Can India deliver in South-East Asia?

India cannot afford the luxury of inaction if it wants to preserve credibility in East and South-East Asia

Prime Minister Narendra Modi’s visit to Malaysia and Singapore has once again focused the attention of Indian diplomacy on a region that is not only a hub of economic growth and prosperity in Asia, but is also critical for global stability against the backdrop of China’s rise. While trade and investment remain central to India’s outreach to South-East Asia, the larger strategic context should not be lost sight of as India engages with the region. India has been building strategic partnerships with Malaysia and Singapore, but New Delhi needs to engage with the region as a whole more substantively.

New Delhi, which so often likes to sit on the margins and avoid taking sides, must assume it can no longer afford the luxury of inaction if it wants to preserve credibility as a significant actor in both East and South-East Asia. New Delhi has an ambition to expand its footprint in the region, which has so far been viewed as outside India’s core interests. At a time when China’s bullying behaviour has been evident in its actions and pronouncements, India should be doing more to signal that it is ready to emerge as a serious balancer in the region. The regional states have often complained about Indian diffidence and its lack of seriousness. The Modi government is more serious than its predecessor, though it remains far from clear if it is well-prepared to challenge China on its own turf.

India is wading into the South China Sea dispute between China and its neighbours by not only calling for “freedom of navigation in international waters, the right of passage and over-flight, unimpeded commerce and access to resources in accordance with recognized principles of international law including the 1982 United Nations Convention on the Law of the Sea”, but also agreeing to cooperate with the US in “safeguarding maritime security and ensuring freedom of navigation and over-flight throughout the region, especially in the South China Sea”. Presenting a contrast to China’s aggressive policies in the South China Sea, India is also showcasing its own maritime dispute with Bangladesh, which it successfully resolved through international arbitration, as an example worth following in the region. Recently, in its joint statement with the Philippines, India referred to the South China Sea as the West Philippine Sea, a term that Manila has been using since the escalation of its maritime dispute with China. Defence cooperation is soaring with regional countries ranging from Japan, Vietnam, the Philippines and Singapore to extra-regional powers such as the US and the UK.

But India needs to do more and move fast. The engagement of East and South-East Asia remains a top foreign policy priority for the Indian leadership. India has been a full dialogue partner of the Association of Southeast Asian Nations (Asean) since 1995, a member of the Asean Regional Forum, the regional security forum, since 1996, and became a founding member of the East Asian Summit launched in December 2005. India is also a summit partner of Asean on par with China, Japan and South Korea since 2002. India has also cultivated extensive economic and trade linkages with various countries in the region, paralleling a gradual strengthening of security ties.

India and Asean marked their 20 years of partnership with a commemorative summit in New Delhi in December 2012. The highlight of the summit was the conclusion of talks on a free trade agreement (FTA) on services and investment, which is expected to increase bilateral trade to $200 billion by 2022 and lead to talks on the Regional Comprehensive Economic Partnership, which also includes Australia, China, Japan, South Korea and New Zealand. India was admitted as a sectoral dialogue partner of Asean in 1992 and went on to become a full-fledged dialogue partner in 1996. There has been a significant increase in India-Asean trade from $42 billion in 2008 to an estimated $100 billion this year. The FTA on goods was signed in 2010 despite some significant opposition in India, and the FTA in services and investments with Asean came into force in July 2015, paving the way for freer movement of professionals and further investment opportunities.

It is time now for India to push for its membership in the Asia-Pacific Economic Cooperation, especially as this is something that India’s partners in the region and beyond are enthusiastic about under a proactive Modi government.

India’s efforts to make itself relevant to the region come at a time of great turmoil in the Asian strategic landscape. Events in recent years have underlined China’s aggressive stance against rivals and US allies in Asia. And there may be more tension to come. With its political and economic rise, Beijing has started trying to dictate the boundaries of acceptable behaviour to its neighbours. As a result, a loose anti-China balancing coalition is emerging. India’s role becomes critical in such an evolving balance of power. As Singapore’s elder statesman Lee Kuan Yew suggested long back, India should be “part of the South-East Asia balance of forces” and “a counterweight (to China) in the Indian Ocean”.

New Delhi needs to assure the regional states of its reliability not only as an economic and political partner, but also as a security provider. As the regional balance of power in Asia changes and as the very coherence of the Asean comes under question, there will be new demands on India. The rapid rise of China in Asia and beyond is the main pivot even as New Delhi seeks to expand economic integration with the region. India is also developing strong security linkages with the region and trying to actively promote and participate in regional and multilateral initiatives. Smaller states in the region are now looking to India to act as a balancer in view of China’s growing influence and America’s anticipated retrenchment from the region in the near future. And larger states see this as an attractive engine for regional growth.

It remains to be seen if India can indeed live up to its full potential, as well as to the region’s expectations.