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J. Srinivasan

AT LAST recognition comes knocking for India in Asia. Though one of the biggest countries in the continent in terms of size and military might, the Indian elephant was not recognised as an economic powerhouse by the Asian tigers till the Asean+India Business and Investment Summit happened at Bali.

If the Thai Prime Minister, Mr Thaksin Shinawatra, grouped India with China as "economic powerhouses of the region", Mr James Goulding, CEO, Asia-Pacific Region of Deutsche Asset Management Group, said that the country was entering a "golden era". Clearly, the major economies in the region are beginning to take India a lot more seriously, and this is quite the time to build on this change of perception.

It was no doubt a defining moment for the country when the Prime Minister, Mr Atal Bihari Vajpayee, signed India's accession to Association of South-East Asian Nations' Treaty of Amity and Cooperation. With Japan and Korea expected to join in, the treaty reflects a unity of purpose to expand trade in goods and services and investment flows besides ensuring peace and security in a region increasingly threatened by terrorism.

The Bali summit does augur well for furthering economic and political cooperation between India and its 10 South-East Asian neighbours, extending from Myanmar to the Philippines, with the signing of the Framework for India-Asean Free trade Area by 2012. The annual Asean summit is when leaders exchange views, informally, without a properly-set agenda. India was first invited to this summit last year, in obvious recognition of its growing economic and political importance in the region.

Asean upgrading the engagement level with India is a vindication of New Delhi's Look East foreign policy, launched at the start of the 1990s by the P. V. Narasimha Rao government. More important, it signals a continuum in foreign policy over 15 years and several governments. The country must decisively break out of the shackles of the constricting and debilitating politics of the sub-continent that has been marked more by strife and differences rather than substance.

The latest Asean-India initiative is certainly a step in this direction. It forges a link that may at long last bring to fruition Asian solidarity, a concept laid low by the Cold War. In the post-Cold War re-drawing of alliances, Asean may not be averse to closer links with India, increasingly seen as moving towards the United States, on which the South-East Asian nations are greatly dependent for economic and military security. New Delhi must build on this.

With Asean accelerating trade within the region and with the three dialogue partners — China, Japan and South Korea — the idea of Asian brotherhood, at least in this part of the world, has come to be defined more by economics, and could, thus, be ever-more enduring. After all, nothing speaks as powerfully as money.

As the External Affairs Minister, Mr Yashwant Sinha, in his speech at Harvard University last month (quoted in The Hindu), said: "...The rhythm of the region today is determined, however, as much by trade, investment and production as by history and culture. That is what motivates our decade-old Look East policy. Already, this region accounts for 45 per cent of our external trade..."

The trade between India and Asean has jumped from $ 3.1 billion in 1991 to about $12 billion in 2002. Now, Mr Vajpayee is pitching to raise this to $30 billion by 2007. The Prime Minister further reinforced India's commitment to Asean when he unilaterally offered a `open skies' policy to specified South-East Asian airlines, which will be free to operate daily flights to Indian metros, outside any bilateral aviation pact.

Rightly recognising the need to move forward on the regional front through established Regional Trade Agreements, or blocs, India signed a bilateral agreement on comprehensive economic cooperation with Thailand and another with Singapore is to follow.

As for the Asean FTA, negotiations on goods are to start in 2004, with services being taken up the subsequent year; the framework is expected to be in place by 2007. India has offered to eliminate tariffs for five Asean members — Singapore, Malaysia, Indonesia, Thailand and Brunei — by 2011. Cambodia, Laos, Myanmar and Vietnam will get time till 2016 to set up FTAs with India.

The other areas requiring attention are: India's import duties are moving towards Asean levels, but the pace has been tardy, dragging the bilateral trade volumes. The $30-billion trade target cannot be achieved if India's Customs duty rates remain at 32.7 per cent, when they are merely 8 per cent in Indonesia and 16.6 per cent in Thailand. Sectoral FDI caps, as in telecom and aviation, are affecting investments from Asean. Setting right all this will test the endurance of the relationship as also of the Look East policy.

In this era of mutilateralism, the idea of bilateralism and RTAs may appear an incongruity. Yet, it cannot be denied that RTAs offer quick gains that multilateralism, to which India is wholly committed, has not been able to deliver.

Thus, while projecting India as a resurgent economy where "multiple revolutions" are taking place, Mr Vajpayee made a case for RTAs, which can bring immediate advantages to the countries involved even as they all together ready for the multilateral world. India must not, indeed cannot, lose sight of its multilateral obligations at the World Trade Organisation. But the RTAs, recognised as the way to go, can be complementary. In the fast-globalising world, terrorism too has quickly spread to all corners of the globe. While India in no stranger to this problem, the Asean region, especially the Philippines, Indonesia and even Singapore, are feeling the first real impact of international terrorism and thus the agreement to fight this menace cooperatively. India can offer concrete support to meet the challenges on this front.

As Mr Sinha said in his Harvard lecture (quoted in The Hindu), "the other aspect of Phase Two of the Look East policy is the movement away from exclusive focus on economic issues in phase one to a broader agenda that involves security cooperation, including joint operations to protect sea lanes and pooling resources in the war against terrorism.

"The military contacts and joint exercises that India launched with Asean states on a low key basis in the early 1990s are now expanding into full-fledged defence cooperation. India has also quietly begun to put in place arrangements for regular access to ports in South-East Asia. India's defence contacts have widened to include Japan, South Korea, and China. Never before has India engaged in such multi-directional defence diplomacy in Asia."

Indeed, for India this is indeed a great opportunity. With its Look East policy vindicated, it must extend the concept to cover Australia and New Zealand; keep the Sino-Indian trade links expanding, and upgrade ties with Japan. Asean could prove the useful core in this effort. More important, with its reasonably good relations with the Persian Gulf countries, notwithstanding the Pakistan factor, India could be the bridge between East and West Asia.

Already, the Gulf Cooperation Council has offered New Delhi a dialogue partner status, thanks mainly to the large India labour presence in the region and the growing business interests. If as the Big Brother in the sub-continent, India is able to influence the SAARC siblings to become a part of a larger pan-Asia union, New Delhi can legitimately see itself emerging as an influential regional power, and a leader of the developing world.

Clearly, India is constructively engaging South-East Asia on all fronts. But it will have to persist with its efforts to make real headway as many of the countries in the region have strong historic, cultural and ethnic ties with China. Beijing will remain the point of first contact, though, undeniably, as a pink paper put it, New Delhi has set in motion a process for a tryst with its Asian destiny.

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