India needs to counter China in Southeast Asia with strong policies
Attempts to counter China in Southeast Asia are limited by our trade and investment policies.editorials Updated: Nov 24, 2015 00:45 IST
Prime Minister Narendra Modi has rightly spoken of Southeast Asia as India’s gateway to the rest of the Asia-Pacific. Unfortunately, he has not fully buttressed this sentiment with the policies needed to ensure members of the Association of Southeast Asian Nations (Asean) have a similar view regarding India’s importance.
Where India has won brownie points is its increasingly stronger rhetoric regarding China’s out-of-hand territorial claims on the South China Sea. Mr Modi has used the present East Asia Summit in Malaysia to call for all parties to the dispute to implement the Declaration on the Conduct on South China Sea. While India continues to avoid naming China, the latter is the only country that refuses to accept the code of conduct.
New Delhi’s references to freedom of navigation and the United Nations Convention on the Law of the Sea are also verbal challenges to the Chinese position.
However, India needs to do a lot more to bolster Asean against Chinese pressure. It is an open secret that two Asean members are effectively allied to Beijing and that more countries, drawing from China’s show of strength in the region and by the weakness of the United States response, may defect. If this continues, China’s territorial claim will become an unchallenged reality.
The precedent this would set for India’s own territorial problems with China does not have to be spelt out. India is probably doing as much as it can on the military front, given its stretched defence resources, poor fiscal resources and inability to build or provide weapons to third countries.
However, where India continues to fall short is in the area of trade and investment. If some Southeast Asian countries are succumbing to China’s siren call, the reason is the overwhelming Chinese economic presence in the region. India, being a much smaller economy, will struggle to match China. But it can work on deepening institutional economic relations. Instead, it is walking away from doing so.
The Modi government has played an unhelpful role in completing the Regional Comprehensive Economic Partnership (an Asean plus six free trade agreement). It is also in denial about the importance of the Trans-Pacific Partnership (TPP), a trade pact that could transform trade in services.
Four Asean members have already signed on, including India’s two most important strategic partners in the region — Singapore and Vietnam, and more are likely to join. India has given itself the easy goal of joining the Asia-Pacific Economic Conference.
It says something about India’s trade policy that it is struggling to join even this shallow, non-binding grouping. The TPP was designed to exclude China. By excluding itself from this and similar trade agreements, India is distancing itself from Southeast Asia and failing to underpin its words with concrete actions.