India announced a Look East policy in 1992, years after the Southeast Asian ‘tiger economies’ had surged into the global limelight. Over time, the governments of East and Southeast Asia joked India’s policy was better described as ‘look east, then look away’.
New Delhi has struggled to put meat on the bones of this policy. Its relatively closed economy, overstretched military and inability to match China in any sphere meant that India remains a two-tier foreign partner for these countries.
The past year has seen East Asia beating a path to India. Japanese Prime Minister Shinzo Abe was the country’s Republic Day chief guest. He had been preceded by the first joint summit between India and the Asean. The election of Prime Minister Narendra Modi and the sense that the past five years of inertia may have come to an end have only accelerated this subcontinental drift. China’s new leader, Xi Jinping, has already signalled his desire to visit India this year. There are many reasons for this development.
An economic reason is that both China and Japan have huge idle manufacturing capacity or capital surpluses that need to find new markets. With the West in the doldrums, India is among the obvious places for such economies to direct their energies. It helps that India fits in neatly with the domestic reform agendas of both Mr Xi and Mr Abe. The Chinese leader needs to appease his state-owned enterprises. Mr Abe wants legitimacy to shed the constraints of World War II. An edge has been added to this by the geopolitical friction that is rising along the Asia-Pacific rim. This is driven by the expansion of Chinese power, the loss of American will and the reaction of not merely Japan but also countries like Vietnam and Indonesia to both former developments. Keeping India in this mix is important to all of them.
{{/usCountry}}An economic reason is that both China and Japan have huge idle manufacturing capacity or capital surpluses that need to find new markets. With the West in the doldrums, India is among the obvious places for such economies to direct their energies. It helps that India fits in neatly with the domestic reform agendas of both Mr Xi and Mr Abe. The Chinese leader needs to appease his state-owned enterprises. Mr Abe wants legitimacy to shed the constraints of World War II. An edge has been added to this by the geopolitical friction that is rising along the Asia-Pacific rim. This is driven by the expansion of Chinese power, the loss of American will and the reaction of not merely Japan but also countries like Vietnam and Indonesia to both former developments. Keeping India in this mix is important to all of them.
{{/usCountry}}All of this gives India a degree of leverage that Mr Modi can use to his advantage. Modi has visited both China and Japan several times and claims Singapore’s ex-prime minister, Goh Chok Tong, as a sort of international mentor. The greatest challenge will be China. This is not only because of its size, but also because of its unpredictability.
Mr Xi, after all, had signalled a desire to put the difficulties of the past five years behind him when he came to power in March 2013 — and followed this up with the Depsang military intrusion. Similarly, Modi must recognise that he must be prepared for blowback as he manoeuvres India into the space between East Asia’s geopolitical faultlines. The first step in all this is to resuscitate India’s economy. But he should recognise this will be much easier if Asia’s two largest economies assist him.