By Shivaji Sarkar
It is a leap forward. The Indo-ASEAN Commemorative Summit is projected to pave way for an Asian prominence and double the present level of India’s trade to around $125 billion with the 10 ASEAN countries by 2025.
This is not the only gain. The engagement will be at many stages, right from defence to various levels of economic commitment, beyond the region with Japan, Australia and New Zealand in the wake of India, US, Japan and Australian round of talks on cooperation in the Indo-Pacific region. Indeed, India sees ASEAN as the central pillar for its ‘Act East’ policy.
A significant involvement will be with Philippines, with its President Duterte looking to free itself from the US domination to develop independent ties with both China and India. This shall be a process of reconnecting with East Asia through ASEAN — Indonesia, Singapore, Indonesia, the Philippines, Malaysia, Brunei, Thailand, Cambodia and Vietnam.
The Summit is in continuation of Prime Minister Modi’s plenary address to the global community at the World Economic Forum in Davos and his visit to Manila for the 15th ASEAN-India summit, and the 12th East Asia summit in Manila last November. The present commemorative meet brings India closer with ASEAN as their heads discuss the future of Southeast Asia as well as becomes the bridge with both East and the West paving way for a dynamic world that would have to look more towards Asia for global progress.
Over time, trade with ASEAN has touched $71 billion, 25 times more that what it was at the onset of the relations in 1992. The Summit and bilateral talks held with each of the leaders is likely to help increase business of Indian IT companies and maritime involvement manifold, the latter being very significant. It entrusts the Indian Navy with the task to aid Southeast Asian nations’ resolve to eliminate piracy, as 52 per cent of the world’s piracy takes place in this area.
Notably, the Indian Navy has been actively involved in international efforts to control piracy around Somalia, western parts of Indian Ocean and West Asia. The engagement is strategic and shall give India’s defence sector a big boost. Additionally, it will help speed up international trade, making Indian trade and shipping activities the major beneficiary.
This apart, a major part of the engagement with ASEAN would benefit the North-Eastern parts of the country. The trilateral highway through Myanmar to Bangkok, to be completed by 2019 with huge Indian investments will benefit the Indian construction sector. With many countries increasing infrastructure activities, the highway is likely to emerge as brand India icon to multiply the demand for building infrastructure and related activities. In the coming year, it could even replace the Gulf as a job destination for Indian techies.
Both the International Monetary Fund and World Bank see Malaysia, Indonesia and Thailand having large economic potential and fast growing economies. Apart from multilateral relations with these countries, India also has bilateral ties. Thus, while these countries would have direct trade with India, it would also help in multilateral action.
It’s no secret that the ASEAN engagement is in the backdrop of an increasingly aggressive China, triggering insecurities among its neighbours, with Beijing’s claims to almost 80 per cent of the resource-rich South China Sea (SCS). At least four nations– Vietnam, Malaysia, Brunei and the Philippines — are party to territorial disputes with China. And, Singapore and Vietnam have repeatedly urged India to increase its security profile in Southeast Asia. New Delhi’s recent tough stand with China at Doklam has raised its potential further.
This apart, the present range of talks moved around implementation of various projects in the field of agriculture, science and technology, space, environment, human resource, capacity building, tourism and connectivity. From ASEAN, the Philippines has particularly witnessed a steep rise in services trade, as a result of which several Indian companies in the past few years have opened offices in Manila in IT-enabled and R&D services. Importantly, Philippines is also keen on having an Aadhaar-based system and is looking for Indian assistance.
The rare mention of “countering cross-border terror” by Modi at the plenary session reflects ASEAN’s need and vision for peace and prosperity, through a rule-based order for oceans and seas. This was critical, as both ASEAN and India reaffirmed the importance of ensuring freedom of navigation and over flight in the region, other lawful uses of the seas and unimpeded lawful maritime commerce as well as to promote peaceful resolution of disputes. All these are in fact virtually in the context of the SCS.
A free SCS and Strait of Malacca is necessary not only for the larger interest of the region but for a fruitful engagement with India and trade across Asia. While India has free trade agreements with the 10 countries, its trade has been growing at a pace of 10 per cent–less than deserving. ASEAN is keen it increases and insists on the Regional Comprehensive Economic Partnership (RCEP), which has been on the table for some time. In fact, both the Indonesian President Joko Widodo and Singapore Prime Minister Lee Hsien Loong are keen this partnership is signed this year itself.
The RCEP is a FTA involving ASEAN nations and India, Australia, New Zealand, South Korea, China and Japan. While ASEAN demands tariff cuts, India is wary as it is building its indigenous manufacturing sector. This apart, India has serious apprehension that it would lead to flooding of its markets with Chinese goods, which will have an adverse economic impact on the country, other than getting politically untenable.
However, Singapore is insistent as it feels this would create an integrated Asian market comprising half the world’s population, and a third of the GDP. In official circles, the ASEAN demand for RCEP and inclusion of China creates an uncanny feeling and therefore there may be more negotiations. Ideally, India would perhaps be more forthcoming with China’s exclusion.
Notwithstanding the hiccups, the ASEAN nations are eager to strengthen bilateral ties. Closer cooperation in the energy sector, power, oil and gas exploration is one such possibility with Vietnam. Other feasible areas are nuclear energy and mineral exploration. In the long run, the Summit is likely to create an India aspirational spot in the neighbourhood. — INFA