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Address by Foreign Secretary at East West Centre Conference (September 09, 2016)

September 09, 2016

  • I am delighted to join you all this morning and share my views on the conference theme of "South Asia Looking East”. In many ways, this has been the great change in my four decades as an Indian diplomat. Having served in Japan, Singapore and China, I have some advantage of developing insights from field experience. In my view, the strategic implications of the eastward interface of the Indian sub-continent are still unfolding. Earlier in slower motion, its quickening pace now certainly elicits greater attention. I complement the organisers for focusing on this subject and am confident you will have an animated discussion.
  • "Looking East”, you are all aware, is a vector that evolved into a metaphor. It has a particular connotation with reference to India, one that developed over a quarter of a century. Initially, it started out as an expression of India’s opening out to the world after decades of relatively autarkic growth. Because our early partnerships in the 1990s were with members of the ASEAN, it then acquired a specific meaning as developing ties with them and learning from their experiences. The CECA with Singapore was, in many ways, a watershed. That then encouraged other bilateral and regional agreements. In due course, efforts were made to establish more connectivity with that region – physical, virtual as well as its softer incarnation. Progress made in engagement with ASEAN was also reflected in India’s participation in ASEAN-centric forums like the ARF, EAS, ADMM Plus, etc. An agenda of trade, investment and economic changes grew into a larger strategic engagement.
  • It also then went beyond ASEAN to cover Japan, Republic of Korea, and China. With the first two, India concluded CEPA while with China, trade expanded dramatically even though its lack of balance emerged as an increasing concern. In recent years, this outreach has extended to Australia and the Pacific Islands. As a result, India’s foreign policy acquired a footprint as well as a dimension that it did not have earlier. The profundity of this change is underlined by the larger mind space that the world to India’s east now occupies when it comes to economics, technology, security, strategy or even culture.
  • While this assessment reflects an embedded perception in India, what is perhaps less adequately realised is the extent to which the pull – or push – towards the east is making us go back to our roots. One important long-term manifestation of this is the revival of India’s eastern seaboard. Suppressed during the colonial period since it faced the wrong direction, its natural advantages are today being rediscovered. In the last decade, that started out as an entrepreneurial activity responding to the growing trade with the east. Today, it is a structured high-priority government supported agenda that has significant implications for the hinterland economy. The SAGARMALA programme covers port modernisation, port connectivity improvement, port-led industrial development and coastal community development. Its goal is to increase coastal shipping five-fold, transform inland waterways and create the maritime logistics that would be required by a more industrialised India. Development on the east coast holds a real potential for the structural re-orientation of the Indian economy and society. Its significance certainly needs greater debate and deliberation.
  • There is also a broad recognition that physical connectivity to the east offers game-changing possibilities not only for our relationship with the ASEAN, but also to the economic future of India’s North-Eastern and Eastern states. Consequently, higher priority is being accorded to key infrastructure projects with Myanmar that could accomplish this objective, including the Kaladan multi-modal transport project that links to Sittwe Port, and the completion of the Trilateral Highway that would extend to Thailand. Recent visits to Indo-China have also underlined the interest of CMLV nations in further road connectivity to Vietnam.
  • The conclusion of the land boundary agreement between India and Bangladesh has also created a positive environment in which the two countries can take forward an ambitious agenda of rail and road connectivity, inland waterways, coastal shipping and energy cooperation. This marked upswing in ties holds a potential for India’s interface vis-a-vis the east to broaden out more considerably. In fact, it now creates a climate in the Bay of Bengal for more regional initiatives that could be taken forward by a grouping like BIMSTEC. That India is moving in parallel on development projects with Indian Ocean island and littoral neighbours will also be helpful in this endeavour.
  • Since India’s current connectivity to the east is largely maritime, it is only appropriate that we consider the relevance of our activities in the South to the task of "Acting East”. Maritime traditions in this country may have developed fairly continuously and organically. But there is no doubt that a stronger engagement with ASEAN has given it a new impetus in recent years. In fact, it is expanding horizons that provided the driving force which has allowed India to emerge as a net security provider and a first responder to HADR situations in the Indian Ocean. This trend is likely to not only continue but actually grow in the foreseeable future for two reasons. One, India’s own economic capacities are expanding and could well make a quantum jump as its "Make in India” initiative takes off. Both demand and supply centred on India can be safely predicted to increase as a consequence. Two, the larger rebalancing of the global economy in the direction of Asia is also set to enhance the importance of Indian Ocean as an economic highway. Being located at its centre of gravity, India’s responsibilities towards safe and unimpeded flow of commerce grow commensurately in an era of greater burden sharing. It is likely that this role would itself become an additional binding force between India and its eastern partners, who are directly benefitted by a safer ocean.
  • ASEAN remains very much at the core of India’s vision looking eastwards. In the last decade, commerce has grown ten-fold to the US$70 billion level and it accounts for roughly 10% of India’s global trade. It has also been very active investment relationship both ways. Bilateral relationships with all its constituent states have developed in a robust manner. We are also engaging ASEAN collectively through digital and physical connectivity projects, space technology initiatives, capacity building, including in information technology and a broad range of tele-based and quick impact projects with the CMLV group. Political and security cooperation with ASEAN members has expanded steadily. This is a region where we have high cultural comfort. Overall, India values highly the contribution made by ASEAN to the evolution of regional cooperation initiatives in Asia. We believe that the cohesion of ASEAN strengthens regional stability and look forward to our continued engagement with that grouping.
  • The direction of our ties with Vietnam, a recent example of that interaction, is illustrative of the progress that South Asia, specifically India, has made in looking east. The upgrading of ties to a Comprehensive Strategic Partnership – a distinction Vietnam shares only with Russia and China– speaks for itself. New agreements to cooperate in space, cyber security, white shipping, ITES and software development, education, health and standards underlined their broadening. And the security convergence was brought out not just by policy articulation but concrete cooperation such as supply of offshore patrol vessels and a new US$ 500 million line of credit in defence.
  • The relevance of looking/acting East has interestingly been renewed by domestic developments in India in the last two years. A quarter of a century ago, India turned in that direction at a time of crisis. Today, we look again but with considerable deliberation and after due diligence. The driving factor in doing so is a well-considered national strategy of transforming India into an industrial power. This is expressed through the "Make in India” initiative but supplemented by a raft of other campaigns. "Skill India” represents its HR facet; "Digital India” its communications; "100 Smart Cities” its urban future, "Swach Bharat” its broader environment; "Start Up India” its entrepreneurial side, and "Beti Bachao, Beti Padhao” an enabler that will lead to more female employment. An integrated take of these efforts would confirm that their overall thrust is similar to the developmental direction of many polities to our East. The economic and developmental ambitions that India is now pursuing require sustained partnerships of those who have traversed a similar path in the recent past. We need not just technology and capital but knowledge and best practices as well. In many ways, this country’s future will lie in successful leap-frogging. The East has much to teach us in that regard. Paradoxically, a manufacturing correction is happening in India at the very time when those other economies are undertaking a services correction. Hopefully, we will arrive at a common ground that may bring us all even closer.
  • Japan and South Korea, along with ASEAN, stand out as natural partners in this context. It is, therefore, hardly surprising that they have been the focus of intensive Indian diplomacy. Both nations have already established strong credentials in India by virtue of earlier successful industrial ventures. But the expectation now is of a much higher order. We are looking at infrastructure development, scaling up industrial capacities, technology upgrading and consequently investment flows of a transformational nature. The realization of agendas agreed upon with both nations actually hold that possibility. With Japan, they include the high-speed railway, additional industrial corridors, new industrial townships, ambitious FDI and ODA targets, an investment–led ODA approach and vigorous collaborations in critical sectors such as energy and skills. With South Korea, the focus is on their particular areas of strength such as ship building, maritime transport, industrial parks, steel and smart grids. In parallel to enhancing economic cooperation, an important aspect of these developing ties is a recognition of their strategic character. Consequently, exchanges and conversations now cover a much broader spectrum of issues, including our converging security interests. In fact, these two nations and Australia are the only three with which India holds "2+2” foreign and defence affairs talks. With Japan, security cooperation has made more rapid progress and is reflected in annual exercises, an agreed defence framework and discussions on equipment/technology transfers. India’s approach to these relationships, and indeed to the entire region east of us, takes into account the need for a balanced and participative Asian security architecture. The world is definitely better off with a multi-polar and multilateral Asia, as is the continent itself.
  • In any discussion of India’s "Act East” policy, Sino-Indian ties are a subject of heightened attention. Part of the reason is the weight of history that this particular relationship carries on its shoulders. Some of it also arises from the great potential that it holds and the impact that its direction could have on regional and global politics. The report card of our ties for the last three decades is much stronger than many assume. From a situation of limited contacts and content, India-China relations have today transitioned out of their state of abnormalcy. We must give due credit to the efforts of successive Governments on both sides who have ensured peace and tranquillity on the border, even as negotiations on its settlement continue. Difficult problems, some of them pertaining to sovereignty, have not been side-stepped. No less significant is the ability of the two nations to work together at global forums on developmental issues. That we meet and cooperate in mechanisms ranging from EAS, G-20 and SCO to BRICS, RIC and BASIC is not a small achievement. On the economic side, the rapid rise of trade with China has had a profound, if mixed, implication. While it has allowed some new capacities to be built in areas like telecom and power generation, it has also impacted negatively on others. Fair market access in China itself remains an issue for Indian companies, including in globally competitive areas like pharmaceuticals and information technology.
  • The current Government has taken initiatives to address these challenges and strengthening the positive direction of ties. They include a more enthusiastic welcome of Chinese investments, establishment of industrial parks, collaboration in railways and a more liberal visa regime. A full realization of the vision agreed upon between the leaders of the two nations in 2014-15 requires relations to be continuously nurtured. Displaying mutual sensitivity to each other’s concerns is very necessary in that context. There is an expectation in India that a partner like China would be appreciative of India’s interests, especially when they are not in conflict with those of China. Combating terrorism is one such area and sanctioning of well-known terrorist leaders and organisations should not emerge as an issue of difference. Nor should reservations on developmental issues, such as India’s predictable access to international cooperation and investments in the field of civil nuclear energy. It is imperative for the future of Asia, and indeed the world, that the two nations approach each other with strategic maturity.
  • When South Asia looks East, attention focuses on Myanmar, and increasingly, on Bangladesh. India’s bilateral ties with both countries are strong, substantive and rapidly expanding. But we do need to reflect on the support that the international community could extend to these countries. Myanmar has taken some big steps in its democratic journey and the strengthening of its development work, national integrity and governance processes has a larger regional impact. In Bangladesh, secularism and pluralism are under stress and must be supported without hesitation. It is particularly important that we keep our eye on the overall direction of developments, rather than get excessively fixated with individual events.
  • This approach assumes more significance when it speaks for the entire region, not just for India. That puts a premium on the success of SAARC and progress in regional development. India, in recent years, has emerged as a champion of regionalism and is vigorously promoting more cooperation, connectivity and contacts. It has displayed a growing ability to be patient, flexible and creative in this regard. We are confident that most of our neighbours will appreciate that India is not only offering to share its prosperity but that this partnership improves their access and prospects. After all, a more cohesive and integrated South Asia will command greater value internationally.
  • Connectivity is a major consideration when different parts of an under–connected continent look at each other. Few would differ on the merits of promoting what clearly has strong growth implications. But if indeed these initiatives are meant for larger good, then it is also imperative that they be deliberated upon broadly and with transparency and objectivity. To the extent they are perceived as developmental rather than strategic, connectivity initiatives would gain greater traction and wider support.
  • India is today at an important geo-political cross-roads. Its ability to integrate more closely to the east has the potential to transform the Asian landscape. Fuller transformation, however, awaits a similar integration to the West. For the moment, we perhaps will have to settle for a bypass to Iran and the Gulf, until the desire for regional cooperation asserts itself more strongly. In many ways, India realising its integrated potential has a significance beyond its national prospects, which are weighty enough by itself. And certainly, a more seamless interface between South Asia and East and South East Asia is a big step in that direction. That is why it ranks high in our strategic priorities.
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