India’s Republic Day celebrations, earlier in January this year, were attended by the heads of state of all 10 ASEAN nations in an unmistakable sign of the growing bonhomie between the two sides.
The ASEAN region has taken a place of pride in India’s Act-East Policy, which aims at New Delhi’s re-engagement with the countries of Southeast and East Asia, where historically it has had influence.
Taken as a whole, ASEAN represents the world’s third largest market, with a combined population of more than 630 million people. As part of the Act-East Policy, India is already building the India-Myanmar-Thailand trilateral highway, which is expected to be completed by 2019, and could well be extended all the way to Vietnam.
At the same time, governments in Northeast India are stepping on the gas as far as economic initiatives in the region are concerned. The Global Investors’ Summit, held in the Northeast state of Assam earlier in February, will go a long way in encouraging foreign companies, including those from ASEAN countries, to invest in this corner of India.
In May 2017, Prime Minister Narendra Modi inaugurated India’s longest bridge, 9.15 kilometers across, over the Brahmaputra river in Assam. Modi has also termed the Northeast as the ”new engine of India’s growth”.
In the not-too-distant future, there is a chance that the Guwahati airport in Assam would be connected to more ASEAN cities. It is already connected to Bangkok, Thailand.
What’s In It for ASEAN?
India is one of the fastest growing major economies in the world. It is also a young country in terms of the median age of its population, thus presenting a huge opportunity for firms from the ASEAN countries.
Engagement with India would also help the ASEAN countries develop an alternative to the Chinese model of investment. Although all ASEAN members have welcomed Beijing’s One Belt One Road (OBOR) initiative, many of them still have reservations about Beijing’s real intentions.
ASEAN countries, like Singapore, are also looking at Northeast India in a new light. Singapore has signed a memorandum of understanding to set up a skills development center in Guwahati. The Assam state government is also inviting ASEAN countries to set up consulates in Guwahati.
Going forward, however, there are quite a few challenges before the India-ASEAN engagement through Northeast India can pick up steam.
One of the major challenges lies in the development of adequate infrastructure, as Northeast India lags behind many other parts of the country in this respect. Then, there is the issue of power supply, as adequate electricity will need to be supplied to new industrial plants when they begin operations.
Meanwhile, trade levels between India and ASEAN members have been much lower than their actual potential. In 2016-2017, ASEAN-India trade stood at only US$71 billion.
Although the number of Indian tourists bound for ASEAN countries has increased, India still only accounts for 3% of tourist arrivals in the ASEAN region. On the other hand, the number of tourists from ASEAN countries to India continues to be dismal.
Overall, trade with India accounts for only 2.6 per cent of ASEAN’s total trade.
India and the ASEAN countries are also discussing the prospect of signing a RCEP or Regional Comprehensive Economic Partnership trade agreement along with a few other countries, which has assumed more significance after the United States pulled out of the Trans-Pacific Partnership.
Possibilities for Cooperation with Japan
Japan has a historical connection with the northeast part of India, dating back to the World War II. Tokyo also has rich experience of working with the ASEAN countries. In light of China’s OBOR initiative, Japan is trying in its own way to increase its influence in the ASEAN region. Tokyo has been involved closely with ASEAN countries like Myanmar, a country which also serves as India’s land-bridge to the ASEAN region. It is in places like Myanmar and Northeast India that India and Japan could effectively pool their resources and expertise.
In recent times, Japan has contributed Official Development Assistance loans for the North East Road Network Connectivity Improvement Project (Phase 1), to the tune of 67.17 billion yen. Japan is also involved in initiatives like the Guwahati water supply scheme and the Nagaland Forest Management Project.
The joint statement signed during the visit of the Japanese Prime Minister Shinzo Abe to India in September 2017 noted that “the two Prime Ministers welcomed the India-Japan cooperation on development of India’s North Eastern Region.”
Hence, Northeast India could not only serve as a bridge between India and the ASEAN countries, but could also be the lynchpin of India’s “Act-East Policy” and Japan’s “Free and Open Indo-Pacific Strategy.”
Dr. Rupakjyoti Borah is with the Institute of South Asian Studies at the National University of Singapore. He was earlier an assistant professor of international relations at Pandit Deendayal Petroleum University in India. He has also been a visiting fellow at the University of Cambridge, the Japan Institute of International Affairs (Tokyo), and the Australian National University. His latest book is The Elephant and the Samurai: Why Japan Can Trust India? The views expressed are personal. He can be reached at firstname.lastname@example.org or via Twitter @rupakj.