific and Indian Oceans as well as its increasing focus on the QUAD as an increasingly key plank of India’s management of the threat from China (Pant, 2022). Overall, for many observers, the high point of India-South East, and Singapore-India relations was the decade of the 2010s and there was a clear shift from about 2019. Despite the difficulties in the India-Singapore relationship more recently, there have been attempts to find new areas of strategic understanding between the two countries. India’s most recent Indo-Pacific Oceans Initiative (IPOI) is an attempt by India to fashion a loose and non-binding form of cooperation across the Indo-Pacific, and it has gone to great lengths to convince South East Asian nations to join this

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initiative (Panda, 2020). Despite early indications that Vietnam was keen to join the IPOI, the only other countries part of this India-driven initiative thus far are France, Australia Japan, the United Kingdom and Italy. PM Modi launched the IPOI during the 2021 EAS Summit, looking for ASEAN countries to lend legitimacy to this initiative by joining it. The absence of any ASEAN country’s formal participation in the IPOI again points to the possible strategic space that has grown between India and ASEAN countries such as Singapore since 2019. Singapore feels any Indo-Pacific security initiative or arrangement would be detrimental on two accounts. Firstly, the centrality of ASEAN, as the convenor of regional institutions and processes, faces risks from Indo-Pacific security-related initiatives. Secondly, as the convenor of strategic dialogues taking place within East Asia, the Indo-Pacific security initiatives are perceived as exclusionary given China’s clear stance that Indo-Pacific security narratives as part of the discourse to legitimate the strategic balancing of China across the Indian and Pacific Oceans. The need to commit to ASEAN-led regional security processes and institution, which includes the key major powers makes the Indo-Pacific a challenging proposition for Singapore and other ASEAN states. However, the most recent Indo-Pacific Economic Framework (IPEF) initiative demonstrates a possible point of convergence between India and Singapore. Both countries have signed up for this US-led initiative with the aim of supporting greater US economic engagement in the Indo-Pacific region and serving as a course correction of the US’s pull out of the Trans-Pacific Partnership (TPP) during Donald Trump’s tenure (Forough, 2022). It also serves as an opportunity for India to reengage East Asian states within an economic multilateral framework and serves to reverse some of the negative impacts of India’s pulling out of the RCEP. In addition, it helps to dispel lingering concerns within East Asia about India’s commitment to economic and trade liberalization despite the IPEF not covering tariff reductions between participating states. Singapore, like several other East Asian states, wish to see greater Indian economic engagement with countries in East Asia and the IPEF is a good starting place for this to take place. In tandem with India’s increasing bilateral and mini-lateral engagement with states in South East Asia in the defence and security domains, Singapore would be keen to see the economic pillar of that engagement built up over time as well. This will allow countries such as Singapore the space to have greater options when it came to supply chains and trade and investment ties with external powers. India’s relations with Singapore have developed steadily since the early 1990s, and despite some issues since 2019, the outlook for future ties is favourable. India’s growing defence, and hopefully economic ties with the US and countries friendly to the US, will help drive the India-Singapore relationship further. India’s desire to play a larger role in East Asia has been strongly supported by Singapore since the 1990s and as India reaches a new point in its engagement with East Asia, Singapore-India relations will be a key pivot for India’s ambitions and aims in East Asia.

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References Acharya, A. (2000). Constructing a security community in Southeast Asia: ASEAN and the problem of regional order (pp. 80–101). Routledge. Buszynski, L. (1986). Soviet foreign policy and Southeast Asia. Croom Helm. Cherian, J. (2007, September 21). The Battle is on. Frontline. https://frontline.thehindu.com/other/ article30192939.ece Economic Times. (2013, November 23). Tarun Gogoi stresses on strong regional trade ties in Singapore. https://economictimes.indiatimes.com/news/politics-and-nation/tarun-gogoi-stresses-onstrong-regional-trade-ties-in-singapore/articleshow/26269187.cms Economic Times. (2014, July 1). India, Singapore talks little India riots, smart cities. https:// economictimes.indiatimes.com/news/economy/foreign-trade/india-singapore-talks-little-indiariots-smart-cities/articleshow/37585358.cms Forough, M. (2022, May 26).America’s Pivot to Asia 2.0: The Indo-Pacific Economic Framework. The Diplomat. https://thediplomat.com/2022/05/americas-pivot-to-asia-2-0-the-indo-pac ific-economic-framework/s Indian Express. (2004, April7). India to Singapore: You can hold military exercises on our soil. Indian Express. (2008, August13). After Kalaikunda, Singapore to train at India Army firing ranges. http://archive.indianexpress.com/news/after-kalaikunda-singapore-to-train-at-ind ian-army-firing-ranges/348181/ Joseph, J. (2007, October10). Singapore ‘leases’ IAF base for 5 yrs. DNA—Daily news & analysis. Kapur, A. (1972). Indo-Soviet treaty and the emerging Asian balance. Asian Survey, 12(6), 463–474. Krishnan, A. (2021, April 14). We hope India will reassess stand on trade pacts, says Singapore Foreign Minister. The Hindu. Ministry of Defence, Singapore. (n.d.). Inaugural India-Singapore Defence Policy Dialogue. https:// www.nas.gov.sg/archivesonline/data/pdfdoc/MINDEF_20040322001.pdf Ministry of Trade and Industry, Singapore. (n.d). Singapore-India Comprehensive Economic Agreement (CECA). https://www.mti.gov.sg/Improving-Trade/Free-Trade-Agreements/CECA Mishra, R. (2018). Twenty-five years of India-ASEAN ties: An assessment. AEI Insights, 4(1). Osius, T., & Rajamohan, C. (2013). Enhancing India-ASEAN connectivity. CSIS. Panda, J. (2020, April 7). The strategic imperatives of Modi’s Indo-Pacific Ocean initiative. EastWest Centre Asia Pacific Bulletin. East West Center, Honolulu, Hawaii. Pant, H. (2018, May 1). Modi and Xi in Wuhan: Bringing normalcy back to the India-China relationship. The Diplomat. https://thediplomat.com/2018/05/modi-and-xi-in-wuhan-bringing-nor malcy-back-to-the-india-china-relationship/ Pant, H., & Saha, P. (2020). India, China, and the Indo-Pacific: New Delhi’s Recalibration Is Underway. The Washington Quarterly, 43(4), 187–206. Pant, H. (2022, March 20). India and the Quad: Chinese belligerence and Indian resilience. ORF Commentaries. https://www.orfonline.org/research/india-and-the-quad/ Peri, D. (2017, November 29). Singapore for more cooperation with India in Strait of Malacca, Andaman Sea. The Hindu. Roy, S. (2020, November 3). Explained: BECA, and the importance of 3 foundational pacts of India-US defence cooperation. The Hindu. Sen, R., & Vater, J. J. (2020, June 24). Modi, the RSS and a Self-Reliant India. ISAS Insights. Institute of South Asian Studies, NUS, Singapore. Sikri, R. (2009). Challenge and strategy: Rethinking India’s Foreign Policy (pp. 115–127). Sage. Singh, S., & Rahman, S. S. (2010). India-Singapore relations: Constructing a “New” bilateral relationship. Contemporary Southeast Asia, 32(1), 70–97. Singh, A. (2018, January 24). India’s ‘Act-East’ must satisfy ASEAN expectations. Raisina Debates. https://www.orfonline.org/expert-speak/indias-act-east-must-satisfy-asean-expectations/ Singh, S. (2021, February 25). India and Southeast Asia: A drift in the Stormy Seas? IDSS Paper. Institute of Defence and Strategic Studies (IDSS), S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NUS), Singapore.

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Chapter 11

Education and Knowledge-Based Economy in India in the Last Two Decades and Some Suggestions to Vietnam Do Thu Ha

Abstract India-Vietnam relations have been through several phases of development. It can be said that with the induction of Vietnam into ASEAN in 1995, the relationship between the two countries went from strength to strength. With the turn of the millennium when India launched its “Look East Policy Phase II” relation with Vietnam became more impactful. The main reason behind this was the China factor, as both the countries are at loggerhead with China over territorial disputes. In the initial years, the focus of relations between these two countries was trading. India ranked 9th among all the trading partners of Vietnam, in fact India’s investment is much more than her neighbouring countries like China, Japan and South Korea. Incidentally in 2014, the then Minister of External Affairs Smt. Sushma Swaraj, on her visit to Hanoi, stressed the importance of the “Act East Policy”. 2014 onwards there was a sea of change in the relationship between India and Vietnam, from being a trading partner to a strategic and cultural partner. The sectors which got impetus were defence, tourism and education, especially knowledge and skill-based development. The paper mentions one of the most crucial issues in the age of globalization, that is the relation between the economy and education, which includes three main components: (1) the knowledge-based economy in India in the last two decades through analysing the actual situations in the development of the Indian economy and the reasons for Indian economic growth, (2) the role of education in developing the Indian economy in such aspects as the Indian ambition to become an educational superpower, the “Great Leap” and the attraction of Indian education; the shortcomings in brain drain and educational strategies in India and 3. some suggestions to Vietnam in the friendship and cooperation to develop between the two countries. Keywords Education · Knowledge and skill-based India-Vietnam Act East Policy D. T. Ha (B) Department of Indian Studies, Faculty of Oriental Studies, Vietnam National University, Hanoi, Vietnam e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 L. Ghosh and A. B. R. Chaudhury (eds.), India’s Relations with Neighboring South and South East Asian Countries, Dynamics of Asian Development, https://doi.org/10.1007/978-981-99-4610-5_11

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Introduction Today’s society is based on the acquisition, sharing and creation of knowledge. India, along with some of the other middle- and low-income countries like Brazil, Russia, China and the Republic of Korea, is competing with high-income developed nations like USA and Japan in the knowledge sector. India is being able to compete because it has to its advantage a big pool of knowledge workers like scientists, engineers and researchers available at low cost. Powell and Snellman (2004: 199–220) defined Knowledge Economy as production and services based on knowledge-intensive activities that contribute to an accelerated pace of technological and scientific advance as well as equally rapid obsolescence. Earlier works on Knowledge Economy focused on the effect of science and technology on socioeconomic development (Machlup, 1962; Noyelle, 1990; Porat, 1977; Stanback, 1979). Some works on Knowledge Economy highlight the contribution of knowledge-intensive industries like information technology industries to national productivity (Brynjolfsson & Hitt, 2000: 23–48; Gordon, 2000: 49–74). Yet another modern and important dimension of the study on Knowledge Economy is the contribution of innovation and learning to industrial performance (Davenport & Prusak, 1997; Drucker, 1993; Nonaka & Takeuchi, 1995). In the case of contemporary Vietnam, education policymakers around the world marvel at Vietnam’s success in providing access to general education and in boosting learning outcomes. Despite its relatively low level of economic development, Vietnamese students outperform students in Organization for Economic Co-operation and Development (OECD) countries on average in the Programme for International Student Assessment (PISA). What is the secret to this success? Following decades of colonization and conflict, Vietnam has transformed into an “emerging dragon” across multiple social and economic sectors, including education. The researchers have followed the evolution of postwar Vietnam’s education system and highlighted some of the key reforms implemented from 1975 to the present. It provides the Vietnamese Government’s rationale for the reforms it pursued, the primary reasons for their success, and the challenges encountered along the way. The facts illustrate that Vietnam’s education system shares common characteristics with other successful education systems in East Asia. This includes the government’s strong commitment to educational development, supported by high accountability mechanisms; relatively high public spending with a focus on investing in general education, basic inputs, and equity, together with high household investment in education; attracting and supporting qualified teachers; strong investment in preschool education; and strategic use of assessments. The Vietnamese Government’s unshakable commitment to improving people’s learning, together with high accountability and autonomy for schools, supported by a strong internal and external monitoring and reporting mechanism, have driven the continuous expansion and improvement of the education system. The country also benefits from cultural aspects such as placing a high value on education, high parental expectations and highly disciplined environments for teachers and students. Although some of these factors are sociocultural—which may

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not be easily replicable in other countries—others are policy decisions from which leaders of other countries may learn. However, despite its impressive success in achieving strong performance to date, Vietnam’s education system faces critical challenges as the country strives to move towards a knowledge-based economy. First, access to secondary education is low and inequitable. Second, although the government is committed to improving education quality by enhancing competency-based teaching practices and reforming school curricula and textbooks, clear guidance on and facilitation of enabling conditions for competency-based teaching are still needed. Third, as Vietnam’s economy grows, it needs to invest more in higher levels of education and lifelong learning to ensure students exit the system with the knowledge and skills relevant to labour market needs. The tertiary system suffers from structural deficiencies, including a lack of funding and a weak sector strategy. The government is aware of these weaknesses and is committed to overcoming them so that the country can continue strengthening its human capital as a way to further spur economic growth. And here is the meeting point between India’s and Vietnam’s education systems where Vietnam can learn from India’s lessons.

Knowledge-Based Economy in India Over the Past Two Decades Economic Development Status of India Along with China, India is considered to be the biggest global economic success story of the past quarter-century, with growth rates typically between 5 and 10% per year. Although the country’s growth rate has recently fallen below 5% due in part to the global economic slowdown and the COVID-19 pandemic, the resounding victory of the BJP (Bharatiya Janata Party, i.e. People’s Party of India) during the Spring 2014 and 2019 elections with its stress on strong business performance has convinced many people that the growth would start picking up again in the near future. The radical reform of the opening up of market economy in the 1990s has helped India re-integrate into the world market. Thirty years ago, giant India was tied to a so-called Hindu growth rate of just 3.5% annually. But since 2005, India’s economic growth has more than doubled, averaging 9%. It is mainly driven by domestic demand, and in 2009, despite the global economic slowdown, India still maintained a growth rate of 8.7% and thus surpassed Korea and ranked third in Asia (OECD, 2013) (Table 11.1). India has got one-fifth of the world’s population and now generates 2% of the total global income, while Europe makes up 8% of the world’s population but gains 31% of the total global income (Worstall, 2015). In the meantime, constituting less than 5% of the world’s population, Americans generate and earn more than 20% of the world’s total income (Office of the US Trade Representative, 2023). However, this

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Table 11.1 India’s GDP growth rate from 1990 to 2014 Period

1990–1994

1995–1999

2000–2004

2005–2009

2010–2014

India’s growth rate (%)

10.3

6.6

5.1

6.9

7.4

Source GDP growth (annual %) by The World Bank

ratio will change rapidly. According to many economists, within the next 15 years, India will surpass both Japan and Germany. The development of India is very surprising because until recently, India was also a “poor house” of the world with a very large illiterate population. A third of its adults and more than 50% of women cannot read or write, but at the same time, India has the second largest pool of engineers, scientists and computer experts working in the US (International Literacy Day, 2020). The Indians are at the forefront of information technology, located mainly in laboratories in Bangalore, the Silicon Valley of Asia. Nowhere, not even in California, are there as many IT specialists and engineers working as in Bangalore. The explosive growth of information technology is now no longer confined to Bangalore or other hubs such as Hyderabad, New Delhi and Mumbai, but has extended considerably to many areas, spreading across the country. The growth rate of Indian information technology has become such a phenomenon that Bill Gates predicted that within 10 years his Microsoft company will have to depend on the force of Indian experts. Bill Gates has now invested $1.7 billion in India to build four development centres and his largest lab outside the US will be in Hyderabad (Gates, 2013). India’s next step in the campaign to apply high technology for economic development is the establishment of new research centres in the fields of genetic engineering and biology. India pursues the goal of becoming a superpower in these fields, in which India wants to become a real competitor to the West in the process of globalization of innovation and creativity. However, in the field of scientific and technical invention, the annual number of patents in India is far behind the world level. “The PIB release tabulates the patent applications filed in medicines by Indian legal entities including companies, Research and Development Institutions & Academic Institutions from 2009 to January 2013. A varying trend can be observed with the total number of applications filed dipping in 2010–2011 to 365 from a 581 in 2009–2010. It increased in 2011–2012 to 814 but fell to 649 in 2012–2013. However, in all the years Mumbai has had the highest number of patent applications filed with Delhi in second place in 2009–2011 and Chennai from 2011–2013. Kolkata has consistently had the least number of patent applications filed” (Murthy, 2013). American researchers receive the bulk of the Nobel Prize. But India has got 380 universities and 1500 research institutes that annually train 500,000 engineers, informatics specialists and technicians, more than the US (Planning Commission, Government of India). This is a huge “sea of talents” of the world, and at some point, India will have the harvest of innovative sweet fruits. In the pharmaceutical sector, India already has big manufacturers like Ranbaxy, Wockhardt or Dr. Reddy’s and soon will lead the world, especially in the fight against AIDS. Then in medicine, heart surgeries, artificial hip

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implants are all carried out only one-fifth of the price in Europe. Finally, in armament and space research, the world already knows that nuclear power India has launched rockets and satellites into space and will soon put robots on the moon. India, recently, has probably been only second to China in economic reforms in terms of scale and achievements, but it can still be regarded as the most profound reform in India’s recent thousand-year history. It is worth remembering that during the “fateful” 1991, just 5 months before the breakup of the Soviet Union and only 3 weeks before India was in financial distress and had to ask the IMF for the last bailout loan, Shri Narasimha Rao became Prime Minister and immediately announced economic reforms. Shri Manmohan Singh, shortly after being appointed as Finance Minister, also immediately took the first step to declare a devaluation of the Rupee. Since then, from the group of slowest-growing countries in the world India has joined the “club” of the world’s fastest-growing economies with its economic size jumping six steps from 13 to 7th (calculated according to traditional GDP). And, more importantly, India has really come out of the “millennium slumber”, as the late Prime Minister Nehru called it, to step onto the world stage as a great power.

Reasons for India’s Economic Growth In the great economic race between now and 2050, India has got a host of advantages for continued rapid growth. Firstly, India has had a strong labour force due to its young population, which is more than China and far ahead of the US and Japan. The young and steadily growing population is not only a constant source of addition to the labour force but also acts as a large consumer population. They both create a large supply and a large demand, two essential factors for rapid economic growth. Secondly, India has had an intellectual infrastructure that is better than China and at par with Western countries (this infrastructure includes a team of really creative intellectuals and the government’s policy of using brains). Another important thing is that right now, India has stood in the ranks of the pioneering countries in information technology, in which software technology is second only to the US. These are indeed the key technologies for rapid growth in future. Today’s Indians are still the enterprising generation. The fact that they launched a spacecraft to probe Mars in 2014 is irrefutable proof of this. The state of Maharashtra in Western India is expected to become a “global state” and Mumbai, its capital city, being the largest city and financial centre in South Asia, is expected to become a megacity like New York or London in the not too distant future. Lastly, according to some experts, after over 30 years of economic liberalization, India has formed a unique growth model and is considered to be superior to the models of both China and the US. It is a free enterprise economy model with less government intervention compared to a free enterprise model with government intervention such as China and the US.

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However, India still needs at least 15 more years and must regularly achieve a growth rate of more than 8% per year to be able to meet the standards of a great power. In that context, education plays a very important role for India.

The Role of Education in the Indian Economy India’s Educational “Superpower” Ambition The target set by the Indian government for education is remarkable. The Indian government wants to raise the percentage of high school graduates going on to university from the current 12–30% by 2025–at par with many Western countries. India will expand its university system to meet the aspirations of a growing middle class, to expand its reach, and become a “knowledge power”. The country’s student population will increase from 12 million to over 30 million, making India one of the largest education systems in the world (Ministry of Home Affairs, 2013). Pawan Agarwal, former public servant and author of Indian Higher Education: Envisioning the Future (2009), calculated: “In terms of quantity, we will most likely be second, if not first”. With the percentage of undergraduates in the US not increasing and the UK decreasing in its undergraduate quota, “Indian students are going to be remarkable, more globally, especially in the field of technology and engineering”, predicted Agarwal (2006).

The “Great Leap Forward” of Indian Education K. N. Panikkar, Vice Chairman of Kerala Higher Education Commission, describes India’s higher education spending as a giant leap. The central budget for education in the Five-Year Plan (2010–2015) is nine times larger than the previous five-year period. But the road ahead is still quite thorny. India’s National Knowledge Board predicts that the country will need 1,500 universities compared with about 370 at present. Hundreds of new schools will have to be established, including major public universities in each state. The number of prestigious Indian Institutes of Technology (IIT) and Management (IIM) will need to expand from 7 to 15 (Ministry of Home Affairs, 2013) (Table 11.2). India’s private university sector is also growing rapidly, especially in training in information technology, engineering, medicine and administration as the needs of the middle class grow larger. But that’s not enough. To bridge the gap, the government last year introduced a bill to attract foreign universities to open branches in India. The Foreign Providers Bill is currently under consideration in Congress (https://www. mbastudies.vn/news/ 2006).

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Table 11.2 India: central government expenditure on education 2014–2021

Central government expenditure on education in India from 2014-2021 (in billion Indian Rupees) 1200 948

1000

Expenditure

818.68 800

993

850.1

723.94

600

422.19 400 276.56 200 0 2014-2015

2015-2016

2016-2017

2017-2018

2018-2019

2019-2020

2020-2021

Year

Source statista.com

The Great Attraction of Indian Education Today, India is recognized as the cradle of skilled human resources, especially in the field of science and technology. With a network of universities and colleges including international standard institutes that provide good quality education at a low cost of study and living, India is emerging as an attractive study abroad destination for international students with international students. Besides, there are many advantages. The cost of studying here is very cheap, the education is of high quality, the admission and visa procedures are simple, the degrees in India are recognized by countries around the world. These are important factors attracting students from all over the world to come here to study. With an Indian degree, you can go to another country, like the US, to continue your education. India has a system of 252 diverse and traditional universities with the majors in engineering and technology, computer science, information technology and biology, dental medicine, pharmacy and assistant medicine, and agriculture. Veterinary industry, dairy technology and agriculture, art, commerce, science and tourism management. Foreign students can be admitted directly to Indian universities. Since the courses are all in English, students who are not confident in their language ability can take an English course from 6 months to 1 year. Every year India welcomes more than 10,000 international students from all over the world (Mukherjee & Sikdar, 2013). In March 2007, St. Xavier’s College of Kolkata, one of the mainstream higher education institutions in India, announced a partnership with the University of

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Manitoba (Canada). This was the school’s first cooperation with a foreign university training institution in its 150-year history. Not only St. Xavier’s, in the two years 2007–2008, many foreign universities undertook to “shake hands” with Indian universities, such as Harvard University, Kellogg, Michigan, Carnegie Mellon, Georgia Institute of Technology (USA), Grenoble Ecole de Management School (France), Aston Business School (UK). At the same time, research-oriented universities such as London Business School, Stanford University and Anderson School of Management at the University of California (USA) also set up campuses in this South Asian country. Although they differ in their methods of cooperation or teaching, all foreign universities strive to meet the greatest need of Indian students: to obtain a “foreign” degree without the expense of huge foreign university fees. According to a new study by the National Institute of Educational Planning and Management in India, so far more than 130 Indian universities have cooperated with foreign schools to grant foreign degrees (Mukherjee & Sikdar, 2013). In 2013, according to some reports, up to 50 foreign universities wanted to open schools in India. The situation was improved during the visit in 2016 of US President Barack Obama and a delegation including presidents of American universities (Mukherjee & Sikdar, 2013). In 2013, British Higher Education Minister David Willetts and Canada’s largest-ever delegation were also in the country to discuss the issue of opening a partnership between universities. Currently, in India, there are already a number of foreign universities operating. The UK’s Leeds University offers management training with a 36-acre campus in Bhopal, central India. Lancaster University is based at the 69-acre Goenka World Institute of Education near Delhi. Both schools opened in 2009 as an association with Indian NGO partners in accordance with current law. Total foreign direct investment in the education sector in India (FDI) was US$1071.5 million from April 2000 to January 2015, as announced by the Department of Policy and Industrial Promotion—Department of Industrial Policy and Promotion (DIPP).

Brain Drain in India The paradox is that the Indian diaspora is the second largest expat community in the world with 20 million people living in more than 48 countries. If in the past Myanmar, the US, Malaysia, Saudi Arabia and Uganda were the countries with the largest number of Indians living and working, now Indian expatriates have shifted more to Western countries such as Italy, France, Spain (Fig. 11.1) and especially the US (Table 11.3). In 1960, Indian immigrants accounted for 0.1% of all immigrants in the United States. That number increased to 1.5% in 1980 and then more than doubled to 3.3% in 2000 (see Table 11.3). In 2016, Indian immigrants increased by 4.0% of total emigrants. The rapid growth of the Indian population in the United States partly reflects the situation of brain drain in India.

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Fig. 11.1 Top 5 diaspora countries. Source MEA

Table 11.3 Indian diaspora population and total immigrant population from 1960 to 2016 in the United States (unit: people, %) Year

Total diaspora

Indian diaspora Ranking

Compared to the total immigrant population (%)

Population

1970

9.619.302

30

0.5

51.000

1980

14.079.906

16

1.5

206.087

1990

19.797.316

12

2.3

450.406

2000

31.107.889

3

3.3

1.022.552

2016

37.547.315

4

4.0

1.519.157

Source Data from the 2000 Census, 2006 data from the 2016 American Community Survey; previous decades data from Gibson, Campbell, and Emily Lennon according to the United States Census Bureau, working paper no. 29; Historical Census of the immigrant population of the United States from 1850 to 1990 by the United States Government Printing Office, Washington, DC. 1999

In 2013, the Prime Minister of India, Dr. Manmohan Singh, said during the Indian Council of Scientific and Industrial Research (CSIR) awards ceremony: “We cannot satisfy ourselves. As a nation, we have not been successful in mobilizing enough private investment in science to raise investment in scientific research to 2% of GDP. We need to acknowledge that excellence has not been achieved here in all the schools and research centres, and we still haven’t been able to exert a world-class influence commensurate with the country’s vast scientific manpower” (Vân, 2012). That is why many Indians try to send their children to study abroad (Table 11.4). The most important reason when Indians leave their homeland is in search of a better education including higher living standards and conditions. Every year, India

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Table 11.4 Annual number of students studying abroad in India compared to other countries (higher education) unit: Person

The countries with the most students studying abroad 928090

China

332033

India 122195

Germany

105399

South Korea Vietnam

94662

France

89379

U.S.

86566

Nigeria

85251

loses about 2 billion USD due to the migration of 100,000 scientists and information technology to the US (DERC, 2018). As a result, at present India has got the largest transnational community in the world. In 2020, 18 million Indians were living outside their country of birth, according to UN’s International Migration 2020 report. Mexico and Russia, with 11 million each, and China, with ten million, living outside the countries, follow India in the list. Between 2000 and 2020, the size of the Indian diaspora grew by nearly 10 million, the largest in the world. India’s diaspora is mainly distributed across the United Arab Emirates (3.5 million), the United States of America (2.7 million), and Saudi Arabia (2.5 million). Australia, Canada, Kuwait, Oman, Pakistan, Qatar and the United Kingdom also host a significant number of Indian migrants (Sharma, 2022).

Brain Gain in India As said, the Indian diaspora is the largest in the world, and the remittances sent home are also the highest globally. Remittance inflows to India amounted to $87 billion in 2021, the largest in the world. The Chinese and Mexican diaspora came in next, sending $53 billion back home in the same year, according to the World Bank-KNOMAD report (Sharma, 2022). In the other side, India is also one of the first countries to implement policies to attract expatriates. In 1998, India issued India Construction Bonds only for overseas Indians and attracted $4.2 billion for economic development (http://www.wel thungerhilfe.de). In 2000, India issued a “quasi-citizenship” that allowed overseas Indians to enjoy the same rights as domestic citizens, to enter India without a visa, to

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own property in India, and to enjoy other privileges. Investment incentives are only available to overseas Indians. The Government of India also created a high-level committee to study ways to improve relations with the Indian diaspora—Department of Indian Affairs—to regularly handle their concerns; NRI City with modern infrastructure and services across the country has helped overseas Indians to actively repatriate investment in the country. Particularly in the IT field, from 2001 to 2006, this country attracted more than 30,000 engineers from the US to India, turning this country into an IT centre in Asia. The education system has got many problems. However, when compared with other developing countries, the Indian education system still won many praises from around the world along with its own identity. The intelligence of the Indians and the government’s efforts in improving the education system in general to keep talented people here are increasingly effective. From many subjective and objective reasons, workers in India today have seen real job opportunities. Once receiving serious investment from Indian government, the priority to work at home is still put on top.

Education Strategy In 2015, India became the third largest higher education system in the world with 13 million students. China today admits to university 23% of its age population, while India caters to 10%. Both countries face pressure to expand their education systems in the coming decades, and both are committed to expanding access to university— indeed, nearly half of the world’s enrolment of new students in the next few decades will be in these two countries. Both countries identify higher education as a key tool for economic development in general and are very aware of the importance of postsecondary education in general and research universities in particular as a crucial tool for the development of a more complex economy. Although the Chinese and Indian challenges were fuelled by cheap labour and cheap industrial production, the future of both countries will depend on having an educated workforce with better education or not. The Knowledge Council of India’s 2016 report considered the development of human capital as its main recommendation. At the same time, India still faces enormous challenges in its efforts to build an effective higher education system. One lesson from examining the Indian education system (for many developing countries that are grappling with similar challenges in terms of system expansion and quality assurance as in Vietnam) is that quality improvement at the system level is a long and gradual process. One of the biggest challenges facing higher education in India is providing access to education for the majority of the population who are demanding post-secondary education. A related issue is bringing equality to populations that have not been given enough attention in the student body of universities. Currently, India is still in the “elite education” stage with 10% of 18–24-year olds going to university (Surowiecki, 2007:54). The state recognized the need to increase university enrolment by up to 15% during the 11th Five-Year Plan period (2007–2012) and to 21% at the end of

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the next plan in 2017. This expansion was the largest in Indian history and entailed a dramatic growth in the number of schools and in terms of costs. China, which has reached 22% of university-age people, is moving towards mass education. This is built on a higher foundation, but also has a very significant expansion. Much of this expansion took place in the previous decade: between 1998 and 2005, both countries saw a fivefold increase in the number of new students enrolling (Altbach, 2003: 119). In 2015, the Indian Minister of Education said the rate would reach 40% by 2020 (Altbach, 2005:1–13).

Foreign Students in India Since very ancient times, India has been the centre of learning, where a wide variety of subjects such as philosophy, religion, medicine, mathematics, sociology, astrology were compiled and taught. Today, India is recognized as the cradle of skilled human resources, especially in the field of science and technology. With a network of universities and colleges including international standard institutes that provide good quality education with low cost of study and living, India is emerging as an attractive study abroad destination for international students. Since the medium of instruction is English—India is the third highest English-speaking country in the world—and a friendly environment and culture, foreign students, especially those from Asian countries find it an ideal education destination. The cities that Vietnamese students often come to study abroad are New Delhi, Bangalore, and Mysore. To be able to enter university courses, most Indian universities and institutes require applicants to have a high school diploma (equivalent to 10 + 2 of the Indian education system). International students who have obtained a high school diploma or equivalent programme accepted in India and wish to apply for admission may attach the outline of the graduation examination in their home country to find out the degree equivalence held by the candidate. For postgraduate courses, candidates are required to have a university diploma. Tuition fees and living costs: Compared to many other countries such as Australia, UK, USA, the cost of studying in India is much lower. Depending on the course, school and region, the cost of study and living can vary. It can be estimated as follows: • For university: duration 3–4 years. Medicine: 5–6 years. Pharmaceutical industry: 4 years. – Tuition from 1500 to 2000 USD/year for university. – International students are allowed to stay in the dormitory. – Personal expenses for 1 school year are about 1200 to 1800 USD/year. Includes: Accommodation, allowances, travel expenses, insurance, training equipment, laboratory equipment, computers and expenses for visits to industrial facilities. • Postgraduate: – Humanities: 2 years. – Science, technology and engineering: 1–1.5 years.

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Table 11.5 Number of foreign students studying in India Country

Income group

Iran

Fairly high

1120

1264

2180

2669

Nepal

Low

1352

1411

1728

1821

United Arab Emirate

High

1500

2034

1878

1560

Ethiopia

Low

226

302

1033

1289

Sri Lanka

Medium

582

530

466

997

Afghanistan

Low

35

65

422

976

Saudi Arabia

High

419

551

771

835

Bahrain

High

382

481

446

600

Kenya

Low

418

523

621

592

Oman

High

646

505

608

548

13,267

14,456

18,391

2120

Total number of foreign students

2004–2005

2005–2006

2006–2007

2007–2008

Source AIU Report 2004–2008

– Medical: 3 years. – 8000–10,000 USD/whole course (with accommodation and living expenses). Currently, Malaysia, Singapore and India are new destinations for foreign students, accounting for 12% of the global student market—250,000 to 300,000 students enrolled, 2010–2011 alone (DrEducation.com. 2013-08-20). In 2013, India became the most preferred destination for Asian students, ranking 3rd worldwide (European Educational Research Journal, 2014 (1): 65–73). This student flow is called the North–South flow (Tables 11.5 and 11.6).

Some Suggestions for Vietnam Since 2007, when Vietnam and India established a strategic partnership, the two countries’ high-ranking leaders visit each other every 2–3 years to further develop cooperation. The state visit of General Secretary Nguyen Phu Trong to India is another important boost. However, despite many remarkable efforts and achievements, especially in political–security relations and also in national defence, there is still a long way from reality to be called a strategic partnership in the field of economic strategic partner. By 2012, Vietnam had six countries as strategic partners, but India remained at the double-digit position in Vietnam’s trading partners. By 2013, India’s investment in Vietnam ranked 18th, while Vietnam’s investment in India was just beginning. Two-way trade has only reached about 7 billion USD, very far from Vietnam-Japan trade of 25 billion USD, Vietnam-US 30 billion USD and Vietnam-China 50 billion USD (Table 11.7).

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Table 11.6 Ten Indian universities have the biggest number of foreign students 2011–2012 No.

Name of university

Female

Male

1

University of Pune, Pune

2791

1016

3807

2

University of Mysore, Mysore

859

453

1312

3

Manipal University, Manipal

537

689

1226

4

University of Delhi, Delhi

660

471

1131

5

Osmania University, Hyderabad

559

123

682

6

Alagappa University, Karaikudi

280

288

568

7

Jamia Hamdard, New Delhi

337

172

509

8

Bharati Vidyapeeth, Pune

359

135

494

9

Indira Gandhi National Open 2843 University, New Delhi, Enrolment under Distance Education Mode

1625

4468

10

Symbiosis International University, Pune Enrolment under Distance Education Mode Total

Total

2178

9233

4964

16,375

Source AIU Report 2013

Table 11.7 Top five investors in Vietnam (As of November 20, 2020) Top five Investors in Vietnam (As of November 20, 2020) No.

Country

Number of new projects

Total registered capital (Mil. US$)

1

Singapore

225

8076

2

South Korea

573

3702

3

China

311

2402

4

Japan

251

2111

5

Taiwan

115

1999

The tourism situation also has a similar picture. The economic centre of Mumbai accounts for 40% of the country’s trade, but there is still no Vietnamese business. A market of current Indian population (that in 2021 is 1,388,027,855—138 crores) with 400 million middle-class people whose spending levels are far above the average in Vietnam and not inferior to the middle class in China, but each year Vietnam only sells about 2 billion USD of goods to India, while Vietnamese goods brought here almost anything can be consumed. In the field of education, India is home to a training system equally, English is universal throughout the country, but the number of Vietnamese students there is only about 200. According to our survey, here are some suggestions.

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On the Vietnamese Side • Should follow Indian elite training policy in some strong fields such as information technology to turn our country into a “world office” like India, not a place that provides cheap labour like China which is considered as the “factory of the world”. We also have a large and rather young population like India, doing so can both create jobs for young people and collect remittances for the country. • We can send students to study in India, save costs and still train people, but must follow the following criteria: • Choose the majors that are Indian strong points. The most popular schools in India are the Indian Institutes of Technology (IITs), the Indian Institutes of Management (IIMs), India Institute of Medical Sciences and Tata Institute of Fundamental Research. In addition, the fields of culture and art, traditional medicine, MBA, international relations are also strong points of India. • There should be a good advisory system and a thorough investigation of reliable and suitable destinations in terms of living conditions and climate. • There should be a careful selection of the students’ command of language before going. • Students should go in groups.

On the Indian Side To save costs as well as to be able to manage students while still making full use of Indian brain and language ability, we can open many schools in Vietnam such as Hoa Sen schools, APTECH schools, NIIT AN GIANG, and Hanoi-Arena. Initially, the focus should be on training in information technology, English, medicine, pharmaceuticals, genetics, nuclear power, which are Indian strong industries. In addition, we also need to refer to India’s experience in reversing the brain drain to brain gain flow. Currently, there are more than 4 million Vietnamese people living, working and studying in 103 countries and territories. Among them, although complete statistics are not available, it is estimated that about 400,000 people have received university and postgraduate training (http://www.doanhnhansaigon). This is an important source of brainpower, capable of effectively contributing to the development of the country, but whether Vietnamese enterprises can successfully attract this resource is still a big question (http://www.cphud.danang.gov.vn) (Table 11.8). Thus, if calculating a study abroad programme costs at least 10,000 to 15,000 USD, each year Vietnam sends abroad about 02 billion USD. However, at present, the Ministry of Education and Training can only control the number of international students following Project 322, with 120 foreign students having graduated back home. The rest is funded by students themselves, and not through the Ministry; so it is difficult to know the number of those who leave or return to the country and so far, there has not been any survey on the employment status of students after graduating from foreign universities to return. Figures show that about 70% of international

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Table 11.8 Outbound number of Vietnamese students studying abroad in 2013

TOP 10 DESTINATIONS FOR MOBILE TERTIARY STUDENTS (2013) Thailand, 1290 G ermany, 1415

Finland, 1151 Canada, 1134

South Korea, 2123

UK, 4048

USA, 15406

Japan, 4241

France, 5362

Australia, 12383

students do not return home after graduation. So we should also consider the lesson of India about learning about the solutions and policies of the Indian government over the past 15 years to limit the brain drain and even reverse this flow by introducing macro- and micronational policies to attract talented Indians as well as foreigners with high skills and knowledge to build the country.

Conclusion Education in India and lessons for Vietnam is a long story. The point is that we need to be alert to study and cooperate with India on the best points and strongest fields to raise the wings for our own education and economy while still avoiding the painful stumbling blocks that the Indian side had to go through.

References Agarwal, P. (2006). Higher Education in India. The need for change. Working Paper No. 180. Indian Council for Research on International Economic Relations. Altbach, P. (2003). The decline of the Guru: The academic profession in developing and middleincome countries. Palgrave MacMillan. Altbach, P. (2005). The private higher education revolution: An introduction. In P. Altbach & D. C. Levy (Eds.), Private higher education: A global revolution (pp. 1–13). Sense Publishers.

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Bennell, P., & Pearce, T. (1998). The internationalization of higher education: Exporting education to developing and transitional economies. IDS Working Paper 75, Institute of Development Studies, University of Sussex. Brynjolfsson, E., & Hitt, L. M. (2000). Beyond computation: Information technology, organizational transformation and business performance. Journal of Economic Perspectives, 14, 23–48. Central Advisory Board of Education (CABE). (2005, June). Committee report on financing of higher and technical education. National Institute of Educational Planning and Administration. Collis, B., & van der Wende, M. C. (Eds.). (2002). Models of technology and change in higher education: An international comparative survey on the current and future use of ICT in higher education. University of Twente. Davenport, T. H., & Prusak, L. (1997). Information ecology: Mastering the information & knowledge environment. Oxford University Press. DERC. (2018). Global education digest. Development Education Research Centre, UCL Institute of Education. Drucker, P. F. (1993). Post-capitalist society. Harper Bus. Economic Survey of India 2013: Policy Brief . Organization for Economic Cooperation and Development (OECD). Gates, B. (2013, May 29). Why I’m going to India. In Gatenotes: The Blog of Bill Gate. Gibbs, M. (1989). Interlinkages between services and other economic sectors. Services and development: The role of foreign direct investment and trade (pp. 9–11). United Nations Centre on Transnational Corporations. Gordon, R. J. (2000). Does the new economy measure up to the great inventions of the past? Journal of Economic Perspectives, 14, 49–74. Hindustan Times. (2020, September 8). International Literacy Day 2020: Kerala most literate state in India, check rank-wise list. https://www.hindustantimes.com/education/international-literacyday-2020 International Association of Universities. (2013). AIU report on activities 2004–2008. The Global Voice of Higher Education. https://www.iau-aiu.net/IMG/pdf/rapport_2004_2008.pdf Knight, J., & de Witt, H. (Eds.). (1999). Quality and internationalization of higher education. OECD Publications. Knight, J. (2004). Internationalization remodeled: Rationales, strategies and approaches. Journal of Studies in International Education, 8(1). Machlup, F. (1962). The production and distribution of knowledge in the United States. Princeton University Press. Ministry of Home Affairs. (2013, September). Economic survey, selected indicators of human development for major states, 2013–2014. Office of the Registrar General of India. Ministry of Human Resource Development Government of India. (2007). Selected educational statistics 2004–2005. Ministry of Human Resource Development. (2005). Annual financial statistics of education sector 2003–2004. Government of India. Ministry of Human Resource Development. (2006–2007). Annual report. Government of India. Mishra, J. K., Naseem, A., & Sharma, R. (2008). Indian Higher Education: Global challenges and local issues. JBS Working Paper Series. Mukherjee, A. N., & Sikdar, S. (2013). Public expenditure on education in India by the Union Government and Roadmap for the future. In India infrastructure report 2012 (Chapter 2). Routledge India. Murthy, L. G. (2013, March 22). Statistics of patent grants in India. SpicyIP blog. https://spicyip. com/2013/03/statistics-of-patent-grants-in-india.html NASSCOM-McKinsey Report. (2005). NASSCOM-McKinsey Report 2005, extending India’s Leadership of the Global IT and BPO industries. National Association of Software and Service Companies and McKinsey and Company. https://searchworks.stanford.edu/view/10011784 Nonaka, I., & Takeuchi, H. T. (1995). The knowledge-creating company. Oxford University Press. Noyelle, T. (1990). Skills, wages, and productivity in the service sector. Westview Press.

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Office of the US Trade Representative, 4th June 2023, Economy and Trade. https://ustr.gov/issueareas/economy-trade#:~:text=Constituting%20less%20than%205%20percent,economy% 20and%20leading%20global%20trader. Accessed on 5/06/2023 Oliner, S. D., & Sharma, K. (2007). India in the knowledge economy—An electronic paradigm. International Journal of Educational Management, 21(6), 543–568. Planning Commission. (2007). Draft report of working group on higher education for the XI plan. Government of India. Planning Commission. (2014, December). Macro-economic summary: 1999–2000 to 2014–2015. Databook for Planning Commission. Ministry of Finance. Porat, M. U. (1977). The information economy. Definition and measurement. US Department of Commerce. Powell, W., & Snellman, K. (2004). The knowledge economy. Annual Review of Sociology, 30, 199–220. Scott, P. (1998). Massification, internationalization and globalization. In P. Scott (Ed.), The globalization of higher education (pp. 108–129). The Society for Research into Higher Education/ Open University Press. Sharma, S. (2022, March 4). India’s growing diaspora makes evacuation from conflict zone now more crucial. India Today. https://www.indiatoday.in/diu/story/growing-indian-diasporamakes-evacuation-from-conflict-zone-now-more-crucial-1920797-2022-03-04 Stanback, T. M. (1979). Understanding the service economy: employment, productivity, location. Johns Hopkins University Press. Surowiecki, J. (2007). India’s skills Famine. New Yorker, pp. 16–4, 54. Teichler, U. (2004). The changing debate on internationalization of higher education. Higher Education, 48, 5–26. Tilak, J. B. G. (2004, January 24–30). Public subsidies in the education sector in India. Economic and Political Weekly, 39(4), 343–359. United Nations. (2019, September 18). Indian diaspora the largest in the world at 17.5 million: UN report. https://www.connectedtoindia.com/indian-diaspora-the-largest-in-the-world-at-175-mil lion-un-report-6208.html. Vân, N. (2012). Điều gì đang xảy ra với hệ thống giáo dục ở Ấn Độ, báo Dân Tri. Worstall, T. (2015, January 21). IMF: India’s growth to be faster than China’s by 2016. IMF Report 2015. https://www.forbes.com/sites/timworstall/2015/01/21/imf-indias-growth-tobe-faster-than-chinas-by-2016/#a366f6b39ac0. Accessed on 1/6/2023

Websites http://dantri.com.vn/giao-duc-khuyen-hoc/dieu-gi-dang-xay-ra-voi-he-thong-giao-duc-an-do-651 293.htm http://www.cphud.danang.gov.vn/index.php/phat-trien-nguon-nhan-luc/tham-khao/1665-vietnam-chay-mau-chat-xam.html http://www.doanhnhansaigon.vn/online/dien-dan-doanh-nhan/thoi-su/2014/04/1080705/chatxam-viet-o-nuoc-ngoai-de-tim-kho-tuyen/ http://www.welthungerhilfe.de https://www.mbastudies.vn/news/Are-Foreign-Providers-the-Key-to-Quality-for-Higher-Educat ion-in-India-2006/

Chapter 12

India and Indonesia in the Indo-Pacific: Time for a Greater Push Premesha Saha

Abstract The India-Indonesia relations had kicked off on a big scale with the two leading the way for the convening of the 1955 Banding Conference, also known as the first Afro-Asian meeting. After a temporary thaw in the relationship, again a big push was provided with the elevation of the ties to a Comprehensive Strategic Partnership in 2005 under the former Indonesian President Susilo Yudhoyono, who believed in the “hundred friends, zero enemies” dictum when it came to formulating his country’s foreign policy. Despite having a Comprehensive Strategic Partnership in place, the India-Indonesia relations have been staggering, it has not been able to achieve much and the two countries have a long way to go when it comes to cementing a strong strategic bond. In 2018 after the visit of the current Indonesian President, Joko Widodo to New Delhi the Shared Vision Statement of Maritime Cooperation in the Indo-Pacific was signed, along with developing its maiden deep-sea port in Indonesia’s Sabang close to Andaman and Nicobar Islands. The groundwork is in place to take this relationship a step further now especially with the Indo-Pacific region facing a strategic turmoil with the ongoing US-China tussle. Bilateral relationships, minilateral partnerships have become the byword of engagement in the Indo-Pacific. Against this background, this chapter will provide the past and the current trends of the India-Indonesia relations and will provide policy recommendations on how the India-Indonesia relations can be cemented as a truly strategic bond in the current Indo-Pacific discourse. Keywords India · Indonesia · Indo-Pacific · Indian Ocean

P. Saha (B) Strategic Studies Programme, Observer Research Foundation, New Delhi, India e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 L. Ghosh and A. B. R. Chaudhury (eds.), India’s Relations with Neighboring South and South East Asian Countries, Dynamics of Asian Development, https://doi.org/10.1007/978-981-99-4610-5_12

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Introduction Although Indonesia and India are neighbours in the Indo-Pacific region with deep historical and cultural linkages and a shared colonial past, there has been little cooperation between them and the full potential of this bilateral relationship has still not been explored. In recent Fellow, Strategic Studies Programme, Observer Research Foundation, New Delhi years, however, that has begun to change amidst the growing political engagement between the two nations. The bilateral interactions between India and Indonesia, the two largest powers in their respective regions, stretch back several millennia, primarily driven by the thriving maritime relationship across the Indian Ocean. India and Indonesia were both victims of colonialism and supported each other’s struggle for independence after the Second World War. Following independence, they were both advocates of the Non-Aligned Movement. Though initially this relationship had kicked off on a big scale, there was a temporary thaw in this relationship for several reasons. With the initiation of India’s Look East Policy, the India-Indonesia relations again began to revive. However, relations between the two countries have not picked up, and the two countries have a long way to go when it comes to cementing a strong strategic bond. With India rechristening its Look East Policy to Act East Policy in 2014, the stage seemed set for a revival of India-South East Asia relations in general and the India-Indonesia relations in particular, given that Indonesia is the biggest country in terms of size and influence within the ASEAN. In this light it is necessary to explore answers to some questions: Has a shift really taken place in the India-Indonesia relations with the coming of the Act East Policy? If so what are the reasons? Has the full potential of the relationship been explored? What more can be done for the India-Indonesia relations to emerge as a substantial one in the emerging dynamic of the Indo-Pacific?

Past Trends in India-Indonesia Relations: Why a Period of Relative Neglect? During much of the cold war, the relationship between India and Indonesia was marked by a period of “coexistence and rivalry”. India and Indonesia shared similar strategic perspectives during much of the cold war, despite periodic friction between them. Both claimed non-aligned status as a way of leveraging their influence between the competing Western and communist blocs. From the 1960s, both shared significant concerns about Chinese expansionism and subversion in the region. Both also claimed a leading role in their respective regions and, with only limited success, sought to minimize the influence of external powers in their respective neighbourhoods (Brewster, 2011: 222). India-Indonesia relations have seen many ups and downs since the Bandung Afro-Asian Conference (1955), when the combined voices of Indian Prime Minister Jawaharlal Nehru and President Sukarno of Indonesia were able to effectively put forward the concerns and interests of non-aligned countries at

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international forums. While the Bandung Conference witnessed the high watermark in the bilateral relationship, the relationship reached its nadir during the Indo-Pak War of 1965, when the Indonesian Government not only supplied weapons to Pakistan but also reportedly stage-managed a mob attack on the Indian embassy in Jakarta in 1962 and again in 1965. India’s friendship with communist Vietnam and the USSR and Indonesia’s domestic and regional priorities further slowed down the level of engagement between the two countries (Shekhar, 2007). India and Indonesia were less supportive of each other’s broader regional ambitions. The rivalry between India and Indonesia during the early 1960s was aggravated by Indonesia’s increasing tilt towards communist China, including the perceived formation of a China-IndonesiaPakistan axis hostile to India (Brewster, 2011: n.1). Sukarno’s overthrow in the aftermath of an attempted coup in September 1965 subsequently eased tensions between the two countries. Chinese political influence in Indonesia was swept away, and Jakarta moved quickly to repair damaged relations with India. Indonesia also withdrew its military support for Pakistan and backed India’s claims over Kashmir. Indonesia and India began sharing the view that China constituted the most significant threat to the region. In spite of some easing in the relations, there were still fears in the Indonesian minds about India’s size and influence and this explains why initially Indonesia was wary of letting India join the ASEAN. There were also recurring doubts over India’s relationship with the Soviet Union, and in India’s role in assisting the growth of Soviet naval power in the Indian Ocean. By the mid-1980s, there was open concern in Indonesian military circles about India’s naval expansion programme and the possible use of India’s Great Nicobar Island by Soviet submarines. Strategists like David Brewster of the Australian National University have also commented that, “Indonesia did not really consider India a ‘neighbour’ but rather, an extra-regional power like the US, Japan, China and the Soviet Union. India was also seen as a comparable power, holding pre-eminence in South Asia whereas Indonesia played a leading role in South East Asia” (Brewster, 2011).

Change in Thinking: Easing of Ties Slowly, especially after President Suharto became President, much of these doubts downgraded and Indonesia became one of the countries which pushed for India becoming a dialogue partner in the ASEAN. India’s growing relations with the Soviet Union, Vietnam began to be seen as a balancing factor to the rise of China in the region. India launched its “Look East” policy in early 1990s to boost its economic growth and to promote economic engagement with the fast-growing economies of South East Asia. Building on their historical and cultural linkages, both the countries have not only consolidated their bilateral ties but also opened up new areas of cooperation, thereby further widening and deepening the arena of cooperation. Both the countries have worked together not only on bilateral issues but also at the regional and international levels. Although the pace of Indo-Indonesian economic

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engagement increased with the Look East Policy, the economic crisis in South East Asia and India’s economic growth gave a major boost to their bilateral economic relationship (Shekhar, 2007: n.2). India’s Look East Policy in 1991 and the return of democracy to Indonesia in 1998, provided a greater synergy. It was mostly under former Indonesian President, Yudhoyono that the IndiaIndonesia relations transformed to a large extent. With the fall of Suharto in 1998, Indonesia reeled under crises in domestic politics till 2004. Former presidents like B. J. Habibie, A. Wahid could not complete their full five-year term and were mostly concerned with domestic issues, especially separatist movements in Aceh, Papua, East Timor. There were attempts to detangle the military from the Indonesian politics (Reformasi period). There was little scope and time to dedicate to matters of foreign policy. During the visit of President S. B. Yudhoyono to India in 2005, the two countries signed a Joint Declaration on Establishing a Strategic Partnership. In January 2011, President Yudhoyono visited India as the Chief Guest on the occasion of India’s Republic Day. During the visit, 16 Intergovernmental Agreements were signed which included an Extradition Treaty, Mutual Legal Assistance Treaty, an MoU on establishing a Biennial Trade Ministers’ Forum, an MoU on Cooperation in Oil and Gas, an MoU on Science and Technology Cooperation, and a Cultural Exchange Programme. In addition, during the visit, it was agreed to set up an Eminent Persons Group and to organize regular meetings of defence, home, oil and gas, coal, power, renewable energy, science and technology, tourism, health and education ministers. India and Indonesia agreed to launch negotiations for a Bilateral Comprehensive Economic Cooperation Agreement. The two sides also agreed to organize a Trade and Investment Forum, an Energy Forum and a CEO’s Forum alternately in either country (MEA, 2016). Former Indian Prime Minister, Dr. Manmohan Singh visited Indonesia in October 2013. During the visit, MoUs on issues such as combating illicit trafficking in narcotic drugs; cooperation in disaster management; and cooperation in combating corruption were signed. Both leaders agreed to adopt a five-pronged initiative for strengthening the Strategic Partnership in the areas of Strategic Engagement, Defence and Security Cooperation, Comprehensive Economic Partnership, Cultural and People-to-People Links and Cooperation in Responding to Common Challenges (MEA, 2016).

India-Indonesia Relations Get Further Boost: Why? Though under President Yudhoyono, major agreements were signed and the relationship was elevated to Strategic partnership in 2005, yet no substantial progress had taken place in the India-Indonesia relations. With India embarking on its Act East Policy and with the current Indonesian president Joko Widodo coming to power in 2014, it can finally be said that the process of substantial achievements and noteworthy initiatives has begun. The question that arises is why now?

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India and Indonesia are both leading powers in the Indian Ocean Region. Both the countries are maritime neighbours and some have even named them as “maritime democracies”. The bilateral relationship has warmed up considerably, especially in the maritime domain where India and Indonesia are confronted with similar issues like piracy, illegal fishing and maritime disasters. India talks about the Indo-Pacific and Security and Growth for All in the Region (SAGAR) and Indonesia talks about the Global Maritime Fulcrum (GMF). There is a fundamental change in the way the two are looking at the world around them, giving greater importance to the maritime dimension (Izzuddin & Wagle, 2019). In 2014, immediately after being elected for his first tenure, Indonesia’s president Joko Widodo (Jokowi) officially laid out his very ambitious vision of making Indonesia the Global Maritime Fulcrum (GMF). He outlined his vision at the 9th East Asia Summit in November 2014, with the aim of promoting Indonesia as a key player of the Indian Ocean Region (IOR). The GMF doctrine is an all-encompassing concept for the political and economic development of Indonesia. Recognizing Indonesia’s status as the world’s largest archipelagic state and its location at the crossroads of the Indian Ocean and the Pacific Ocean, President Jokowi had emphasized the importance of making Indonesia’s strategic maritime position the cornerstone of his foreign policy. He envisioned Jakarta’s pivotal role in shaping the security in “the Pacific and Indian Ocean (maritime) region (PACINDO)”, popularly known as the “Indo-Pacific” region. Both India and Indonesia have been strong advocates of a peaceful and rulesbased Indo-Pacific. Geographically both the countries have huge stakes in the IndoPacific region. Indonesia is located at the crossroads of the Indian and the Pacific Oceans and India is a leading resident power in the IOR. Former Indonesian Foreign Minister, Marty Natalegawa had spoken of an Indo-Pacific Treaty of Friendship and Cooperation in 2013 and even the current administration stresses on the IndoPacific. It is pertinent to mention here a few points raised by Marty Natalegawa when he presented his views on the “Indonesian perspective of the Indo-Pacific” at CSIS Washington in May 2013. While mentioning about his “Pacific” Indo-Pacific vision, Natalegawa had stated that what is being imagined is “a triangular (space) spanning two oceans, the Pacific and Indian Oceans, bounded by Japan in the north, Australia in the South East and India in the south-west, notably with Indonesia at its centre” (Natalegawa, 2013). He further pointed out, “for Indonesia, given its geography, the future course of the Indo-Pacific is in our profound interest” (Natalegawa, 2013). The vision for Indonesia to emerge as a GMF seeks to build the country’s maritime defence capabilities to enable it to play an active role in the Indian and Pacific Oceans. In the Vision Mission statement (Visi-Misi), President Widodo emphatically projected Indonesia as an “Indo-Pacific power”. He sees the closely interconnected Pacific and Indian Oceans (PACINDO) as the primary theatre of Indonesia’s foreign policy engagement. The Indonesian diplomacy has for long been only ASEAN-centric; but now the focus was to be also on the protection of sea lanes, and the evolving dynamics of the Indo-Pacific region. This signals Indonesia’s resolve to not just look north towards the rise of China and its increasing assertiveness in the South China Sea, but also to focus on the west towards the Indian Ocean and the Indian subcontinent (Widodo & Kalla, 2014). In fact, Indonesia was the main proponent and the reason

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why ASEAN released an Outlook for the Indo-Pacific. Both India and Indonesia realize that strong cooperation with each other is very much needed if either has to remain prominent and draw strategic benefits in the emerging dynamics of the IndoPacific. Indian Prime Minister Modi in his keynote speech at the Shangri-La Dialogue in 2018 commented, “The ten countries of South East Asia connect the two great oceans in both the geographical and civilizational sense. Inclusiveness, openness and ASEAN centrality and unity, therefore, lie at the heart of the new Indo-Pacific” (MEA, 2018a, June 1). India was quick to endorse the ASEAN Outlook on the Indo-Pacific and when Prime Minister Modi himself launched the Indo-Pacific Oceans’ Initiative at the East Asia Summit in 2019, countries like Indonesia, Singapore, Vietnam also expressed a lot of enthusiasm and became India’s partners in this initiative. China’s growing forays in the Indian Ocean is a matter of concern for India; similarly for Indonesia China’s growing assertiveness in the South China Sea, especially the Natuna Sea, is a matter of great concern. Though Indonesia is greatly dependent on China economically and does not want to jeopardize this connection, Indonesia is at the same time looking to diversify its partnerships to balance a rising China. In this context, India offers great potential as India too is trying to develop partnerships with like-minded countries in the Indo-Pacific to balance a growing Chinese threat especially after the Galwan Valley clash in 2020. Another factor which has given a push to the ties is that South East Asia is now caught in the throes of the US-China great power competition. Indonesia has always believed in a free and active foreign policy and is not inclined to choose sides. It is neither looking to lean too much on China for economic benefits, nor lean much on the US for security considerations. Indonesia, like India, wishes to diversify its economic and security partnerships. Therefore, India seems like a reliable partner in this regard too. The current Indonesian president has been more focused on economic benefits, rather than strategic gains. Many Indonesian analysts have said that President Jokowi is not much interested in leaving behind a foreign policy legacy. Rather, he is keen on greater economic investments and trade as a reason to strengthen ties with other countries. In this case also, India is important. Indonesia is a key economic partner for India in South East Asia. With bilateral trade of almost US$20 billion in 2019–20, Indonesia is the second largest trading destination for India in the ASEAN region. The trade between the two countries has witnessed more than fivefold increase since 2005–06 (US$4.3 billion) (Consulate General of India, 2020). India’s commodity export to Indonesia got a fillip from 2016–17 onwards mainly due to the export of bovine meat which was facilitated by a Presidential Decree issued in March 2016. In an audit by a team from Ministry of Agriculture, Indonesia, in India in 19 March 2018 new bovine meat plants and three dairy plants were approved for exporting to Indonesia. This figure is expected to increase in the coming financial year. India is one of the largest buyers of coal and crude palm oil from Indonesia and imports minerals, rubber, pulp & paper and hydrocarbons reserves. India exports refined petroleum products, commercial vehicles, telecommunication equipment, bovine meat, animal feed, agriculture products, steel and plastics to Indonesia. There is considerable potential for expanding trade between the two countries in the areas of

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agroproducts, pharmaceuticals, automotive components, automobiles, engineering products, IT, biotechnology and healthcare services (Consulate General of India, 2020).

Recent Trends/Developments in India-Indonesia Relations This section will focus on the developments that have taken place from 2014 onwards with the advent of the Act East Policy. Prime Minister Shri Narendra Modi met President Mr. Joko Widodo of Indonesia in Nay Pyi Taw on 13 November 2014 on the sidelines of 25th ASEAN Summit. Both countries agreed to increase trade and investment and increase exchange between business and political leadership (MEA, 2016: n.6). Prime Minister Modi visited Indonesia in May 2018 and adopted the “Shared Vision on Maritime Cooperation in the Indo-Pacific between India and Indonesia”. He stressed on his strong belief that the two countries could develop further cooperation in maritime sector which can be a force of immense stability in the region. Both leaders agreed to strengthen cooperation in all areas by establishing a New Comprehensive Strategic Partnership to take Indonesia and India’s bilateral relationship into a new era (MEA, 2018b, May 30). The 2018 visit saw developments in many sectors ranging from defence and security, maritime, and economic. In the defence sector, both leaders signed the Defence Cooperation Agreement (DCA) to further strengthen and renew the existing cooperation for the mutual benefit of the two countries and the region. From 2018, Indian and Indonesian navies have been engaged in bilateral naval exercise called Samudra Shakti. The sixth “Garuda Shakti” exercise between Indian and Indonesian special forces were held in 2018. Though certain collaboration is underway currently in the defence sector, there is scope for much more. There is a MOU in place between PT Pindad and Bhukanvala and an ongoing collaboration between PT Pindad and Tata Motors to source defence related equipment (MEA, 2018b, May 30). The Indonesian defence minister, Prabowo Subianto visited Delhi in 2020 to discuss the issue of possible export of BrahMos cruise missile to Indonesia by India and ways to further deepen maritime security cooperation and the prospect of cooperation in the field of defence industries and defence technology (The Print, 2020). However, there is a greater need to expand collaboration between defence industries for joint production of equipment, technology transfer, technical assistance and capacity building as well as sourcing of defence equipment. In the area of maritime cooperation, as maritime neighbours, the two countries underlined the importance of stronger connectivity, particularly on sea links, in order to facilitate economic cooperation and people-to-people contact. The leaders welcomed the plan to build connectivity between Andaman Nicobar-Aceh to utilize the economic potentials of both areas. Furthermore, the two sides looked forward to the expeditious conclusion of the ASEAN-India Maritime Transport Cooperation Agreement. Sharing the view that maintaining peace, stability and prosperity in the Indian Ocean is a regional priority, the two leaders reiterated their commitment to

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continue the partnership in the Indian Ocean Rim Association (IORA). They highlighted the importance of reaching the goals set in the Jakarta Concord and the IORA Action Plan 2017–2021 endorsed during the IORA Leaders’ Summit 2017 in Jakarta and urged all member states of IORA to cooperate closely on the six priority and the two cross-cutting issues of Blue Economy and Women’s Economic Empowerment (MEA, 2018b, May 30).India and Indonesia have been engaged in coordinated patrol (CORPAT) since 2002. According to an Indian defence ministry statement at that time, the CORPATs have been held “with the aim of ensuring safety and security of shipping and international trade in the region. CORPATs build up understanding and interoperability between navies and facilitate institution of measures to prevent and suppress Illegal Unreported Unregulated (IUU) fishing, drug trafficking, maritime terrorism, armed robbery and piracy” (Rej, 2021). The two countries also hosted the first India-Indonesia Infrastructure Summit in 2018. Indonesia has offered the facilities at the undeveloped Sabang port in Aceh for connectivity to Nicobar. This requires proof of sustainability, but efforts are underway. Another positive sign is that an Indian company has finally won a contract for developing Medan Airport in North Sumatra (Singh, 2022). These developments indeed reflect that the process of turning their complementary interests into practical deeds has been initiated.

The Way Ahead Strategic partnership holds great importance for both India and Indonesia. As two large democracies, pluralistic societies, and major economies, they have many convergent interests. As maritime neighbours in the Indo-Pacific bordering the critical sea lanes of communication, both have a stake in the maintenance of a free, open, rules-based order in the Indo-Pacific. Given this potential, the two nations need to make sustained effort to further elevate their ties. This would be in the mutual interest of both the nations given how the geopolitical climate in the Indo-Pacific is transforming. The groundwork has been laid given that India and Indonesia have entered into a Comprehensive Strategic Partnership in 2018. But a lot more needs to be done especially in the defence and maritime sector. • Indonesia from the beginning has been concerned about maritime sovereignty and maritime borders. India and Indonesia signed a continental shelf boundary agreement establishing a boundary between the Great Nicobar Island and Sumatra in August 1974, extending it in 1977 to further cover the Andaman Sea. In the past, Indonesia had asked for a new agreement to delineate EEZs. It has been suggested by former Indonesian Ambassador to India, Suryodipuro that maritime boundary delineation was something both countries needed to focus on in order to further cooperation. “Concluding the EEZ boundary negotiation with India will further enhance bilateral relations between Indonesia and India, as well as strengthen the role of UNCLOS [United Nations Convention for the Law of the

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Sea] as the ‘Constitution of the Sea’ respected by all in the Indo-Pacific” (Rej, 2021). There needs to be a MoU and greater engagement between the coastguards of both the countries. There can be coastguard exercises as well. Indonesia’s BAKAMLA is a very new institution, and Indian coastguards can provide training to their Indonesian counterparts. The two countries can work together on areas of blue economy, and preservation of marine resources. The prevention of dumping of marine plastic debris in the Indian Ocean is an area which is of critical interest to Indonesia and hence is a potential area where India and Indonesia can take a lead under India’s Indo-Pacific Oceans’ Initiative and also in the platform of the IORA. India, alongside the Quad countries under the US’ Blue Dot project, can invest in Indonesia’s port development programme under the Global Maritime Fulcrum. Indonesia and India discussed joint production and defence supplies, but these have not succeeded. They do not have similar acquisition processes, nor ways of doing things. This requires patience and mutual understanding. In Jokowi’s second term the heft is increasing, with India agreeing to provide BrahMos batteries to Indonesia. The visit of Defence Minister Gen Prabowo to India during the pandemic has set this initiative in motion (Singh, 2022: n. 20). Indonesia can appoint a liaison officer at India’s IFC-IOR in Gurugram like Australia and France for cooperation in maritime domain awareness. There is a need for India and Indonesia to enter into an agreement on white shipping.

Given the regional uncertainty in the Indo-Pacific, as well as the limitations of existing multilateral institutions, stronger cooperation and alignment between the two nations can boost regional stability and provide strategic benefits for all. Therefore, these countries, and the way they interact with one another, are key to the long-term strategic stability of the Indo-Pacific region.

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of India. https://www.mea.gov.in/Speeches-Statements.htm?dtl/29943/Prime+Ministers+Key note+Address+at+Shangri+La+Dialogue+June+01+2018 Ministry of External Affairs (MEA). (2018b, May 30). India-Indonesia Joint Statement during visit of Prime Minister to Indonesia (May 30, 2018b). Ministry of External Affairs, Government of India. https://www.mea.gov.in/bilateral-documents.htm?dtl/29932/IndiaIndo nesia+Joint+Statement+during+visit+of+Prime+Minister+to+Indonesia+May+30+2018 Natalegawa, M. (2013). An Indonesian Perspective on the Indo-Pacific. Keynote Address delivered on 16 May 2013 at Centre for Strategic and International Studies. https://csis-prod.s3.amazon aws.com/s3fs-public/legacy_files/files/attachments/130516_MartyNatalegawa_Speech.pdf_ Accessed February 20, 2015. Rej, A. (2021, January 13). India and Indonesia push ahead with defense relationship. The Diplomat. https://thediplomat.com/2021/01/india-and-indonesia-push-ahead-with-defense-relationship/ Shekhar, V. (2007, March). India-Indonesia relations: An overview. IPCS Special Report, No. 38. https://www.jstor.org/stable/resrep09298?searchText=india-indonesia+relations&sea rchUri=%2Faction%2FdoBasicSearch%3FQuery%3Dindia-indonesia%2Brelations%26so% 3Drel&ab_segments=0%2Fbasic_search_gsv2%2Fcontrol&refreqid=fastly-default Singh, G. (2022, January 18). India and Indonesia: How to turn a strong political relationship into a thriving economic partnership. First Post. https://www.firstpost.com/india/india-and-ind onesia-how-to-turn-a-strong-political-relationship-into-a-thriving-economic-partnership-102 95561.html The Print (2020, July 27). India & Indonesia agree to expand defence ties and technology sharing. https://theprint.in/diplomacy/india-indonesia-agree-to-expand-defence-tiesand-technology-sharing/469233/ Widodo, J., & Kalla, J. (2014). Jokowi-Jusuf Kalla vision-mission and action program. www.kpu. go.id/koleksigambar/Visi_Misi_JOKOWI-JK.pdf. Accessed November 20, 2015.

Chapter 13

India’s Act East Policy: China’s Perceptions and Responses B. R. Deepak

Abstract The aim of this study is to analyse China’s perceptions and responses to India’s Act East Policy. It has been argued that India’s Act East Policy has been considered by the Chinese to come in three phases. The first two phases closely parallel a period when both countries established equilibrium and understanding, with India striving to strike a balance between the US and China. The third phase corresponds to the predominance of Prime Minister Modi in the Indian political scene. This was the time when the equilibrium was lost owing to the power shift favouring China and China’s malicious relations with India following frequent standoffs resulting in the Doklam and Galwan conflicts. India has been realigning its Act East Policy; subregional and multilateral mechanisms like the BIMSTEC, SAGAR, IORA, Quad, etc., have been declared to be an essential element of India’s Act East Policy, serving the tacit goals of India’s Indo-Pacific Strategy. India’s Indo-Pacific Strategy has been viewed by China to be basically a containment of the Chinese by the US and its allies; as a response, India’s broader geopolitical aspirations have to a certain extent been held in check by its rivalry with China and Pakistan. For this reason, Chinese scholars are of the opinion that India’s strategic vision is regulated by its assessment of South Asia and the Indian Ocean; nonetheless, they are concerned that the Indo-Pacific Strategy does give it leverage to intervene in the South China Sea, diminish ASEAN’s centrality and oppose China’s connectivity projects. Keywords India’s Look/Act East Policy · ASEAN · Indo-Pacific · QUAD · US factor

India’s connection with South East Asia goes back to ancient times. If Buddhism left its indelible imprint on the Chinese civilization, the imprints of Indic civilization are more indelible in South East Asia. Foreign aggressions and especially the eastward expansion of colonialism put a halt to these ties. There was an attempt B. R. Deepak (B) Centre for Chinese and South East Asian Studies, Jawaharlal Nehru University, New Delhi, India e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 L. Ghosh and A. B. R. Chaudhury (eds.), India’s Relations with Neighboring South and South East Asian Countries, Dynamics of Asian Development, https://doi.org/10.1007/978-981-99-4610-5_13

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to resurrect these just before the independence of India in March 1947 during the Asian Relations Conference in New Delhi and later at Bandung during the AfroAsian Conference, as India sought to establish a new post-colonial order under the umbrella of non-alignment in the region. However, India’s conflicts with China and Pakistan in subsequent years forced her to look inward and look for allies in the face of external threats. India’s close proximity with the Soviet Union and the formation of ASEAN consisting of anti-communist regimes made India drift further away from the region. India-Soviet Union and Vietnam’s attempts to counter Chinese influence in the region also made the anti-communist ASEAN apprehensive of India’s moves, especially in terms of naval build-up. After the disintegration of the Soviet Union, the winding up of the US bases in the Philippines and China’s increased assertiveness in the South China Sea, India was provided with a window of opportunity to engage with the region. A new policy initiative in the form of “Look East” was initiated, which to date has witnessed three major phases according to Chinese scholars. The first two phases were largely confined to the “equilibrium” which India and China had established in the first two and a half decades since Rajiv Gandhi’s China visit in 1988, whereas the last phase saw a fundamental change in India’s Act East Policy (AEP) owing to the lost equilibrium and widening asymmetries with China (Bali, 2021: 1–19).

China’s Perceptions on Look/Act East Policy Chinese scholarship has widely quoted Nehru’s Discovery of India while commenting on India’s foreign policy approaches and choices. They posit that Nehru’s vision was to make India a “world-class power”. India’s engagement in world affairs since its inception has been looked through this prism and has been deemed as India “seeking great power status” (寻求大国地位) by extending its influence beyond the Indian Ocean (Zhao, 2015; Zeng, 2017). They see India’s “eastward advance” in three stages—strategic layout, strategic expansion and strategic partnership with the US, Japan and Australia.

Strategic Layout (1991–2002) China’s think tanks maintain that during this period the main objective was to expand economic ties with South East Asia. The period saw India successfully reviving its cultural, economic and defence ties with South East Asian nations. India’s economic crisis, the pressure of globalization and China’s gradual economic integration with South East Asia have been cited as reasons for India’s eastward commitments. According to Zhao (2006: 143), the purpose of rebuilding its economic relations with South East Asia was “to diversify trade away from its main trading partners in North America and Europe, thereby reducing its economic vulnerability”. In the1990s India

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felt this pressure when the economies of South East Asian countries had started to take off and were gradually being integrated with China’s market. Some of the successes have been enumerated as India has become a sectoral partner of the ASEAN in 1992 and full dialogue partner in 1995; India joined the ASEAN Regional Forum in 1996; India, Bangladesh, Sri Lanka and two South East Asian countries—Thailand and Myanmar—jointly established an economic cooperation organization, aimed at creating a free trade zone in June 1997 (the organization was formally changed to BIMSTEC, and after the entry of Nepal and Bhutan to the grouping, the name was further changed to the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation in 1998); India initiated the “Mekong-Ganges River Cooperation Project” with five ASEAN (Vietnam, Laos, Cambodia, Myanmar and Thailand) countries aimed at promoting cooperation in tourism, culture and education in this subregion in 2000); and bilateral trade between India and ASEAN growing from US$3 billion in 1993 to around US$10 billion in 2000. As regards security ties, India’s joint naval exercises with Indonesia, Malaysia and Singapore near the Andaman Islands, MILAN, the annual naval exercises of the Bay of Bengal navies in 1995 have been cited. The Look East Policy during this phase, also faced a number of hurdles hindering its progress (Zhao, 2006: 148). Zhao posits that internal “political instability” subjected foreign economic policy to a lower priority; externally, India’s nuclear tests in May 1998 subjected the country to economic sanctions by the US and its allies. ASEAN followed suit and the initial momentum was lost.

Strategic Expansion (2003–2013) The second phase of India’s Look East Policy saw greater efforts aimed at forging links with the CLMV states (Cambodia, Laos, Myanmar and Vietnam) and gaining support for the India-ASEAN Summit-level meeting with the goal of expanding to the Asia–Pacific. According to Ning (2021), during this phase, India continuously strengthened maritime security cooperation and carried out joint military exercises with countries such as Vietnam, Indonesia and Singapore, increased arms exports to these countries and promoted cooperation through defence dialogues, mutual naval visits, combat training and capacity building. As strategic partnerships with ASEAN countries were established one after another, India was successful in establishing dialogue mechanisms like ASEAN + 1 in 2002 and ASEAN + 44 in 2004. It joined the “Treaty of Amity and Cooperation in South East Asia” in 2003 and participated in the East Asia Summit as a founding member. Through these moves, which also include India-ASEAN FTA in 2009, India has been able to secure a place in the ASEAN-led Asia–Pacific multilateral framework, argues Ning (2021).

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Strategic Partnership with Japan, Australia and the US (2013-Date) Wang (2018: 98) has pronounced Indo-Pacific as a “strategic arch” with Japan, the US and Australia as “three poles” that have been reaching out to the Modi government, ever since it came to power in 2014. According to Wang, India too has been vigorously constructing new multilateral mechanisms in its backyard, the Indian Ocean. He has referred to mechanisms such as “Security and Growth for All in the Region” (SAGAR), the Bay of Bengal Multi-Sector Economic and Technological Cooperation Initiative (BIMSTEC) and the Indian Ocean Rim Alliance (IORA) with an aim to promote regional cultural, economic and security cooperation, and India inviting BIMSTEC leaders to other multilateral mechanisms such as the Goa BRICS Summit hosted in 2016. Quoting Modi’s address to BIMSTEC leaders in June 2017, Wang argues that these mechanisms are essentially part and parcel of India’s “Neighbourhood First” and “Act East Policy”. Wang maintains that India has been “setting the agenda” of these grouping aimed at shaping its leadership and expanding its influence in the Indian Ocean Region. In tandem with Japan, India has initiated the “Asia-Africa Growth Corridor”. This has been viewed as “an industrial corridor” for promoting connectivity, economic and social ties in Asian and African countries around the Indian Ocean. Besides, the scholar asserts that by way of these mechanisms, India is attempting to create a “unified Indian Ocean identity” and promote the concept of an “Indian Ocean Region Community” as advocated by India. After initial hesitation in using the term “Indo-Pacific” in its official discourse, Chinese scholarship has begun to use the construct in their writings and argues that India has intensified its campaign to integrate the above multilateral mechanisms with that of the Indo-Pacific Strategy. This, according to them, marks the third phase of India’s Act East Policy. For example, in 2019, ASEAN issued the “ASEAN ‘IndoPacific’ Outlook”, which promotes coordination and cooperation between “regional mechanisms such as the East Asia Summit, IORA and BIMSTEC and calls for establishing an inclusive ‘Indo-Pacific’ regional architecture”.

Strategic Goals and Limitations of India’s Act East Policy At the outset, China believes that the intent behind India’s engagement in the IndoPacific is owing to economic and strategic reasons. Unique geoeconomic conditions “will inject vitality into the rapid development of the Indian economy” (Deepak, 2022). India’s close economic ties with the East and South Asia shall be conducive for building the “Indo-Pacific Economic Corridor” as envisaged by the Quad countries. This would also realize “the convergence of India’s interests with those of the US and its allies (Shi, 2019: 25). Moreover, as relatively close neighbours of India, the ASEAN countries share much in common with India in terms of regional interests and traditional cultures (Zhao, 2006: 154).

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However, China holds the view that India’s economic significance to ASEAN is yet to be realized. For example, trade between China and ASEAN exceeded US$878.2 in 2021, but India’s trade with ASEAN was US$74.41 billion in 2013–2014 (reached US$78 billion in 2021). The target of “200 billion US dollars by 2022” according to Ning (2021) remains afar. Ning believes that, unlike China-ASEAN trade, India and ASEAN “seriously lack endogenous motivation for economic and trade cooperation” (Ning, 2021) notwithstanding the free trade agreement. Internal and external drivers in terms of opening up, business environment, and labour force have been compared. Concepts such as “self-reliance” and “Swadeshi” have been pronounced as manifestations of “Economic nationalism” and anti-free trade (Li, 2021a, 2021b: 149). Quoting WTO figures, Ning (2021) says that ever since the ascendance of Modi to power, “India’s actual tariff level has risen from 13.5 to 17.6% in 2019”. This has also been cited as one of the reasons for not signing ASEAN-led RCEP, for India fears that the agreement will lead to “opening the gates” of its domestic market and accelerated influx of foreign goods, which in turn, will harm the interests of domestic producers, small traders and farmers and will be detrimental to India’s independent manufacturing capabilities. In addition, competition with some ASEAN countries in the fields of food grain, textiles, footwear and furniture has also been cited. Another goal, that Chinese scholars (Shi, 2019; Zeng, 2017) have argued is the dream of the Indian leadership right from Nehru to Modi to make India a “great power”. India’s engagement in world affairs has been looked through this prism and has been deemed as India “seeking great power status” (寻求大国地位) by extending its influence beyond the Indian Ocean. They see it as India’s “eastward advance”, forging close economic and defence partnerships with the US and its allies in this context (Deepak, 2022). The signing of various foundational agreements and nuclear deals with the US, Japan and other countries has been cited to fulfil that desire. However, China holds the view that “India is still relatively weak in terms of economic and political power” (Deepak, 2022). Some scholars like Ma (2019) also believe that India joining the Quad was the outcome of its malevolent relations with China before and during the Doklam confrontation. However, they argue that India’s broader geopolitical ambitions have to an extent been held in check by its rivalry with Pakistan and China (Zhao, 2006: 161; Shi, 2019: 32). Yet another goal identified by China is that by way of India’s Act East Policy and participation in Indo-Pacific Strategy, India desires to establish a “multipolar regional order” (极化地区秩序), which is antithetical to a unipolar or bipolar world. Therefore, “reshaping the international order is one of the major goals of India’s foreign policy” according to Shi (2019: 27). India’s bilateral and multilateral engagements in its neighbourhood, with major powers including the US, Russia and China are seen in this light. China sees this as an opportunity to engage India in mechanisms such as the BRICS, SCO and AIIB. However, recently, China has been advocating the concept of “True multilateralism” which has been interpreted by various official commentaries as one, which is mutually inclusive and beneficial, devoid of any trade, investment and technology barriers. It is projected as one that promotes common development and decries protectionism and narrow nationalism and is essentially an antidote to selective, unilateral, small circle or pseudo-multilateralism (Xinhua,

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2021; Wang, 2021). Regionally, too, India and some ASEAN countries along with China do not wish to see a “non-regional hegemon” dominating Asia. This is what has been perceived by China as “India playing a more important and constructive role in East Asia, partly balancing the overwhelming influence and unilateralism of the United States and greatly contribute to a multipolar Asia–Pacific in which China is one of the major powers”.

China’s India Dilemma in Indo-Pacific and Responses China is concerned that “an emerging India” may become a “strong competitor of China” in the Indo-Pacific, and this may become a hindrance to the development of Sino-ASEAN relations in the near future. Therefore, it has also raised questions as to “what interests India has to defend in the region”. From this perspective, while the presence of Indic culture in South East Asia has been accepted by Chinese scholarship, they, however, are quick to suggest that the region has been under the influence of the Sinosphere. In fact, many of today’s ASEAN countries were part of the tributary system of China; therefore, Chinese culture did have an important impact on South East Asia. Moreover, since the region doesn’t perceive India closer to Asia, culture may not be a favourable element for its integration into the Asian community (Zhao, 2015: 224). Thus, China looks upon India more as an Indian Ocean power rather than an Asia–Pacific power, and hence an “external power” ( 外部势力) in East Asia. It is owing to this thinking that China, in tandem with Malaysia, prefers to use the “10 + 3” (ASEAN + China + Japan and the ROK) as a vehicle to the shape region into a desired economic community. They seem to be favouring regional cooperation in East Asia to the exclusion of the US, India and other powers (Li, 2018a, 2018b: 54; Zhao, 2006: 143; Zhao, 2016: 58). Nonetheless, China knows it would be difficult to stop India’s entry into the Asian community. Therefore, it advocates an incremental approach for India, suggesting India catch up economically with the region first. As regards land, water and air connectivity projects between India and South East Asia, India has been considered as an “active player” by China. However, projects such as India-Myanmar-Thailand Trilateral Highway that was announced in 2002 and further extended to Cambodia and Vietnam in 2012, Bangladesh, Bhutan, India and Nepal (BBIN) project, “Project Mausam” SAGAR, BIMSTEC, Kaladan MultiModal Transit Transport Project, according to Chinese scholars, are progressing rather slowly owing to “India’s limited financial capacity” and “complex multinational construction procedures”. They are quick to refer to India’s negative growth during COVID-19 in 2020 and high government debt. The proportion of public debt to GDP in the 2020–2021 fiscal year has been cited as close to 90%. India’s economic woes, unemployment, lockdowns are held responsible for not being able to support overseas projects; therefore, most of the connectivity projects, according to Ning (2021), are likely to remain in a “semi-finished” state.

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It is believed generally in China that India’s Act East Policy is now not limited to the ASEAN but has widened in its scope to include the whole of East Asia to start with and now the entire Indo-Pacific. In Chinese scholar’s view, the widening security boundary of India’s Act East Policy provides an opportunity for India to intervene in Asia–Pacific affairs; act as a “balancer” (平衡者); engage in “strategic balancing” (战 略制衡) of China by way of the India-Japan-US-Australia strategic arc and weaken China’s influence in the Asia–Pacific (Li, 2018a, 2018b: 57). India’s AEP is “acting in concert with” with the Unites States’ “rebalancing to Asia strategy”. This will increase opposition to the construction of the “Belt and Road” initiative (Wang, 2018; Zeng, 2017; Li, 2018a, 2018b: 58). China has condemned the Indo-Pacific Strategy as a containment theory, which aims to reduce China’s geopolitical and economic influence. Even though China has all along stressed that India is very low in the Chinese foreign policy calculus, India’s policy of “multialignment”, especially in the Indo-Pacific has disproved that thinking. Chinese scholars (Ning, 2021) have recognized the fact that the US no longer treats India from a “US regional policy framework of South Asia” but from a “global perspective”, dubbing it as a “natural strategic partner”, the “net security provider in the Indian Ocean”, the “cornerstone of democracy”, the “strategic offshore counterweight”, etc., and have clearly supported India as a permanent member of the UN Security Council (Deepak, 2022). It is perhaps owing to this cognition that the Chinese scholarship talks about “cognitive asymmetry” (认知不对称) between China and India, generally held responsible for not pushing India-China relations in a “positive direction” (Zeng, 2017). Zeng asserts that “the presence of a powerful country like China in its periphery will hinder the realization of its great power status”; therefore, India has adopted a strategy of distrust and balancing towards China. Firstly, it would seem fair to say that both India and ASEAN have their own intentions and different goals in engaging with each other. India’s engagement with ASEAN has been regarded as one aspect of its overall strategy of acquiring the status of a “major power” because the Indian leaders believe that ASEAN could serve as a springboard for India to enter into APEC and the Annual Asia-Europe Meeting. This would be helpful for India in deepening and expanding its economic ties, thus furthering India’s aspirations for greater geopolitical power. In contrast, ASEAN’s objective in developing relations with India is mainly in order to balance its relations with the major powers. In China’s view, India’s AEP is in “concert with” US’s “rebalancing to Asia” or Indo-Pacific Strategy, which has resulted in a situation where the US and India are unitedly checking balancing (联合制衡) China. This in Zeng’s view (2017) “will further deteriorate China’s surrounding environment, will restrict China’s role in the Asia–Pacific region and will be detrimental to smooth development of China’s peripheral diplomacy”. Scholars such as Bao (2022) argue that the US is trying to rope in ASEAN to its “Indo-Pacific Strategy”, it is no wonder the region has become so important to the US. This could be established through frequent visits of the US high officials to the region and also from the document it released on Indo-Pacific Strategy in February 2022, which mentions South East Asia 12 times, and ASEAN 19 times. This along with its “small circles” (小圈子), like AUKUS, the Quad, Five Eyes Alliance and G7, are “attempting to reconstruct the network of alliances and

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partners of the United States in the Asia–Pacific region”. However, they also believe that owing to the US policy of “saying one thing and doing another” (表里不一), it is unlikely that the ASEAN is pulled over to the US (Bao, 2022). India, some of the Chinese scholars believe, in recent years has been moving away from the principle of “ASEAN centrality” and stepping up its shift to the “Indo-Pacific Strategy” of the United States. Bao further argues that ASEAN countries are looking for “real money” (真金白银), not “empty promises” (空头许诺), perhaps indicating a dig at India too. Moreover, in China’s view, India’s AEP will allow India to further intervene (插手) in the South China Sea issue. This will have ramifications on some of China’s central interests. Chinese apprehension arises out of the fact that China has a very troubled relationship with ASEAN countries owing to the South China Sea issue. No wonder, the “ASEAN ‘Indo-Pacific’ Outlook” (2019) and “ASEAN-India Joint Statement on Cooperation on the ASEAN Outlook on the Indo-Pacific for Peace, Stability, and Prosperity in the Region” (2021) all emphasized on the 1982 UN Convention on the Law of the Sea (UNCLOS) and an open, inclusive and rules-based regional construct. China is concerned that through consolidation of political, economic and diplomatic relations with Asia–Pacific countries, India will easily “warm up” (抱团 取暖) to other countries on the South China Sea issue and put its weight behind them. China believes that this will further add unfavourable factors to the settlement of the South China Sea issue. India’s recent US$375 million anti-ship BrahMos missile deal with the Philippines (Indian Express, 2022) and India’s close defence cooperation with Vietnam could be cited by China as some of the examples. According to Zhao (2016: 58), India’s intervention in disputes in one way or another is to enhance its socalled presence (存在) in the region “out of strategic consideration” and its “global power ambitions”. India’s cooperation with Vietnam in terms of oil exploration in the disputed waters of the South China Sea can essentially be viewed in the same way, argues Zhao. China had reacted strongly when the US, in May 2018, renamed its Pacific Command (PACOM) as US Indo-Pacific Command (USIPC). An editorial published by the Chinese edition of the Global Times said that the “two long-term goals of the United States’ Indo-Pacific Strategy are mutual strategic depletion of China and India”. It compared the strategy to “a big pit” that will bury both the rise of China and India. Other Chinese scholars like Yang and Wang (2018) suggest that India will continue to readjust its policies to best serve the Indo-Pacific Strategy so as to realize the “dream of becoming a great power”. Meanwhile, it aims to counter China’s “Belt and Road Initiative” and “balance China’s rise” by joining the US and other countries. However, there are others like Ma (2019), who believe that countries like India and South Korea will try to “maintain a relatively balanced and detached position between China and the United States to safeguard their core and long-term interest”. According to Li (2018a, 2018b) and Deepak (2018), the main purpose of the Indo-Pacific Strategy by the US is to establish an Indo-Pacific geopolitical order that targets China on the one hand and formulate a trade rule, centred on itself on the other. Li maintains that “whether it is Obama administration’s ‘Pivot to Asia’ or Trump administration’s ‘Indo-Pacific Strategy’, the constant theme of the

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US Asia–Pacific Strategy is to weaken or marginalize China’s regional influence”. Unlike the past, the “Indo-Pacific Strategy”, according to Li, relocates the concept of a security alliance into the practice of building an economic alliance, which will halt economic integration in the region. Chinese scholars admit that gradually the security in command is shifting to the economy in command in the Indo-Pacific. They are, however, unconvinced that the US and its allies will commit to large investments in the region. Ma (2019) has ridiculed it as the “economic edition” of the Indo-Pacific accompanying its “military edition” in the region, the main motive of which remains to counter China’s “Belt and Road Initiative”. Ma has pronounced it as a “barking dogs seldom bite” phenomenon. According to him, since the Indo-Pacific region overlaps with China’s “21st Century Maritime Silk Road”, South East and South Asian countries are eagerly waiting to board the “Belt and Road” ship and improve their lot. As China has strong economic ties with the ASEAN irrespective of its disputes with various member states in the South China Sea, it will be difficult for the South East Asian and smaller South Asian countries to forgo their interests (Bali, 2018). It may be noted that the US has earmarked $1.5 billion for each fiscal year between 2019 and 2023 for promoting democracy, combating cyber-security threats, encouraging people-to-people exchanges, defending human rights and developing power strategies between the US and its allies in the Indo-Pacific. As far as India is concerned, they still question India’s relevance in Indo-Pacific Strategy. In the words of Zhang Feng, India undoubtedly is an Indian Ocean country. When did it become a “Pacific country” and “Indo-Pacific” country? According to him, India’s primary concerns lie in the Indian Ocean; therefore, its strategy is the “Indian Ocean Strategy” and not the “Indo-Pacific Strategy”; it is merely because of the convergence of its “Act East Policy” and South East Asia that it has recognized the Indo-Pacific Strategy. He argues that due to bottlenecks in India’s strategic capability, India’s investment in the South China Sea and Pacific region has been limited. He believes that India joining the Quad was the outcome of its hostile relations with China before and during the Doklam confrontation. As regards ASEAN, China argues that the ten-member grouping is “hesitant and cautious” about the “Indo-Pacific”. It was only in 2019 that ASEAN issued the “ASEAN “Indo-Pacific Outlook” document, which expounded ASEAN’s fundamental position on the “Indo-Pacific” and reiterated the ASEAN centrality. According to Ning (2021) since the outbreak of COVID-19, ASEAN has basically put the “Indo-Pacific” issue on hold. Chinese scholars argue that the “Indo-Pacific” strategy poses threat to ASEAN’s centrality; rather, it attaches importance to regional security and the political and economic interests of the US. Therefore, once the strategic competition among major powers intensifies and regionally sensitive issues become prominent, the space for ASEAN to play a role will be severely compromised. In the backdrop of such a situation, China has tried to convince countries and regions in the vicinity that only “True multilateralism” as advocated by the Chinese, is truly inclusive and denounces the unilateral, selective and small-circle multilateralism of the US.

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Conclusion A perusal of the writings of the Chinese scholarship demonstrate that their perception of India’s LEP and engagement in the Indo-Pacific has undergone a major change. From the Indian perspective, this shift could be ascribed to the shift in power equations brought about by the increasing pre-eminence of China and widening differences with India, its aggressive stance along the Line of Actual Control along the India-China border and the Indo-Pacific. As a result, the erstwhile equilibrium and understanding between India and China has been lost, and the ambiguity and the nature of India being a “swing state” between the US and China has been addressed (Ning, 2021: n. 2; Zeng, 2017: n. 4.). Presently, it is obvious from the assertions of the Chinese scholars that Whether it is India’s Act East Policy, subregional mechanisms or the Quad, Chinese scholars presently assert that all these are active tools of the IndoPacific Strategy of the US, which is aimed primarily towards containing China and reducing its influence in the Indo-Pacific. Nevertheless, China still holds the view that regardless of “grand strategic goals” in the “Indo-Pacific” region, India’s strategic vision is governed by its view on South Asia and the Indian Ocean, for the want of economic heft as well as its antagonistic relations with both China and Pakistan. This, of course, does not mean that India is not looking to play a strategic role in the IndoPacific region, it certainly is. However, in the opinion of Chinese scholars, India has not yet “publicly stated” its strategic goals in the Asia–Pacific region. Though they concede the fact that the South East Asian countries are positively inclined towards India’s engagement in the Asia–Pacific region, most of them have not expressed their support for India’s role as a “net security provider” in the Western Pacific. In short India’s priority would be its strategic considerations in the Indian Ocean, active engagement with the South East Asian countries and coordination with the US over the Indo-Pacific Strategy. India’s engagement in the Indo-Pacific, according to them, is intertwined with the kind of relationship India enjoys with the US and its allies, deterioration in relations owing to factors such as mutual distrust, India not wanting to play second fiddle, and a solid India-Russia defence relationship, which would diminish India’s active approach in the region. They also admit the fact that at present the “informal alliance” or the “strategic consensus” between India-US and its allies is purely due to the China factor (Li, 2021a, 2021b: 57). Li argues that if India desires China to “recognize its role in the Asia–Pacific region, then India must cede a certain role in the Indian Ocean Region to China”. Finally, will India become an Indo-Pacific power? Well, it will depend upon India’s economic, technological, military drivers along with soft power, diplomatic and leadership skills (Shi, 2019: 34).

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Chapter 14

Strengthening Maritime Connectivity Across the Bay of Bengal: India and Her Eastern and Southeastern Neighbours Anasua Basu Ray Chaudhury

Abstract The chapter focuses on strengthening maritime connectivity between India and her Southeastern Asian neighbours in the Bay of Bengal region against the backdrop of India’s port-led development and its implication on the strategy of growth for all. The chapter seeks to understand the present and potential port connectivity of India through two separate but interconnected themes: (a) understanding the connectivity, facilitating the infrastructure of the maritime ports in India around the Bay, the measures undertaken to improve connectivity with other ports of the Bay littorals and the obstacles hindering such endeavours and (b) understanding inter and intraregional riverine port connectivity through inland waterways and attempting an estimation of the possibility to revive India’s northeast as hinterland by linking it to the Bay of Bengal through rivers. Keywords Maritime connectivity · SLOCs · BBIN · BIMSTEC · SAGAR · BRI

Introduction Though the rise of Asia has been topical for quite some time, in recent decades it has gained greater pertinence. In this regard, the Bay of Bengal, spread across 2,173,000 km2 , is becoming more important in recent years as part of a strategic maritime space. As a consequence of this, multilateral approaches are emerging, including the so-called Pivot of Asia led by the US, China’s Belt and Road Initiative (BRI), as well as India’s Act East Policy and Vision of Security and Growth for All in the Region (SAGAR). Japan’s “Free and open Indo-Pacific” idea and Australia’s “Look West” Policy have also become part of this initiative. Seafaring has historically been a central means of communication across the Bay, leading to regular contact between the eastern seaboard of India and the land of Suvarnabhumi (continental South East A. Basu Ray Chaudhury (B) Observer Research Foundation, Kolkata, India e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 L. Ghosh and A. B. R. Chaudhury (eds.), India’s Relations with Neighboring South and South East Asian Countries, Dynamics of Asian Development, https://doi.org/10.1007/978-981-99-4610-5_14

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Asia) and Suvarnadvipa (maritime South East Asia). Port towns and cities formed vibrant hubs of exchange and commerce, as documented in the accounts of Al Idrisi, Ibn Batuta and Asavu, among others. One of the most important maritime trade routes between India and its South East Asian neighbours was the ancient “Maritime Silk Route” or the “Spice Route”. With the coming of the European powers, competition for colonies gained pre-eminence. Strongholds were established around the Bay not only by the British but also by the French and the Dutch. As the colonial masters became large exporters of agricultural goods, business also expanded. Thus, inter-Bay connectivity was further strengthened during the colonial era. Following the First World War, there was a surge of nationalism among the Bay littorals. With the newly independent countries prioritizing self-sufficiency, the Bay of Bengal gradually became a strategic backwater. While decolonization fragmented the region, hope for a new era of connectivity was rekindled with the establishment of the Association of South East Asian Nations (ASEAN) in 1967 and the South Asian Association for Regional Cooperation (SAARC) in 1985. Later, in 1997, with the creation of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), the beginning of the re-integration of the Bay region was initiated. In addition to the major sea lanes of communication (SLOCs), the busiest east–west shipping route which passes close to the Bay of Bengal has increased in importance. In recent years, the rise of China has led to the Bay, its extended waters in the Andaman Sea and the larger Indo-Pacific region to assume greater significance. In addition, Beijing’s crucial presence has influenced policy changes among major world powers like the US, Japan and Australia, leading them to reiterate freedom of navigation in the Indian Ocean Region (IOR) and compliance of all user states with international maritime law. China’s growth has made room for new bilateral, multilateral and regional initiatives in Asia (Basu Ray Chaudhury et al., 2019). For an in-depth understanding of the contemporary maritime networks across the Bay, it is necessary to study logistics, trade, humanitarian aid and relief in times of disaster and the strategic priorities that shape political alignments. Against this backdrop, the paper intends to focus on the strengthening maritime connectivity between India’s eastern neighbours and South East Asia (SEA) in the Bay of Bengal region keeping India’s port-led development and its implication on strategy of growth for all in consideration. It seeks to understand the present and potential port connectivity of India through three separate but interconnected themes: (a) understanding the connectivity, facilitating the infrastructure of the maritime ports in India around the Bay, the measures undertaken to improve connectivity with other ports of the Bay littorals and the obstacles hindering such endeavours; (b) understanding inter and intraregional riverine port connectivity through inland waterways and attempting an estimation of the possibility to revive India’s northeast as hinterland by linking it to the Bay of Bengal through rivers and (c) exploring how and to what extent the subregional organization like BIMSTEC can play its role as a catalyst in enhancing India’s maritime connectivity with her littoral neighbours. The paper will start with contextualization of BIMSTEC in regional maritime connectivity endeavours.

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A Renewed Focus on Maritime Matters In spite of its existence for more than two decades, BIMSTEC is still in its nascent stage. The pace of development of the organization is sluggish. Nonetheless, the fact remains that BIMSTEC has gained salience in the recent past. As part of a larger maritime strategic space called the Indo-Pacific, there has been a revival of strategic and economic interests leading to the reappearance of various connectivity approaches—continental as well as maritime—in the Bay of Bengal region in recent times. From this perspective, BIMSTEC has emerged as a promising subregional grouping. In view of the fact that connectivity is one the most significant issues that engage both strategic and economic aspects of policymaking in the Bay of Bengal region, the members of BIMSTEC are taking initiatives to strengthen greater connectivity in terms of infrastructure building to facilitate greater economic benefits. India, in particular, with its Look/Act East Policy has a major stake in bringing together South Asian and SEA countries in such a common endeavour. This may have long-standing consequences for the balance of power in the Indo-Pacific. For India, developments in connectivity will bring about significant changes in its eastern and northeastern states including the city of Kolkata. India’s northeast could play a significant role in not only further consolidating India-Bangladesh bilateral cooperation but could also offer an opportunity to facilitate BIMSTEC subregional cooperation by engaging other neighbours within the purview of connectivity. However, while there are several infrastructure connectivity projects across the region such as the Trilateral Highway Project, the Kaladan Multi-Modal Transit Transport Project and so on, they have faced challenges such as unforeseen delays or impediments. It is worth mentioning here that at the time of its inception India had identified BIMSTEC as “an expression of India’s Look East Policy of the 1990s, coinciding with Thailand’s Look West Policy” (MEA, 2014). For New Delhi, the BIMSTEC is an “integral part of its ongoing efforts to map out new pathways of geoeconomic cooperation among countries in the region, which it sees as part of its extended neighbourhood” (MEA, 2014). According to Rajiv Bhatia, the former Indian Ambassador to Myanmar, the BIMSTEC was at “risk of being little more than a rebound relationship whenever New Delhi fails to pursue regional cooperation through SAARC”. He further opined that “no matter what happens to SAARC, we should be committed to BIMSTEC” (The Quint, 2018). Moreover, BIMSTEC is purported to play an important role in this new neighbourhood policy because, unlike SAARC’s subcontinental focus, it is “the only forum that brings together India’s strategic peripheries (south, east and north) under one single grouping” (Yhome, 2016). Again, while Bangladesh would like to use BIMSTEC as a platform to locate itself as more than just a small state in the Bay of Bengal, for Sri Lanka this grouping is an opportunity to fulfil its age-old desire to connect with South East Asia and serve as the subcontinent’s transhipment hub for the wider Indio-Pacific region. BIMSTEC provides an opportunity for the two landlocked Himalayan member states, Nepal and Bhutan, to get access to the Bay of Bengal. For Myanmar and Thailand, greater connection with India across the Bay also would facilitate access to India’s mushrooming consumer

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market and, at the same time, balance China and develop an alternative to “China’s massive inroads into South East Asia (Xaviers, 2018: 9–14)”. Over the last few years, the focus on maritime matters has been revived. This has led to a vigorous worldwide drive to reactivate the age-old sea links that once connected the coastal areas of littorals in multiple ways. The Bay of Bengal region is no exception to it (Frost, 2017:3–4). It is true that the extent of maritime connectivity among the rim states in this region varies, with political shifts in these oftenaffecting seamless operations. Nonetheless, almost all the member states of the BIMSTEC have come to realize that improved connectivity would facilitate greater economic exchanges and also strengthen cultural and political ties. Additionally, better maritime links would lead to improved security and management of resources of the oceans. Due to its geographical location on the Bay of Bengal and two natural ports— Chottogram and Mongla—Bangladesh has an advantage over other littorals when it comes to luring foreign shippers. To lessen the increasing demand, Prime Minister Sheikh Hasina inaugurated the Seaport of Payra, Bangladesh’s third seaport, located at the Rabnabad Channel in Kalapara. According to a report on strengthening of port connectivity by ESCAP in April 2018, the actual expansion of market economy and increasing movement of goods needs an efficient transportation network, especially seaborne. Also, regional requirements of port transportation are top priorities to avail the opportunities in a correct way (ESCAP, 2018: 12). Similar to this, as the majority of cargo is transported by sea, seaports in Myanmar, one of the South East Asian nations with the fastest economic growth, have grown into crucial hubs in the logistics system. As a result, the Ministry of Transport and Communications has delegated complete responsibility for port development to the Myanmar Port Authority (MPA) (ESCAP, 2018: 31). The others, excluding Yangon, the main port of the nation, are supposedly minor coastal ports with constrained port-handling capacity. Presently in the Bay of Bengal region, Colombo, the main port of Sri Lanka, has gained importance as a lead transshipment hub. Maritime ties between India and Sri Lanka is inevitably intertwined. For instance, it is estimated that about 30% outbound containers from India pass via Sri Lanka, while 70% containers bound for India pass via Sri Lanka (Basu Ray Chaudhury et al., 2018; 37–38). A tripartite proposal for opening borders among Sri Lanka, Bangladesh and India can enhance maritime interaction. It will be interesting to see Colombo, Chittagong and Kolkata connected on a multimodal set-up. The key question is of stimulus in the region, which will offer the fillip for increased maritime trade and exchange (Ibid.). Thailand has embraced an economic initiative incorporating industrial and urban growth with technology developments, social well-being, economic success and environmental conservation under its Five-Year Plan (2018–2022), known as Thailand 4.0. The five largest ports in the nation—Bangkok, Laem Chabang, Chieng Saen, Chiengkhong and Ranong—have seen a significant growth in maritime activity in recent years. On the Andaman coast, which connects trade with South Asian nations, the port of Ranong has gained attention as a possible port in Thailand for maritime traffic (Ibid.).

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While adopting its Charter for the first time at its Fifth Summit Meeting (28–29 March 2022) BIMSTEC, as the regional organization exclusive to the Bay, rationalized its fourteen sectors of cooperation into seven broad areas for better manoeuvre. Of such seven areas, connectivity is one’ accordingly, in this Summit the member countries have adopted the BIMSTEC Master Plan for enhancing connectivity in the Bay region. The BIMSTEC Master Plan for Transport Connectivity presents a comprehensive 10-year strategy and action plan (2018–2028) supported by the Asian Development Bank (ADB) for improving the region’s transport linkages covering (1) roads and road transport, (2) railways and rail transport, (3) ports and maritime transport, (4) inland water transport, (5) civil aviation and airports development, (6) multimodal and intermodal transport, (7) trade facilitation and (8) human resource development (ADB, 2022). Under these changing circumstances, it is imperative to understand what kind of maritime policies and strategies BIMSTEC as a subregional organization has adopted.

The Priority Projects in BIMSTEC Communication and transportation have long been recognized as important areas for cooperation in BIMSTEC. At its inaugural meeting in New Delhi in April 2001, the BIMSTEC Expert Group on Transport and Communication discussed a few pertinent topics, including transportation and cross-border facilitation, multimodal transport and logistics, infrastructure development, aviation as well as maritime transport with communication linkages and networking. The Asian Development Bank (ADB) was contacted to provide its services in order to improve communication among the member states. The Tenth Session of the BIMSTEC Senior Officials’ Meeting held in Dhaka on 18 December 2005 approved the ADB’s proposal to conduct a BIMSTEC Transport Infrastructure and Logistics Study (BTILS). Accordingly, ADB carried out a study on Transport and Infrastructure aspects in BIMSTEC, which was completed in 2007. The BTILS was further updated and enhanced by ADB in 2014. As many of the projects in the BTILS have already been completed or are nearly on the verge of completion, this Master Plan addresses various other missing connectivity requirements in the region, encompassing a long-term development programme, to 2028 (ADB, 2022: XI). The BIMSTEC Master Plan (based on ADB’s study) identifies 267 projects which will enhance the connectivity in the Bay of Bengal region at an estimated cost of about $22.0 billion over the 10-year period (2018– 2028) for the “flagship” or “signature” projects, excluding ongoing ones. One of the recommendations of the study was to create a single Working Group on transport and trade facilitation to be referred to as BIMSTEC Transport Connectivity Working Group (BTCWG) (ADB, 2018). The inaugural meeting of the BTCWG held in Bangkok, Thailand, in August 2016, reviewed the key agreements reached at the Final BTILS Workshop. It covered modernized and improved policies/strategies, priority projects, monitoring framework, action plan, theme and institutional arrangements and formulated the draft

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Terms of Reference (ToR) of the BTCWG and monitoring system for the projects. Later the BIMSTEC leaders, during the Goa Retreat in October 2016, agreed to explore the possibility of having a BIMSTEC Motor Vehicle Agreement (MEA, 2019). The leaders also agreed to prepare a Master Plan for BIMSTEC Connectivity and to conclude BIMSTEC Coastal Shipping Agreement. One year later, the second meeting of the BTCGW held in Bangkok on 13–14 November 2017 finalized the modalities of drafting the BIMSTEC Master Plan on Transport Connectivity with the technical assistance of ADB. It is to be noted here that as a leading country in the transport and communication sector India drafted the text of the BIMSTEC Coastal Shipping Agreement as well as the Motor Vehicles Agreement for the Regulation of Passenger and Cargo Vehicular Traffic between and among BIMSTEC member countries. The draft of the Coastal Shipping Agreement was placed for approval in the First Working Group Meeting held in New Delhi on 27–28 November 2017, while the draft of the Motor Vehicle Agreement was submitted for negotiation in the Working Group’s meeting held on 9–10 April 2018 in New Delhi. During the Fourth BIMSTEC Summit held in Kathmandu, Nepal, on 30–31 August 2018, the leaders of the BIMSTEC member states reaffirmed their determination to establish seamless multimodal transportation linkages and smooth, synchronized and simplified transit facilities through the development, expansion and modernization of highways, railways, waterways, sea routes, airways in the region and directed to speed up efforts to conclude the BIMSTEC Coastal Shipping Agreement. The leaders were eager to draft a BIMSTEC Master Plan on Transport Connectivity; simultaneously, they were keen to see its quick adoption. The Master Plan was to serve as a strategic document to guide actions and promote synergy among various connectivity frameworks, such as the ASEAN Master Plan on Connectivity 2025 (MPAC, 2025), the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS), to achieve enhanced connectivity and sustainable development in the region. Accordingly, one workshop was also organized in Bangkok on 17–18 September 2018 to discuss the progress made on the BIMSTEC Master Plan on Transport Connectivity (ADB, 2018). Maritime transport already plays an important role in trade in all BIMSTEC member states including landlocked Nepal and Bhutan directly or indirectly. For the majority of the BIMSTEC countries, except Bhutan and Nepal, international trade as well as intra-BIMSTEC trade in terms of tonnage is carried by sea. This is because of a combination of the physical constraints to land connectivity, the lower unit costs of maritime transport compared with that of long-distance road transport, the types of goods being traded and the concentration of supply and demand along seaboards, among others. Even in trade between India and the landlocked member states, this traffic often includes significant re-exports of goods that originally come through the Indian ports (ADB, 2022: 44). This situation clearly indicates the important role of maritime transport and in particular seaports in future transport development of the BIMSTEC region. ADB’s study of the current port environment (Phase-I report of the BTILS) has identified two outstanding key areas of concern that are common to several countries

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and therefore could be considered worth discussing within the BIMSTEC dimension: (a) access to deeper water to enable larger vessels to call and (b) the container handling performance at some of the key ports in the Bay of Bengal. To expedite trade and promote economic development in the vicinity of port complexes, BIMSTEC recognizes the need for the development of deeper water ports in the northern parts of the Bay of Bengal and the Andaman Sea to accommodate larger container feeder vessels. To facilitate these developments, the Master Plan has adopted several key strategies. These comprise the development of new ports and expansion of existing harbour infrastructure to increase the capacity of the region’s ports to handle growth in container traffic; investment in additional container handling equipment corresponding to the demand and the need to improve handling performance in line with global good and best practice. Development of coastal or short-sea shipping and Inland Water Transport have also been identified as two interconnected areas of development (Ibid. xvi). BIMSTEC needs to actively promote the development of new ports in the member states and the expansion of existing harbour infrastructure designed to increase the capacity of the region’s ports to handle the anticipated growth in container traffic (ADB, 2022: xvii). Table 14.1 depicts the important planned projects to develop deeper water ports on the Bay of Bengal and the Andaman Sea.

Linking up Inland Waterways It is true that initially the ADB study in 2007 did not include the development of inland waterway transport as a specific agenda and several reasons were responsible behind that decision: first, there was a lack of clarity in relation to firm development programmes at that time; secondly, this form of transport was only applicable to three-member states: Bangladesh, India and Myanmar and thirdly, inland waterways were principally used for domestic, rather than international transport. Its importance in the international sector was relatively minimal and mainly restricted to the carriage of low-value products, such as aggregates and some cereals and rice. Indeed, the situation remains almost unchanged (ADB, 2018). However, more attention has been given in recent past to strengthen cooperation in dealing with inland waterways as linking projects with the major ports of the member states in India, Bangladesh, Nepal and Myanmar. (ADB, 2018) After all, the fact remains that as a promoter of regional economic development BIMSTEC needs to emphasize on inland waterways as it supports all forms of transport development in the member states. Presently, Nepal has also shown its interest to be included in the integrated network of inland waterways. If effectively promoted, this integrated network comprising of Bangladesh, India, Myanmar and Nepal may emerge as a hub of connectivity. Observing the increasing importance of inland waterways in short-sea shipping and maritime connectivity, the member states on BIMSTEC have decided to

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Table 14.1 Planned projects to develop deeper water ports on the Bay of Bengal and the Andaman Sea Code

Project description

BIMSTEC development logic

Estimated Possible funding Timescale cost ($ sources million)

BAN-PM-002 Karnaphuli Container Terminal at Chattogram

New container facilities in congested port-handling BIMSTEC traffic

200

Government (Port Authority)

2022–2026

BAN-PM-006 Payra Port Development project (first terminal, connecting roads, bridge over the Andamanik River and other related facilities

New Seaport to serve Southern Bangladesh and possible Bhutan and Nepal

474

Government

2018–2021

BAN-PM-007 Upgrading of Mongla port (construction of container terminal for cargo handling equipment, tower, and container delivery yard)

Improvement of Bangladesh’s second port which serves Bhutan, India and Nepal

656

Government and 2018–2021 ILOC

IND-PM-014

Increased capacity at the major BIMSTEC gateway

200

Government and To be ADB programmed

Augmentation of capacities of Haldia Dock complex and Kolkata Port Trust (new lock gate in existing dock or basin and modifications of the existing lock gate)

MYA-PM-016 New port facilities at Thalwa Special Economic Zone

New port 175 (JPY complex to 19,087 handle billion) intra-BIMSTEC trade

Government, JICA and ppp

2016–2019

(continued)

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Table 14.1 (continued) Code

Project description

BIMSTEC development logic

Estimated Possible funding Timescale cost ($ sources million)

MYA-PM-017 New port facilities at Dawei

Potential new maritime link between South and South East Asia

3056

SL-PM-020

Extension of East terminal at Colombo

Facilitation of 430–1150 Government (Sri 2014–2022 handling the Lankan Ports international Authority-400 m cargo including of container transhipment yard) and BOT and bilateral traffic with other BIMSTEC member countries

SL-PM-021

Construction of west terminal at Colombo

Provision of additional capacity handling of mega container ships

THA-PM-023 Development Provision of of phase III of additional Laem Chabang capacity including handling of BIMSTEC traffic

Investor

To be programmed

840

BOT

2022–2026

1500

Port Authority of Thailand and others

2019–2022 (feasibility study now underway

Source Asian Development Bank, BIMSTEC Master Plan for Transport Connectivity, April 2022, p. 45 https://www.adb.org/sites/default/files/institutional-document/740916/bimstec-master-plantransport-connectivity.pdf

include inland waterways into the Master Plan to ensure the development of sustainable, economically viable inland water transport between member states through multimodal and intermodal connectivity. Table 14.2 presents the planned flagship projects to develop international inland water transport in the BIMSTEC region.

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Table 14.2 Planned projects in the segment of Inland waterways in BIMSTEC region Code

Project description

BIMSTEC development logic

Estimated cost, 2018 ($ million)

(Possible) Funding sources

Timescale

REG-IW-01 (BAN, BHU, NEP, IND, MYA)

Study of opportunities to improve inland water transport in the BIMSTEC region

Historically important mode, which offers potential for sustainable, economically viable cross-border transport, as well as multimodal and intermodal connectivity

3

Not yet identified

2019–2020

REG-IW-02 (BAN, BHU, NEP, IND, MYA)

Investment projects to improve inland water transport in the BIMSTEC region

As above

Not yet specified

Not yet identified

2020–2023

ABD—Asian Development Bank, BAN—Bangladesh, BHU—Bhutan, BIMSTEC—Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, IND—India, MYA—Myanmar, NEP—Nepal, REG—Regional Source Asian Development Bank Source Asian Development Bank, BIMSTEC Master Plan for Transport Connectivity, April 2022, p. 55 https://www.adb.org/sites/default/files/institutional-document/740916/bimstec-master-plantransport-connectivity.pdf

Development of Coastal/Short-Sea Shipping (Maritime Transport Cooperation) Coastal shipping has been proposed as a potential area of collaboration within the BIMSTEC framework. Coastal or short-sea shipping is the term used to describe the movement of goods and people mostly along a coastline rather than across an ocean. Costs are inherently cheap since this region of the sea has different requirements for the transportation of vessels than do worldwide norms. The 2nd meeting of the BIMSTEC Working Group to finalize the draft text of the Agreement on Maritime Transport Cooperation was held virtually in New Delhi on 30 August 2022. The member states expect that when concluded, the Agreement would benefit strengthening and development of relations in merchant shipping and maritime transport, contributing to the growth of regional commercial ties within BIMSTEC. India alone boasts a 7500 km long coastline. To maximize the potential of the nation’s coastline and river network and improve its national, port-led development, the Sagarmala Programme was established. As part of its Southern Economic Corridor Project, Thailand has ambitions to develop Ranong Port as a substitute

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(ADB, 2022: 49–50). The BIMSTEC Master Plan has enlisted some flagship projects to enhance coastal shipping in the region (Table 14.3; see Map 14.1). After India-Bangladesh Coastal Shipping Agreement in 2015, another significant area of bilateral cooperation can be India-Thailand coastal shipping. In this connection, the Ranong Port can play an important role in connecting with Myanmar, Bangladesh and the east coast of India. Talks are underway between Myanmar and Thailand on coastal shipping with Chattogram. Plans are also afoot for port-to-port cooperation between India and Thailand. Coastal shipping can form an important segment of these discussions as it can only be done on a port-to-port basis. Such cooperation would depend a lot on port-to-port dialogue and the demands and requirements of the respective ports. With illegal fishing an important area of concern in the Bay, monitoring of fishing activities in these waters is a further sector for cooperation between the two countries. There are also plans to expand the hinterland connectivity of the port with the railway from Inland Container Depot (ICD) at Ladkrabang to Chumphon province (Basu Ray Chaudhury et al., 2019: 22). To India, promotion of coastal shipping is topmost priority of the Ministry of Shipping under Sagarmala. The Ministry, on this instance, has undertaken several initiatives to promote coastal shipping in the country. To sustain this pace of development and seek further growth of coastal trade, a perspective plan up to 2025 on development of coastal shipping in India has been prepared by Asian Development Bank. In this context, it is noteworthy that in international collaboration three Memorandums of Understanding (MoUs) were signed between Ranong Port (Port Authority of Thailand) and the Port Trusts of Chennai, Vishakhapatnam and Kolkata during the Conclave held in Goa in 2019. These MoUs will contribute to BIMSTEC objectives of strengthening connectivity and are part of India’s Act East Policy (Roy Chaudhury, 2019). It is expected that these MoUs will improve connectivity between Table 14.3 Planned flagship projects under coastal shipping segment Code

Project description

REG-PM-024 Study to develop (BAN, IND, coastal shipping MYA, SRL and THA) REG-PM-024 (BAN, IND, MYA, SRL and THA)

BIMSTEC Estimated (Possible) development cost, 2018 Funding logic ($ million) sources

Timescale

Develop regional trade by short-sea shipping

Not yet estimated

Not yet 2018–2028 identified, but ADB support for initial study

Investment projects As above to improve costal shipping in BIMSTEC region

Not yet estimated

Not yet identified

2020–2023

BAN—Bangladesh, BIMSTEC—Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation, IND—India, MYA—Myanmar, SRL—Sri Lanka, THA—Thailand Source Asian Development Bank, BIMSTEC Master Plan for Transport Connectivity, April 2022, p. 50 https://www.adb.org/sites/default/files/institutional-document/740916/bimstec-master-plantransport-connectivity.pdf

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Map 14.1 Proposed New Coastal Shipping Routes from Ranong. Source Asian Development Bank, BIMSTEC Master Plan for Transport Connectivity, April 2022, p. 50. https://www.adb.org/sites/ default/files/institutional-document/740916/bimstec-master-plan-transport-connectivity.pdf

ports on Thailand’s west coast and ports on India’s east coast, i.e. Chennai, Vishakhapatnam and Kolkata. Economic partnership is also expected to be enhanced through the cutting down of sea travel time between India and Thailand from 10–15 days to 7 days (Ministry of Shipping, 2020). Recently, the Adani Group has been considering connectivity with the Bangladesh market through small carrier vessels. However, there are a lot of infrastructural issues involved. With Sri Lanka, there are currently two services: the MAERSK shuttle service between Colombo, Chennai, Kattupalli, Krishnapatnam and Salalah in Oman and the CCG (Chennai-Colombo-Gulf) service from Kattupalli to Colombo. There is also a planned pick-up service from India’s east coast to Colombo. Kattupalli, too, is looking for vessels that can directly connect the port to Colombo and through a weekly feeder movement to tap into the Sri Lankan market. Presently, the Chennai Port is making a dedicated coastal berth, and on government’s order it may also be reserved for Bangladesh and Myanmar, which will greatly reduce time in trade as a berth will always be ready for use. There is presently no coastal shipping from Kolkata Port to Myanmar, but it is very much desirable as direct access from Kolkata to Sittwe will take about two days through the Kaladan Multimodal Transit Transport Project (KMTTP). At present, there is a lack of imports from Bangladesh to the Kolkata Port. With Sri Lanka, there are 16 mostly feeder operations (Ibid: 14). The Kolkata Port offers connectivity to the sea for the landlocked countries of Nepal and Bhutan. It already handles most of Nepal’s cargo, and recently, this has

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received a boost owing to the large dispatches of construction and polling material to the country. So far as Haldia Dock is concerned, containerized cargo-feeder services exist between the Haldia and Colombo and may be further enhanced.

Situating India’s Northeast in BIMSTEC Inland Waterways Network Apart from the comprehensive vision of regional connectivity, what represents India’s active role in BIMSTEC is the larger national goal of transforming its northeastern states by opening up fresh avenues of economic opportunities. In fact, it has been argued that BIMSTEC could be a potential game-changer for prosperity of India’s northeastern region (NER). “Future of India’s Northeast is very closely interlinked with what neighbouring counties are doing, especially Bangladesh”. (Indian Express, 2019). In this regard, inland waterways could play a pivotal role. Under the Protocol on Inland Water Transit and Trade since 1972 and the Coastal Shipping Agreement, 2015, between India and Bangladesh only cargo movement has taken place so far. A MoU in April 2017 and a Standard Operating Procedure (SOP) in October 2018 were signed between the two countries to encourage movement of passenger and cruise services on the inland waterways. In 2019, a cruise service between Kolkata and Dhaka was inaugurated by India, and a similar cruise service has been initiated by Bangladesh. Four cruise vessels have travelled between India and Bangladesh in 2019. NW 2 is the main protocol route between India and Bangladesh from KolkataSundarban Chalna-Khulna-Mongla, Kaukhali-Barisal-Narayanganj-Aricha-DhubriPandu-Silghat. Floating terminal for assisting cargo movement has been provided and maintained at ten locations, namely Dhubri, Jogighopa, Tezpur, Silghat, Vishwanathghat, Neamati, Bogibeel, Dibrugarh, Panbari and Oriumghat. National Waterway 16 (River Barak) has also become highly important in promoting connectivity between India’s northeast and Bangladesh, connecting the northeast with Kolkata through India-Bangladesh protocol routes. It covers the hinterlands of Manipur, Mizoram and Tripura, in addition to Assam. NW 16 diverges from Narayangaj towards Bhairabbajar-AjmerganjKarimganj-Lakhipur (Basu Ray Chaudhury et al., 2018: 69). Bangladesh has allowed India to use of its Chattogram and Mongla ports for transit movement of Indian goods through waterways, rail, road or multimodal transport in its territory. This alternative connectivity is expected to enhance development of India’s northeast by increasing trade volumes and reducing logistic costs. Eight routes have been provided under the agreement which would enable access to NER via Bangladesh. The routes identified allow entry/exit to Agartala and Srimantpur in Tripura, Dawki in Meghalaya and Sutarkandi in Assam. Bangladesh agreed to furnish a proposal on the administrative fee to be charged for Indian transit cargo, after discussions with India.

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It is noteworthy in this context that presently, the Bangladesh Government has welcomed private sector investments in developing the Inland Container Terminals (ICT) to ferry containers from Dhaka via river routes to seaports to avoid shipment delays caused by acute road congestion. The Rupayan Group and Summit Power have showed their interest in this and have planned to start service shortly. Additionally, the government has approved the construction of two other ICTs 15 km away from Dhaka, by the Meghna Group and the A. K. Khan group (Basu ray Chaudhury, 2020: 2219–227). Recently, in the Treaty of Transit, India and Nepal have agreed to include inland waterways connectivity as an additional mode of transport. Three routes for clearing of cargo have also been agreed by both countries (Roy Chaudhury, 2019). It is anticipated that the successful completion of the Jal Marg Vikas Project will probably be beneficial to Nepal. The Kalughat terminal would enable transportation of cargo from Kolkata to Nepal through this waterway. Further, the Gazipur terminal, which is dedicated to LNG (liquefied 17 natural gas) trade, would facilitate the transportation of LNG to Nepal via Gazipur. An attempt has been made to turn Inland Waterway Transport (IWT) terminal at Jogighopa in lower Assam into a cargo movement hub to facilitate trade with Bhutan and Bangladesh. The techno-feasibility studies of Ghagra, Gandak and Kosi rivers will also provide insights on the possibility of connecting Nepal and India through waterways (Basu Ray Chaudhury et al., 2018: 89). India is also very keen to strengthen its inland waterways connectivity with Myanmar. The Inland Waterways Authority of India has also taken up a project to develop KMTTP. This is being implemented by Ministry of External Affairs (MEA). This project aims to provide an alternative connectivity to the NER from the Kolkata/ Haldia port. Phase-I of KMTTP has been completed. In May 2019 IWAI in association with MEA organized a stakeholders’ conference in Kolkata in connection with the selection of a Port Operator for Phase-I of KMTTP. During discussions, operators/stakeholders in Myanmar and India showed keen interest in bidding. It is to be noted here that an IWAI vessel is carrying 1000-ton cargo from Bhutan to Bangladesh over NW 2 (Brahmaputra). However, the fact remains that the inland waterways connectivity still has not taken off the way it has been desired (Basu Ray Chaudhury, 2020). The pressing issues like necessity of dredging, lack of assured fairways required navigational facilities and lack of IWT vessels are creating roadblocks. But, if promoted efficiently in an integrated way the BBIN region (Bangladesh, Bhutan, India and Nepal) can emerge as hinterland of BIMSTEC.

Conclusion Within BIMSTEC international trade between most of the member countries (excluding Bhutan and Nepal) is carried by sea. More so, most intra-BIMSTEC trade in tonnage terms is currently carried by sea due to physical constraints to land connectivity, the lower unit costs of maritime transport compared with those of longdistance road transport, the types of goods traded and the concentration of supply

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and demand along seaboards (ADB, 2022: 44). According to ADB’s study, even the trade between India and the landlocked member states often includes significant re-exports of goods that originally came through Indian ports. Under the circumstances, maritime transport and seaports do have a significant role in future transport development of the BIMSTEC region (Ibid.: 49). While analysing the BIMSTEC Master Plan and its relevance in enhancing maritime connectivity in the Bay region, it is imperative to understand the strategic position of this “triangled” water space in the context of wider Indo-Pacific. The Indo-Pacific is a major market comprising 38 countries, with 65 per cent of the world’s population, 62 per cent of the world’s GDP and 46 per cent of the world’s merchandise trade. For this market to be optimally utilized, there is a need for greater maritime connectivity and BIMSTEC is a steppingstone towards this goal (Basu Ray Chaudhury et al., 2018: 63). Against the backdrop of the fast-changing geostrategic milieu BIMSTEC as a regional group may think of including few other non-member states as observers (this policy has been adopted in the Charter). Going by the shared interests with countries like Malaysia, Indonesia and Singapore, it is possible that the membership of BIMSTEC may be expanded to BIMSTEC Plus. Since the Bay has become a key transit route between the Indian Ocean and the Pacific Ocean, it has come to be located at the crossroads of Indian and Chinese strategic interests. The impact of this has been felt keenly by all other BIMSTEC member countries. The Bay is also home to important sea lanes of communication which are used for trade through the Strait of Malacca. The emphatic rise of China has created anxieties about the freedom of navigation in these waters. Efforts are thus being undertaken by the powers that operate in these waters to revive connectivity across the Bay and partake of its benefits. As the entire world is going through an unprecedented situation due to COVID 19 pandemic, it is important to see how BIMSTEC member countries will go forward with their connectivity agenda. Nonetheless, it is true that at a critical strategic crossroads the BIMSTEC in its own way has an opportunity to set an example. Due to the rapidly shifting geostrategic environment, BIMSTEC as a regional organization can consider inviting a few other non-member governments to participate as observers (this policy has been adopted in the Charter). It is feasible that the membership of BIMSTEC may be enlarged to BIMSTEC Plus based on the shared interests with nations like Malaysia, Indonesia and Singapore. The Bay has developed into a crucial link between the Indian and Pacific Oceans, placing it in the nexus of Indian and Chinese strategic interests. All other BIMSTEC member countries are acutely aware of its effects. Important marine channels of communication that are used for trade through the Strait of Malacca are also located in the Bay. Concerns over the freedom of navigation in these waterways have arisen because of China’s egregious rise. The powers that operate in these seas are therefore trying to restore connectivity throughout the Bay and benefit from it. Needless to say, that the COVID 19 epidemic has put the entire world in an unprecedented scenario at present. Therefore, it will be interesting to observe how BIMSTEC member countries go forward

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with their connectivity agenda. However, the BIMSTEC has a chance to lead by example at a pivotal strategic juncture.

References ASEAN. (2019, June 23). ASEAN Outlook of the Indo-Pacific. https://asean.org/asean-outlookindo-pacific/#:~:text=The%20Asia%2DPacific%20and%20Indian,opportunities%20as%20w ell%20as%20challenges. Accessed September 12, 2020. Asian Development Bank (ADB). (2018, July). Maritime Policies and Strategies. Updating and enhancement of BIMSTEC transport, infrastructure and logistics study: Final report. file/// D:/From%20Googlr%20drive%202020/BIMSTEC%20Documents/Sector%20wise/transport/ ADB%20-%20Updating%20BIMSTEC%20Transport%20Logistics%20Study.pdf. Accessed September 27, 2020. Asian Development Bank. (2022, April). BIMSTEC master plan for transport connectivity. https:// www.adb.org/sites/default/files/institutional-document/740916/bimstec-master-plan-transportconnectivity.pdf Basu Ray Chaudhury, A., Basu, P., Bose, S., & Banerjee, S. (2018). India’s maritime connectivity: Importance of the Bay of Bengal. Observer Research Foundation. Basu Ray Chaudhury, A., Basu, P., & Bose, S. (2019). Exploring India’s maritime connectivity in the extended Bay of Bengal. Observer Research Foundation. https://www.orfonline.org/wp-con tent/uploads/2019/11/ORF_Report_India-ExtendedBOB.pdf. Accessed April 25, 2020 Basu Ray Chaudhury, A. (2020, July–September). Re-connecting neighbours: India-Bangladesh relations@50. Indian Foreign Affairs Journal, 15(3), 219–227. De, P. (2019, September 29). Reshaping Indo-Pacific Cooperation. The Economic Times. https:// economictimes.indiatimes.com/blogs/et-commentary/reshaping-indo-pacific-cooperation/. Accessed September 12, 2020. ESCAP. (2018, April). Strengthening transport connectivity from/to port for selected countries. https://www.unescap.org/sites/default/files/PORT%20TRANSPORT%20CONNECTIVITY. pdf. Accessed October 1, 2020. Frost, E. L. (2017, May 31). It’s time to deepen integration around the Bay of Bengal. Carnegie. Indian Express. (2019, December 13). Northeast India to play key role in BIMSTEC connectivity master plan: M. Shahidul Islam. https://indianexpress.com/article/north-east-india/tri pura/northeast-india-to-play-key-role-in-bimstec-connectivity-master-plan-m-shahidul-islam/. Accessed September 16, 2020. Ministry of External Affairs (MEA). (2018, June 1). Prime Minister’s Keynote Address at Shangri La Dialogue. Ministry of External Affairs, Government of India. https://mea.gov.in/outogingvisit-detail.htm?29943/Prime+Ministers+Keynote+Address+at+Shangri+La+Dialogue+June+ 01+2018. Accessed September 12, 2020. Ministry of External Affairs (MEA). (2019, November 7). First BIMSTEC Conclave of Ports, Vishakhapatnam (November 7–8, 2019). https://www.mea.gov.in/press-releases. htm?dtl/32010/First+BIMSTEC+Conclave+of+Ports+Vishakhapatnam+November+78+2019. Accessed September 27, 2020 Ministry of External Affairs. (2014, February 26). Transcript of Media Briefing by Foreign Secretary. https://mea.gov.in/media-briefings.htm?dtl/23008 Ministry of Shipping. (2020, March 9). The year-end review 2019. http://sagarmala.gov.in/ media/press-release/year-end-review-2019-ministry-shipping-24-decm. Accessed September 28, 2020. Paradip Port. (2017). Annual administration report, 2016–2017. http://paradipport.gov.in/Writer eaddata/Administrative/Annual_Admin_Report_PPT_2016_17.pdf

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Roy Chaudhury, D. (2019, November 7). India’s Indo-Pacific agenda gets boost through port connectivity with Thailand. https://economictimes.indiatimes.com/news/politics-and-nation/ indias-indo-pacific-agenda-gets-boost-through-port-connectivity-with-thailand/articleshow/ 71960871.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst. Accessed September 27, 2020. Saha, P. (2019, June 28). ASEAN’s Indo-Pacific outlook: An analysis. https://www.orfonline.org/ expert-speak/aseans-indo-pacific-outlook-an-analysis-52542/, accessed September 22, 2020. The Quint. (2018, August 20). BIMSTEC envoys call for early conclusion of FTA. https://www.the quint.com/hotwire-text/bimstec-envoys-call-for-early-conclusion-of-fta. Accessed July 5, 2020. Xavoers, C. (2018). Bridging the Bay of Bengal toward a stronger BIMSTEC (pp. 9–14). Carnegie India, Carnegie Endowment for International Peace. Yhome, K. (2016). BIMSTEC and India’s shifting diplomatic calculus. http://www.orfonline.org/ expert-speaks/bimstec-india-shifting-diplomatic/ Yhome, K. (2017). BIMSTEC rediscovering old routes to connectivity. Issue Brief 213, Observer Research Foundation. https://www.orfonline.org/research/bimstec-rediscovering-oldroutes-connectivity/. Accessed October 10, 2020.

Chapter 15

Regional Integration in the Bay of Bengal Region in Post-COVID-19 Period Prabir De

Abstract This article tells us that regional integration can lead to substantial economic gains in the BIMSTEC region, particularly in the post-COVID-19 period. Regional integration in the BIMSTEC can be a building block for global integration. However, the benefits of the regionalism are likely to depend on the integration spirit of the BIMSTEC countries. This article discusses the next round of the integration of the BIMSTEC region at a time when Coronavirus-driven pandemic and its successive rounds have heavily affected the growth of the region. The responses to the current global uncertainties also suggest a greater scope of regional cooperation among the countries in the BIMSTEC region. Regional integration may help the BIMSTEC countries overcome divisions that impede the flow of trade in goods and services, people and ideas, particularly when all members have been facing a common challenge to beat the Coronavirus pandemic. Keywords BIMSTEC · Bay of Bengal region · Trade · Integration · Regional cooperation

Introduction The BIMSTEC region is presently home to around 1.6 billion people, which constitute around 23% of the world population. It brings together a US$3 trillion economy, which accounts for 4% of the global GDP and 3.7% of the global trade.1 The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is a seven-nation organization of Bangladesh, Bhutan, India, Myanmar, 1

Data correspond to the year 2020.

Views are author’s own. Usual disclaimers apply. This chapter is based on author’s earlier work on BIMSTEC. Views are author’s own. Usual disclaimers apply. P. De (B) Research and Information System for Developing Countries (RIS), New Delhi, India e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2023 L. Ghosh and A. B. R. Chaudhury (eds.), India’s Relations with Neighboring South and South East Asian Countries, Dynamics of Asian Development, https://doi.org/10.1007/978-981-99-4610-5_15

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P. De

Nepal, Sri Lanka and Thailand. BIMSTEC, the regional initiative in the Bay of Bengal, is a unique regional cooperation initiative in terms of geographical contiguity and access to the ocean. It not only has direct access to the Bay of Bengal but also enjoys shared history and civilizational links. Bay of Bengal countries are at different levels of development with different income levels. It has three developing countries (India, Sri Lanka and Thailand) and four least developed countries (LDCs) (Bangladesh, Bhutan, Nepal and Myanmar). On one hand, the region has two landlocked LDCs (Bhutan and Nepal), while, on the other, it has five littoral countries. Three Bay of Bengal countries, namely Bangladesh, Myanmar and Nepal, are likely to gain developing country status a few years from now. Among the seven member countries, five members of BIMSTEC are also members of SAARC, two are part of ASEAN and six are part of SASEC. BIMSTEC appears as a connector to multiple regional initiatives. For example, due to cross-regional FTAs between some of the member countries, BIMSTEC has become an effective alternative for the Bay of Bengal countries to connect with the world. Notwithstanding its cross-regional structure, BIMSTEC has high economic potential, given the region’s economic dynamism, huge markets and rich natural resources. All seven Bay of Bengal countries have been affected heavily by the ongoing Coronavirus pandemic. Removal of the additional costs of the ongoing pandemic coupled with enhanced trade facilitation and connectivity would raise the trade volumes and economic welfare subsequently in the Bay of Bengal region. The responses to the Corona pandemic also suggest a greater scope of regional cooperation among the countries in the Bay of Bengal region. Here, regional cooperation could help in reducing the costs of pandemic-driven barriers and facilitating regional integration. Regional integration may help the BIMSTEC countries overcome divisions that impede the trade flows, movement of people and capital, particularly when all members have been facing a common challenge to beat the Coronavirus pandemic. In view of the above, this chapter briefly discusses the major challenges being faced by the BIMSTEC countries and the way forward in the post-COVID-19 period. The rest of the chapter is arranged as follows. Section 15.2 presents the trends in economic growth in the region, which has been the key to regional economic integration and analyses the likely economic loss due to the COVID-19 pandemic. Section 15.3 then discusses the progress and achievements in regional cooperation in the BIMSTEC region with particular reference to the pandemic period in Sect. 15.3. Section 15.4 then presents the opportunities and the regional response to deal with the ongoing pandemic. Finally, conclusions are drawn in Sect. 15.5.

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Rising Bay of Bengal and the Coronavirus Pandemic The decade (2010–2019) became highly rewarding in terms of growth in the Bay of Bengal region. As noted in Table 15.1, between the two consecutive decades, smaller economies in the Bay of Bengal region managed to grow faster than larger economies in the later decade, which is a positive sign of regional prosperity and inclusivity. With a rate of growth of over 10% per annum, the GDP of Bangladesh, for example, expanded over five times in the last two decades and reached US$302.57 billion in 2019 from US$53.37 billion in 2000. In terms of growth, Nepal comes next. Such a spectacular expansion of economic size was accompanied by higher openness to trade, strong global growth and a powerful regional partnership in the Bay of Bengal region. Another vital aspect of the Bay of Bengal region is that it has two relatively large middle-income economies, namely India and Thailand, which generously provide higher market access to the remaining Bay of Bengal countries, thus pulling up the regional demand and supply on a continuous basis. India is a rising economic power, whereas, Thailand, on the other, is the second-largest economy in ASEAN. Besides, a sense of common public goods (e.g. shared natural resources, security, education, cuisine, music) is quite distinctly visible among the countries in the region. Today, the entire Bay of Bengal region has been hit hard by the Coronavirus pandemic. Dual effects of the pandemic and the global and national lockdown have caused havoc on the Bay of Bengal countries as a result of which regional economies except Bangladesh, Bhutan and Nepal are already plunged into economic recession in 2020 (IMF, 2020). As illustrated in Table 15.2, the Bay of Bengal region might have faced about 9.11% GDP loss (US$355.37 billion) in US$ current price or 7.67% in PPP terms (Int$ 952.80 billion) during 2020–22, perhaps the highest economic loss ever since the Great Depression of the 1930s. Smaller economies depending Table 15.1 GDP growth of BIMSTEC countries GDP (2000–2009)

GDP (2010–2019)

Size 2000 (US$ billion)

Growtha (%)

Size 2019 (US$ billion)

Growtha (2010–2019) (%)

Bangladesh

53.37

6.74

302.57

10.13

Bhutan

0.42

11.26

2.53

5.04

India

468.39

11.10

2868.93

5.52

Myanmar

8.91

15.28

76.09

4.38

Nepal

5.49

8.87

30.64

6.71

Sri Lanka

16.33

9.92

84.01

4.01

Thailand

126.39

8.34

543.55

4.77

a

(2000–2009),

Note CAGR GDP taken at current price Source Author’s own based on WDI, the Word Bank

188 Table 15.2 Regional economic loss of Bay of Bengal region, 2020–2022

P. De

GDP Loss (Bln.)

Share in GDP (%)

At current US$ price

355.37

9.11

At current PPP Int $

952.80

7.67

Source Calculated by author based on IMF WEO Database, October 2020

on the region for their “bread and butter” are more vulnerable to such crisis. Let’s examine this vulnerability in terms of trade. The rising intraregional trade is another manifestation of growing regional integration in the Bay of Bengal region—which increased to 7.20% in 2019 from 5.50% in 2010 (Fig. 15.1). Dependence on the region in terms of trade has gone up. Bhutan and Nepal heavily depend on the Bay of Bengal region for their trade (Table 15.3). For example, almost 98% of Bhutan’s global exports were directed to the Bay of Bengal region in 2019, increased from 85% of 2000. Similarly, about 69% of Nepal’s global exports were directed to the Bay of Bengal region, up from 43% of 2000. India, the largest economy of the Bay of Bengal region, has exported US$25.45 billion in 2019 to the region, followed by Thailand (US$13 billion) and Myanmar (US$ 4 billion). Intraregional trade during the COVID-19 period has faced deceleration and the trade volume has declined.

Likely Trade Scenario in Post-COVID-19 We have estimated the future trade scenario in Bay of Bengal region based on a Gravity model. Appendix 1 presents the model, detailed methodology and estimated results. The results are robust and statistically significant. Table 15.4 and Fig. 15.2 present India’s likely export to and import from Bay of Bengal countries for the years 2021 and 2025. Following three findings are worth noting. First, India’s exports to the Bay of Bengal countries faced deceleration in 2020, compared to previous years. India’s total exports to Bay of Bengal region are likely to exceed US$45 billion by 2025 (which was US$25.45 billion in 2019). On the other, exports of remaining Bay of Bengal countries to India are estimated to grow slowly. In 2019, rest of Bay of Bengal countries exported only US$10.7 billion to India, which, based to our trade forecast, is likely to touch US$18 billion in 2025. Therefore, this trend clearly suggests that India’s imports from Bay of Bengal region may face higher deceleration, compared to India’s exports during 2021–2025. Second, India’s top three export partners in the Bay of Bengal are likely to be Bangladesh, Nepal and Thailand in 2025. However, India’s top three import partners among Bay of Bengal countries will continue to be Thailand, Bangladesh and Sri Lanka. Unlike India’s exports, the forecasts suggest no change among India’s top three import partners.

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Fig. 15.1 Trends in intraregional trade in BIMSTEC. Source Calculated based on DOTS, IMF

Third, exports of smaller and landlocked countries, namely Bhutan, Myanmar and Nepal, to India are forecasted to grow faster in post-COVID-19 years, suggesting a likely emergence of higher market access in India. To conclude, with the rise of uncertainties, the COVID-19 pandemic has disrupted normal economic activities and life in the Bay of Bengal region. However, with economies bouncing back and spread of the virus and other disasters in check, a comfortable economic rebound is very possible. But there is no room for complacency. An economic recession, if prolonged, can lead to long-term damage to the regional economy, particularly output and productivity growth. In such unfolding scenario, a comprehensive strategy addressing the impact of the current crisis focusing on growth supportive reforms may put the Bay of Bengal countries back on a sustained growth path, rebound the region’s trade and strengthen the regional integration.2 The challenges for the Bay of Bengal countries are, therefore, mainly threefold: first, secure/arrange the vaccines at an affordable rate; second, supply the vaccines with the required technology and sophistication and third, assure safe and 2

This was also the general consensus of the 21st session of the BIMSTEC SOM, held virtually on 2 September 2020.

8.13

0.07

0.01

0.13

0.98

India

Myanmar

Nepal

Sri Lanka

Thailand

0.00

0.00

0.00

0.00

0.69

0.00

Bhutan

7.32

0.79

0.66

0.64

0.50

0.98

India

4.35

0.03

0.00

0.96

0.00

0.03

Myanmar

Notes Intra-BIMSTEC Trade Matrix is in terms of export b Numbers in parentheses show corresponding data for the year 200 Source Author’s calculation based on DOTS, IMF

a

0.00

Bhutan

Bangladesh

Bangladesh

Table 15.3 Intra-BIMSTEC Trade Matrix, 2019

0.10

0.03

0.00

7.10

0.00

0.05

Nepal

0.38

0.00

0.03

4.23

0.00

0.03

Sri Lanka

0.04

0.00

3.26

4.33

0.00

0.03

Thailand

13.14

1.02

0.68

3.99

25.45

0.51

1.12

Intra-BIMSTEC

5.35 (2.11)

8.73 (2.81)

68.85 (42.84)

22.03 (16.10)

7.83 (5.11)

97.59 (84.94)

3.11 (1.66)

Share in World (%)

190 P. De

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Table 15.4 Trade forecast based on gravity model India’s exports to BIMSTEC 2010a

2019a

BIMSTEC’s exports to India

2021

2025

2010a

2019a

2021

2025

(US$ billion) Bangladesh

3.02

8.13

9.76

16.12

0.36

1.23

1.48

2.44

Myanmar

0.27

0.96

1.09

1.78

1.12

0.51

0.57

0.93

Sri Lanka

3.31

4.23

4.80

7.30

0.52

0.99

1.13

1.72

Thailand

2.14

4.33

5.06

6.98

3.95

7.04

8.22

11.35

Bhutan

0.16

0.69

0.81

1.12

0.19

0.25

0.29

0.40

Nepal BIMSTEC

1.91

7.10

8.52

12.26

0.51

0.65

0.78

1.12

10.82

25.45

30.05

45.56

6.64

10.67

12.47

17.95

India’s exports to and imports from BIMSTEC countries for 2021 and 2025 Note The forecast for the year 2021 is based on the IMF forecasted GDP growth rate. For the year 2025, we assume the growth rate of GDP for India would be at 7%, and for other BIMSTEC countries, it would vary between 4 and 6% based on average of last five years of GDP a Actual export Source Author’s own Export

70

Import

Total 63.60

60

53.34 49.23

US$ billion

50 36.12

40

35.29

45.60 36.77

30.49

30

25.45

20 10.8

10

22.17

17.4 10.67 6.6

13.94

16.57

18.00

2022

2025

8.33

0 2010

2019

2020

2021

Fig. 15.2 Trade forecast based on gravity model. India’s exports to and imports from BIMSTEC for 2025. Note The forecast for the year 2025 is based on the IMF forecasted GDP growth rate. For the year 2025, we assume the growth rate of GDP for India would be at 7%, and for other BIMSTEC countries, it would vary between 4 and 6% based on average of last five years of GDP. Data for 2010, 2019, 2020, 2021 and 2022 are actual exports. Source Author’s own

secure implementation of the vaccines and manage the post-vaccination complications or emergencies.3 BIMSTEC Secretariat, for example, has a strong role to play in managing the Coronavirus pandemic including distribution of COVID-19 vaccines and following up the progress and emergency. The need for a stronger regional body is, thus, important not only for securing smooth coordination but also 3

However, Kurian (2020) has nicely outlined a set of recommendations to strengthen the cooperation in health sector in BIMSTEC.

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overcoming the barriers while supplying the vaccine across the region. Therefore, BIMSTEC Foreign Ministers have rightly agreed to leverage regional cooperation through BIMSTEC process in order to combat the adverse effects of the pandemic (BIMSTEC Secretariat, 2020, September 2). Pandemic and Regional Cooperation in Bay of Bengal Region: Although BIMSTEC made its humble beginning in the year 1997, till recently, it was a low profile regional bloc and there are many reasons for this under-achievement (De, 2020; Basu & Ghosh, 2020; ORF, 2020). Nevertheless, one can see a rejuvenated momentum to the BIMSTEC process at present due mainly to political directions as it has received at the BRICS-BIMSTEC Outreach Summit, held at Goa in 2016. The 4th BIMSTEC Summit, held at Kathmandu in 2018, has recommended three key measures: (i) strengthening BIMSTEC Secretariat; (ii) activating the BIMSTEC institutions and (iii) setting up BIMSTEC Development Fund. Substantial progress has been made thereafter in terms of taking steps to energize the BIMSTEC integration. Recently, the regional cooperation in the Bay of Bengal has received further momentum during the current pandemic period. The Bay of Bengal countries have pledged to fight off the Coronavirus pandemic together.4 Following supporting developments in the last few years and in recent months add high value to the integration process in BIMSTEC and provide further support to its integration process. First, BIMSTEC has a permanent secretariat at Dhaka with a Secretary General as its Head. Under the guidance of Secretary General, a professional team is now driving the BIMSTEC regional cooperation programme. Second, BIMSEC member countries have implemented the BIMSTEC Charter and rationalization of sectors and subsectors.5 Third, member countries are motivated to speed up the cooperation to deal with the post-pandemic challenges, both within and across the region. Some of the BIMSTEC countries have set up the COVID-19 Special Fund under SAARC and undertaken joint efforts to coordinate the regional programmes. Fourth, BIMSTEC has completed the Master Plan for BIMSTEC Connectivity, which is expected to received endorsement of BIMSTEC leaders at the 5th BIMSTEC Summit. Fifth, BIMSTEC Foreign Secretaries at 21st session of the BIMSTEC Senior Officials’ Meeting (SOM), held on 2 September 2020, finalized some important legal instruments including BIMSTEC Convention on Mutual Legal Assistance in Criminal Matters; Memorandum of Association on the Establishment of BIMSTEC Technology Transfer Facility (TTF) in Colombo, Sri Lanka; BIMSTEC Charter and Memorandum of Understanding (MoU) on Mutual Cooperation between Diplomatic Academies/Training Institutions of BIMSTEC member states. These legal instruments were signed at the 5th BIMSTEC Summit. 4

Refer, the BIMSTEC leaders’ messages delivered on 23rd establishment year of BIMSTEC on 6 June 2020, available at https://bimstec.org/?page_id=3537 Also, read the Keynote Address delivered by the Secretary (East), MEA at the5th BNPTT Meeting, 2020 (Das, 2020). 5 At the moment, there are 14 sectors in BIMSTEC, and some of the member countries have suggested reducing the number of sectors to just 5. Appendix 2 presents the list of current sectors of cooperation.

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Sixth, BIMSTEC countries are presently negotiating (i) BIMSTEC Coastal Shipping Agreement; and (ii) BIMSTEC Motor Vehicle Agreement. Seventh, BIMSTEC Foreign Secretaries at 21st Session of the BIMSTEC Senior Officials’ Meeting (SOM), held on 2 September 2020, also approved the Memorandum of Understanding (MoU) between the BIMSTEC Secretariat and the Asian Development Bank for enlisting greater project support in the region. Recent months have shown increasing awareness of the opportunities offered through stronger regional cooperation in BIMSTEC. The responses to the Coronavirus pandemic suggest a greater scope of regional cooperation among the countries in the Bay of Bengal region (see also Islam, 2020).

5th BIMSTEC Summit The 5th BIMSTEC Summit was held on 30 March 2022 in Colombo, Sri Lanka. The Summit adopted the BIMSTEC Charter for the first time, since its inception in 1997, and signed three Memorandums of Understanding (MoUs) on the BIMSTEC Convention on Mutual Legal Assistance in Criminal Matters, Mutual Cooperation between Diplomatic Academics/Training Institutions of the BIMSTEC Member States and Establishment of BIMSTEC Technology Transfer Facility in Colombo, Sri Lanka. According to the newly adopted BIMSTEC Charter, the Summit will take place every after two years and the meeting of the Foreign Ministers of the BIMSTEC member states will take place each year. BIMSTEC took 25 years to set in place a Charter for the regional block, compared to ASEAN which took almost 46 years for the same. With the Charter in place, the leaders are now committed to promote the BIMSTEC Partnership guided by the fundamental principles, shared values and norms that have steered the relations since its establishment in 1997. Though the progress in regional integration in the BIMSTEC, even after the 25 years, has remained slow, the successful implementation of the agreements of the 5th Summit can pave the way for the hugely aspired greater integration in the Bay of Bengal region. BIMSTEC provides a unique opportunity for its members from South Asia and South East Asia to collaborate for mutual benefit. By global standards, BIMSTEC, which was founded in 1997, is a relatively new regional organization. Its seven members come from a variety of geographical, historical, cultural and developmental backgrounds. BIMSTEC members account for around 22% of the world’s population and 4% of world GDP, demonstrating its considerable potential. Its members have proceeded gradually and carefully to build the institution and foster regional cooperation in a step-by-step manner. In 2014, for example, a permanent secretariat was formed in Dhaka, led by a secretary-general and staffed by seven country directors appointed by the members. Several key areas for collaboration were identified and recently consolidated into seven major themes, and some BIMSTEC centres were set up on priority subjects for the region.

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The COVID-19 pandemic, followed by the Russia-Ukraine conflict, has drastically altered the global economy’s recovery prospects. The global economy is about to enter a new, more uncertain period marked by increased geopolitical, economic and pandemic threats. Many countries in South and South East Asia, particularly small countries, are extremely vulnerable to these threats and face a bleak future of slower growth, limited market opportunities, rising inflation and increased poverty. South Asia looking east and South East Asia looking west offers a pathway to mitigate multiple risks and exploit opportunities for trade-led growth in Asia, a potential that remains largely untapped. International experience suggests that effective regional governance is necessary for economic development and achieving a peace dividend. More has to be done, however, to build on these achievements and position BIMSTEC as an effective organization tuned to the needs of the new and emerging more uncertain era. For a start, there is the long-standing unfinished agenda of concluding a BIMSTEC Free Trade Area (FTA) which has been under negotiation since 2004. A comprehensive BIMSTEC FTA can help to reduce barriers to trade and investment and assist the business to join global supply chains. At the 5th Summit, all the heads of the BIMSTEC Governments/States expressed a strong desire to conclude the BIMSTEC FTA negotiation. Therefore, we must bring the BIMSTEC FTA to a successful conclusion within a reasonable time. The region displays significant complementarity between the members which bodes well for mutually beneficial trade. The foundation of BIMSTEC’s economic growth has been the rules-based open multilateral trading system. Along with it, the FDI must move freely in the region if we want to promote national growth as well as the regional and global value chains. The 5th Summit also highlighted the importance of energy connectivity, transport connectivity, digital connectivity and people to people connectivity. The 14 areas of cooperation envisaged earlier have now been restructured into seven areas. India will be looking after the security component, whereas Thailand is now in-charge of connectivity. Thailand being the current chair of BIMSTEC till 2024 has a big challenge to run the show as well as implement connectivity related activities. The current Master Plan identifies 141 “flagship” projects to enhance connectivity in the Bay of Bengal region at an estimated cost of US$47 billion. Seamless sustainable multimodal transport links and synergy with other connectivity frameworks like the ASEAN Master Plan on Connectivity 2025 are what the BIMSTEC needs in the postCOVID era. Improving trade facilitation can also speed up the BIMSTEC integration process. Accordingly, moving to a regional single window in customs and a paperless trade regime can help to reduce trade costs and facilitate cross-border business. In fact, Indian Prime Minister in his speech has called for high level trade facilitation arrangement for the region. Nonetheless, significant work is needed to prepare BIMSTEC members to embrace the potential of the fast-moving digital economy. This means investment in digital technologies and related infrastructure, a business-friendly regulatory approach to e-commerce and investing in digital skills. Promoting greater gender

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equality in education and the workplace for women to have the same opportunities and are paid the same as men for equal work. It will foster jobs, income and entrepreneurship across BIMSTEC countries. Maritime cooperation is key to safe and secure trade. Bay of Bengal countries together shall work for maritime safety and security at the sea in cases of search and rescue, humanitarian assistance, coastal surveillance, among others. Regional cooperation in maritime connectivity will ease the constraints to trade and investment. At the 5th BIMSTEC Summit and pre-Summit consultations, importance of maritime connectivity felt all across the countries while working together towards achieving SDG 14 targets and ensuring a “good order at sea”. BIMSTEC countries not only differ in their size, geography, population, resource endowment and level of development, they also vary in financial resources, technical skills and development capacity. Most of the members face such constraints that may be further exacerbated for those who are slated to graduate from the group of least developed countries by 2026. In the spirit of solidarity and common purpose, the more advanced members must support the less developed ones so that the benefits of regional integration are spread among all the members. Fulfilling the economic promise of the BIMSTEC Charter and the proposed development agenda under the “new normal” may not be achieved without empowering BIMSTEC Secretariat. The Secretariat needs to be adequately resourced and be given sufficient delegated powers to fulfil its role as a coordinator of activities across BIMSTEC members. BIMSTEC Secretariat has been entrusted to come out with the Plans of Action (POA) for the region in view of reorganization of priority areas of cooperation. It is very encouraging that the Indian Prime Minister announced during the 5th Summit that India would provide US$1 million to BIMSTEC Secretariat to increase its operational budget. Other member countries may also come forward. With the increased resources, there is now a need to develop a roadmap for the capacity building of the BIMSTEC Secretariat. Finally, efforts to overhaul the integration process in the BIMSTEC region require normative dialogues about the desirable and substantive form of regional architecture in this region. While the 5th Summit has received a strong political will, it is now the task of the Secretariat to run the BIMSTEC wheel forward.

Post-COVID-19 Challenges and Regional Cooperation Contours The COVID-19 pandemic has imposed three major calls to overcome the current challenges: first, stronger regional cooperation in the public health sector and related services; second, enhanced trade facilitation to augment supply chain resiliency; and third, restore growth in the economy. Exhibit 15.2 illustrates some of the priorities and opportunities for the region. The key message is that measures to mitigate COVID-19related challenges must reduce the costs of the pandemic in the region. The responses

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Exhibit 15.2 Priorities and opportunities in the Bay of Bengal Priorities

Opportunities

• Check the economic loss of the region, bring • Connectivity-driven integration: BIMSTEC back growth and ensure resilient recovery Master Plan of Connectivity, BIMSTEC coastal shipping agreement, BIMSTEC trade • Promote trade, investment, tourism, etc. facilitation agreement, BIMSTEC MVA, etc. • Complete the ongoing negotiations (e.g. • People-centric development partnership, BIMSTEC coastal shipping agreement) value chains, comprehensive economic • Encourage cooperation in Industry 4.0, partnership, areas of cooperation—health, public health, disaster management, climate renewable energy, e-commerce, etc. change, etc. • Logistics and supply chain management • Digital economy • Energy cooperation • New technology: S&T cooperation Source Drawn by author

to the pandemic suggest a greater scope of regional cooperation among the countries in the Bay of Bengal region with particular reference to Sustainable Development Goals (SDGs) (De, 2021a, 2021b; Basu Ray Chaudhury, 2021).

Public Health National public health strategy in the Bay of Bengal countries has primarily focused on containing the COVID-19 infection. The region has witnessed a unified response to COVID-19 pandemic. From the huge Coronavirus management, the Bay of Bengal countries are now busy in securing vaccines and protecting the supply chains. Barring India, remaining BIMSTEC countries do not have the required capability to manufacture sophisticated vaccines and related drugs and medical formulations. For natural reasons, India could become the vaccine hub for the entire Bay of Bengal region and beyond. The Bay of Bengal countries should give renewed focus to public health management and epidemiology research and training. Collective action in public health will pave the way in effectively controlling the virus within and beyond boundaries. What can be done jointly and regionally? First and foremost, countries have to reach a consensus on a protocol concerning health security coordination and cooperation mechanisms in the Bay of Bengal region. Second, countries need to strengthen and empower the BIMSTEC Secretariat to draw a regional plan and a strategy for public health management, followed by on-time endorsements of member countries. Third, the Bay of Bengal countries could set up a BIMSTEC COVID-19 Fund (BCF) under the supervision of the BIMSTEC Secretariat. The modus operandi of the BCF can be discussed and agreed upon through mutual consultation. The Fund may encourage research projects aiming to diagnostics, vaccines and therapeutics for not

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only COVID-19 virus but also similar or other viral contamination. Thailand being the current chair of Public Health in BIMSTEC may lead the discussion. In parallel, a Bay of Bengal-wide R&D Blueprint may be taken up. The Blueprint should aim to improve intercountry coordination, develop new protocols and SOPs, among others. Fourth, a network of BIMSTEC Epidemiologists and Scientists may be set up to promote exchange of scholars, research findings and innovation. Besides, it could organize regional-level seminars and workshops, leading to strengthening the regional knowledge pool and resources. ASEAN offers many important lessons to the Bay of Bengal region. For example, as noted in Djalante et al (2020), ASEAN’s policy approach to beat epidemics has been grounded on its unique and pragmatic networks in what is so-called as the ASEAN Plus Three (APT) (including China, Japan and South Korea) for regional disease surveillance mechanisms, which has developed a Protocol for Communication and Information Sharing on Emerging Infectious Diseases, with a standardized Protocol for Communication and Information Sharing on Emerging Infectious Diseases that encourages member states to report all cases of diseases that are categorized as a Public Health Emergency of International Concern (PHEIC). For example, past programmes include the cooperation of Disaster Safety of Health Facilities and the ASEAN + 3 Field Epidemiology Training Network as well as the ASEAN Regional Public Health Laboratories Network (RPHL) through the Global Health Security Agenda platform. However, it is not clear how such networks contribute to effective policymaking during the storm of COVID-19. Appendix 3 presents the list of ASEAN’s responses to COVID-19. ASEAN experience recommends that the Bay of Bengal countries may consider setting up a senior officers’ level interaction for public health development mechanism responding to COVID-19.

Enhanced Trade Facilitation and Regional Connectivity Logistics support is pivotal to the success of immunization services across the region. Only high-quality logistics can help countries to gain from COVID-19 preparedness in terms of faster and adequate supply of high-quality vaccines and immunizationrelated materials across the border. The key areas of logistics support include vaccine management and monitoring, cold chain management and immunization safety, among others (WHO, 2020). In particular, multimodal connectivity in combination of air and land transportation is critical to the supply of COVID-19 vaccines from India to remaining Bay of Bengal countries. Here, trade facilitation measures such as simplification of customs procedures, zero duty on medical products and services and mutual recognition of standards will be important to further build up and strengthen the supply chain in the region. Besides, in the post-COVID-19 period, the Bay of Bengal countries should expedite the conclusion of the pending BIMSTEC FTA and Customs Cooperation Agreement, which would ensure increased trade within the region. Therefore, enhanced trade facilitation coupled with supply chain resilience

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can only ensure an effective supply of vaccine on time and at a low cost across the region. Regional connectivity is at the core of BIMSTEC cooperation. BIMSTEC Secretariat and the ADB have developed the BIMSTEC Transport Connectivity Master Plan. This grand plan presents the transportation vision for seamless connectivity surrounding the Bay of Bengal region and beyond. It has identified 261 projects for construction, expansion and modernization of existing transport infrastructure involving an estimated cost of US$120 billion. Connectivity matters a lot to the Bay of Bengal region (Yhome, 2017). Achievement in coastal shipping between India and Bangladesh is phenomenal. Completion of BIMSTEC Coastal Shipping Agreement will pave the way for seamless movement of cargo and passenger vessels in the Bay of Bengal. Abolition (partial or full) of Cabotage among BIMSTEC countries will play the much desired catalytic role in promoting trade and connectivity. Trilateral Highway is getting ready, thereby would lead to connect the BIMSTEC overland. Bangladesh has shown interest to join the TH project. Bangladesh has completed the construction of Padma Bridge, which has facilitated the trade and transportation. Bhutan and Nepal are already well connected with BIMSTEC, but require capacity augmentation. Border infrastructure and connectivity is another area that needs drastic reforms and development. Early completion of BIMSTEC Motor Vehicle Agreement (MVA) will add huge momentum to the BIMSTEC economic connectivity. Next, rail and digital connectivity have immense potential to enhance the trade in the region and beyond. BIMSTEC countries may negotiate a BIMSTEC Railway Agreement. Along with it, a regional air transportation agreement in cargo and passenger services will promote faster mobility of goods and services like tourism, health and education. Maritime connectivity in BIMSTEC is another area which requires our utmost attention. Almost 25 ports are active in the Bay of Bengal, and BIMSTEC is yet to have a network of ports. A regional network of ports in the Bay of Bengal is essential to share vital information, undertake training and capacity building and work together to deal with common challenges, particularly in the post-COVID-19 period. A stronger network may be helpful to share best practices and for the purpose of better coordination. Another golden opportunity in the post-COVID-19 is exchange of energy. Quality of electricity is critical to supply of vaccines and medicines. BIMSTEC Secretariat is now planning to complete a BIMSTEC Grid Interconnection Master Plan Study to establish a regional electricity grid to facilitate energy trade. Bay of Bengal countries also need development partner like Japan who can provide the investment, technology and infrastructure.

Concluding Remarks The BIMSTEC countries look at BIMSTEC as a tool for development, and the effectiveness of this tool needs to be reassessed in the post-COVID-19 period. The foregoing discussion tells us that regional integration can lead to substantial economic

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gains in the BIMSTEC region, particularly in the post-pandemic phase. In other words, regional integration in the BIMSTEC can be a building block for global integration. However, the benefits of the regionalism are likely to depend on the integration spirit of the BIMSTEC countries. This article postulates the next round of the integration of the BIMSTEC region at a time when Coronavirus-driven pandemic and its successive rounds are appeared as a common enemy to the entire region. This article argues that the regional cooperation could help in reducing the costs of pandemic-driven barriers. The responses to the current global uncertainties also suggest a greater scope of regional cooperation among the countries in the BIMSTEC region. Regional integration may help the BIMSTEC countries overcome divisions that impede the flow of trade in goods and services, people and ideas, particularly when all members have been facing a common challenge to beat the Coronavirus pandemic. Thailand, the current Chair of BIMSTEC, is going to host the 6th BIMSTEC Summit in 2023. Till that time, BIMSTEC countries must keep on adding further momentum to regional cooperation and integration in Bay of Bengal region.

References Basu, P., & Ghosh, N. (2020). Breathing new life into BIMSTEC: Challenges and imperatives. ORF Occasional Paper # 243. Observer Research Foundation (ORF). Basu Ray Chaudhury, A. (Ed.). (2021). BIMSTEC in 2021. Observer Research Foundation (ORF). BIMSTEC Secretariat. (2020, September 2). Press Release. https://bimstec.org/?page_id=3204 Das, R. Ganguly. (2020). Keynote Address delivered at the 5th BNPTT Meeting held on 21–22 2020, December 21–22. Organized by the Research and Information System for Developing Countries (RIS). De, P. (Ed.). (2020). Twenty years of BIMSTEC: promoting regional cooperation and integration in the Bay of Bengal Region. Routledge. De, P. (2021a). Role of infrastructure in promoting SDG 9 in India’s Northeast. In N. Ghish (Ed.), Post-pandemic development priorities: The decade of action. Observer Research Foundation (ORF). De, P. (2021b). The BIMSTEC moment. In A. Basu Ray Chaudhury (Ed.), BIMSTEC in 2021b. Observer Research Foundation (ORF). Djalante, R., Nurhidayah, L., Hoang Van Minh, H. V., Nguyen Thi Ngoc Phuong, N. Thi Ngoc, Mahendradhata, Y., Trias, A., Lassa, J., & Michelle, M. A. (2020). COVID-19 and ASEAN responses: Comparative policy analysis. Progress in Disaster Science, 8. https://doi.org/10. 1016/j.pdisas.2020.100129 IMF. (2020). World Economic Outlook: October 2020. International Monetary Fund (IMF). Islam, S. (2020). BIMSTEC to stay course in post-COVID-19 era. Bdnews24.com, 6 June. https:// opinion.bdnews24.com/2020/06/06/bimstec-to-stay-course-in-post-covid-19-era/ Kurian, O. C. (2020). In the shadow of COVID19: Reimagining BIMSTEC’s health futures. Observer Research Foundation (ORF). https://www.orfonline.org/research/in-the-shadow-ofcovid19-reimagining-bimstecs-health-futures/#_ednref20 ORF. (2020). A Report on Kolkata Colloquium 2019: Reimagining BIMSTEC. Observer Research Foundation (ORF). WHO. (2020). Immunization supply chain and logistics. World Health Organization (WHO).

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Yhome, K. (2017). BIMSTEC: Rediscovering old routes to connectivity. ORF Issue Brief , 213. Observer Research Foundation (ORF).