India focuses on ‘Act East’ policy in first 100 days of Modi 3.0

India's ‘Act East’ policy accelerates in Modi 3.0 with the strengthening of Southeast Asia ties, defence cooperation, and boosting semiconductor collaboration.

India’s ‘Act East’ policy has been put on the front burner in the first hundred days of Modi 3.0 with the President, Prime Minister and External Affairs Minister all travelling to South-East Asia to cement bilateral cooperation with ASEAN countries.

Prime Minister Narendra Modi and his Singapore counterpart Lawrence Wong visited AEM Holdings Ltd, a lead player in semiconductors.

In the past 100 days, President Draupadi Murmu travelled to Timor-Leste apart from Fiji and New Zealand, Prime Minister Narendra Modi hosted Prime Ministers of Vietnam and Malaysia in New Delhi and then travelled to Brunei and Singapore to deepen bilateral ties. Barring then-PM Manmohan Singh travelling to Brunei for a day to attend the ASEAN-India summit in 2013, PM Modi is the first PM to go to the Sultanate on a bilateral visit since Independence. That PM travelled to Singapore and Brunei so early in his third term indicates the diplomatic priority to South East Asia and policy of development of India through the ASEAN region.

External Affairs Minister S Jaishankar hosted his counterparts from Myanmar, Thailand, Vietnam and Malaysia. He also travelled to Laos and Singapore for ministerial visits in the first 100 days of Modi 3.0.

While PM Modi’s visit to Brunei was tied to close bilateral relations with the Sultanate, it was also to dispel any misgivings of Southeast Asian countries that New Delhi had little time for the region. Brunei and India also have deep defence cooperation.

PM Modi’s visit to Singapore could not have been so timely with his counterpart Lawrence Wong taking over the PM’s job on May 15, 2024, and the Indian PM starting his third term only a month later. That PM Lawrence Wong and PM Modi spend more than four hours in each other’s company is an indicator of the priority given to bilateral relations by both countries.

While Singapore-based real estate developer CapitaLand decided to double its funds under management in India to more than Rs. 90,280 crores just as PM Modi landed in the Island Nation, the two countries later signed an MoU on bridging the semiconductor eco-systems on government to government basis to discuss semiconductor supply chain related issues. Singapore has been a strong supporter of India in ASEAN despite the pressures from China and its supporters in the multi-nation grouping.

It was quite evident that PM Modi was on a semi-conductor mission in Singapore, which contributes to around 10 per cent of global semiconductor output, five per cent of global wafer fabrication capacities and 20 per cent of semiconductor equipment production. Nine out of the top 15 semiconductor firms have set shop in the city nation.

Singapore has players in all three segments of semiconductor value chains. MediaTek, RealTek, Qualcomm, Broadcom, Maxlinear, and AMD are present in integrated chip design. ASE Group, Utac, STATS ChipPack, and Silicin Box are in assembly, packaging and testing. GlobalFoundries, UMC, Siltronic and Micron are in the city-state for wafer fabrication. Soitec and Applied Materials in equipment and raw materials producers.

Singapore has already surveyed four out of 12 industrial parks/smart cities on offer in India and a decision on investment on how many parks and how much USD to be invested will be taken soon.

With the ASEAN summit scheduled in Laos in October, India under PM Modi has made it clear that its future and maritime security is linked with Southeast Asian nations. For countries like Singapore, Philippines, Indonesia, Malaysia and Vietnam, India is a viable destination and partner without any inbuilt economic leverages and coercion.