India takes fight to China via SEAsia

In what has been described as “the most significant exposition of its ‘Act East’ policy,” India invited Southeast Asian heads of state as its chief guests during its recent 69th Republic Day parade.

The Commemorative Summit, held on January 25 and themed “Shared values, Common Destiny”, arguably marked the arrival of India as a major force in the broader Indo-Pacific theater.

The event was held against the backdrop of a revived and still emerging India, United States, Japan and Australia “quadrilateral” strategic arrangement aimed at counterbalancing China’s ambitions in the region.

Under its “Act East” policy, previously known as “Look East”, India has recently doubled down on its trade, investment and strategic relations with East and Southeast Asia, home to some of the world’s most dynamic economies and source of the natural resources, technology and markets needed to fuel its own fast growth.

The rise of China and perceived threats to India’s interests has reinforced New Delhi’s hopes of deepening its cooperation with key regional actors, including the Association of Southeast Asian Nations (Asean).

Certain Southeast Asian countries have gradually come to embrace India as a major trading partner and a potential counterbalancing force for stability in the region. China’s rising assertiveness, including in the contested South China Sea, served as backdrop for the recent India-hosted summit.

The pageantry of the summit, which saw the attendance of 11 heads of state and government, underlined the diplomatic uptrend. Both sides celebrated 25 years of dialogue partnership, 15 years of summit level interaction, and five years of strategic partnership.

The event was attended by all Southeast Asian leaders, including those with the hottest claims vis-a-vis China in the South China Sea, namely Philippine President Rodrigo Duterte and Vietnamese Prime Minister Nguyen Xuan Phuc. Singapore Prime Minister Lee Hsien Loong, this year’s Asean rotating chairman, was also in attendance.

As expected, trade and maritime security issues dominated the agenda. At the same time, India’s business-oriented and nationalist Prime Minister Narendra Modi deftly leveraged the event to project himself as a global and regional statesman.

The economic stakes are high. Over the past year, India’s trade with Asean expanded by 10%, rising from US$65.1 billion to US$71.6 billion. While a positive uptrend, the numbers still pale in comparison to China’s US$452.31 billion in trade with Asean countries in 2016.

The Modi administration is intent on expanding trade and investment relations with booming Southeast Asia, which is moving towards greater economic integration with the hope of creating a common market within a decade.

India is also interested in engaging and influencing the direction of negotiations of Asean-led initiatives, namely the Regional Comprehensive Economic Partnership (RCEP) free trade agreement.

The Indian leader also sought to enhance into underdeveloped bilateral relations across Southeast Asia. In particular, Modi held cordial exchanges with Filipino leader Duterte, who likewise called for deeper economic ties between the two countries.

The Philippines and India discussed US$1.25 billion worth of bilateral investment pledges, largely in the area of energy, transportation, pharmaceutical industries and information technology which are expected to create as many as 10,000 jobs.

Yet, maritime security issues were also a key theme during the summit, with particular focus on China’s rising naval and territorial assertiveness in the Pacific and Indian Oceans.

During his speech before Asean heads of state, Modi identified “humanitarian and disaster relief efforts, security cooperation and freedom of navigation” as key areas for maritime cooperation.

During the “retreat” segment of the summit, the leaders held off-the-record discussions which addressed maritime security issues, according to sources familiar with the talks.

Maritime security issues were highly prominent in the joint India-Asean statement, dubbed as the “Delhi Declaration.” Both sides reaffirmed their commitment to, “maintaining and promoting peace, stability, maritime safety and security, freedom of navigation and overflight in the region, and other lawful uses of the seas.”

They emphasized the necessity for protecting “unimpeded lawful maritime commerce”, while “promot[ing] peaceful resolutions of disputes” in accordance to international law.

In a clear reference to China’s disputes with Southeast Asian claimant states, the declaration also called for “full and effective implementation of the Declaration on the Conduct of the Parties in the South China Sea (DoC)” as well as “early conclusion of the Code of Conduct in the South China Sea (CoC).”

The summit underlined India’s burgeoning interest in the South China Sea, through which the bulk of India’s trade and energy passes, not to mention major energy investment deals, particularly with Vietnam.

Perturbed by China’s expanding footprint in the Indian Ocean and rising tensions in disputed India-China borderlands in the Himalayas, the Modi administration appears to be taking the fight to China via stronger cooperation with Asean.

Yet, as Indian experts such as Abhijit Singh have warned, it’s important that both sides effectively manage their expectations lest they set themselves up for strategic disappointment.

They note bilateral India-Asean relations are, in many ways, still in their developmental stages, especially when compared to the bloc’s more robust relations with China, Japan and the United States. For instance, both sides are yet to discuss joint naval exercises, nor were there indications of a major boost to bilateral investment deals.

What is clear, however, is that India is emerging as a key strategic partner for Asean at a time several of its leading states are keen to diversify the region’s rising dependence on an increasingly assertive China. Shared concerns over China’s rise are fast becoming the glue which is bringing India and Asean closer and closer together.