[Answered]The ‘Act East’ policy has not brought the expected gains for India. Do you agree?

Demand of the question

Introduction. Contextual Introduction.

Body. Discuss progress made under Act East policy. Mention various concerns regarding Act East policy.

Conclusion. Way forward.

India’s Act East policy is an effort of India to cultivate extensive economic and strategic relations with the nations of Southeast Asia. It is the successor of Look East policy and aims to further strengthen India’s relation with East Asia. India’s focus under Act East remains on enhancing economic relations with ASEAN and greater infrastructural connectivity, regional development in northeastern India and foreign direct investment.

Progress made under Act East Policy:

  1. Engagement with ASEAN: ASEAN-India engagement has become deeper and has scaled new heights. India is now the 4th largest trading partner of ASEAN. Southeast Asian countries favour India’s increased involvement to counter China’s expansionist policies in the region. India has allocated $1 billion for promoting connectivity at the India-ASEAN Summit.
  2. Strong relations: with neighbours: India has not only developed strong bilateral relations with countries such as Bangladesh, Mauritius, Myanmar, Sri Lanka, Singapore, Vietnam, etc. but also steering a number of sub-regional programmes and projects such as the BBIN, Myanmar-Thailand Trilateral Highway etc. and is actively contributing to the success of several regional initiatives.
  3. North-East investment: The Act East Policy focuses mainly on the Northeast region. Recently, Japan has shown interest in investing in the North-East. The Government of Japan has decided to invest around Rs 13,000 Crore in several ongoing as well as new projects in different states of India’s North- Eastern region.
  4. Security Engagement: Defence cooperation has increased with East Asian countries. In 2014, India and Vietnam signed a Memorandum of Understanding (MOU) that opened up a line of credit for Vietnam to purchase defense equipment from India. Since 2015, India has carried out joint maritime-law enforcement patrols and military exercises with ASEAN countries.
  5. Far East involvement: Recently, India has reached out to Far East economies especially Russia. India has announced to extend a $1 billion line of credit towards the development of the Russian Far East.This is important as it is an energy rich region and would help India’s economic growth.

Various concerns:

  1. China’s influence: The rising influence of China in Southeast Asia and the Indian Ocean Region poses a direct geopolitical challenge to India. The Act East Policy has been less effective in tackling China’s influence in the region.
  2. Trade deficit with ASEAN: The share of ASEAN in India’s total trade deficit increased from about 7% to 12% during the last Among the 15 RCEP countries, India faces trade deficits with all except Laos, Cambodia, Myanmar and the Philippines. China, accounts for 60% of the total deficit.
  3. RCEP failure: Act East Policy has not been able to garner support of various countries in removing issues regarding RCEP that concerned India. India became the only exception with withdrawal from the regional trade deal due to failure of extensive negotiations regarding Regional Comprehensive Economic Partnership (RCEP).
  4. Limited economic engagement: In contrast to the great progress in the field of defence and security cooperation, important economic agreements signed between India and East Asian countries are rather scarce. So far, India has only signed a memorandum of cooperation on oceans and fisheries with South Korea.

Act East policy is important for Indian economy. It is important that India must come up with a more sincere cooperation policy. To truly integrate into the Asia-Pacific economy, India must cooperate with East Asia and Southeast Asian countries in various fields such as culture, economy and politics. India should take the initiative to seek changes to the current situation. Only cooperation can bring a win-win result.

Print Friendly and PDF