New Delhi indicated that its Act East policy is not directed at containing, let alone matching, Chinese influence when it dragged its feet on joining the Regional Comprehensive Economic Partnership (RCEP). A flurry of reports followed, analyzing and commenting on the pros and cons of joining RCEP.
Many experts pointed to such reasons as lack of competitiveness, economic slowdown, priority of short-term interests over long-term objectives, and lack of economic prudence for India’s decision not to join the free-trade arrangements within RCEP. Many reports also suggested that a trade deficit with China would carry serious financial repercussions for India and several domestic sectors of its economy such as farming and dairy would be adversely impacted, while India’s existing free-trade agreements with Southeast Asian countries imply that RCEP would not be helpful for India.
Amid the avalanche of commentaries on the economic side of the RCEP, India’s decision also points to the fact that its Act East policy cannot be as proactive as China’s moves according to grand designs in the region because of resource gaps, and therefore efforts must be limited to building as much influence as necessary to defend India’s security interests in the Indo-Pacific region.
While China is in a hurry to expand its strategic as well as economic footprint across the Indo-Pacific region through connectivity projects under the Belt and Road Initiative and free-trade arrangements such as RCEP, India is confident in its Act East policy as well as its Indo-Pacific strategy, which according to External Affairs Minister S Jaishankar would not be adversely impacted by all these evolving circumstances. He said: “Our cooperation spans so many domains that this one decision does not really undermine the basics. Even in trade, India already has FTAs with 12 out of the 15 RCEP partners. Nor is there really a connection with our Indo-Pacific approach, as that goes well beyond the RCEP membership.”
New Delhi’s belief seems to be driven by the geo-strategic consideration that China would not be able to forge strategic ties with major Indo-Pacific players that are also members of RCEP, such as Japan, South Korea and Australia. These states are within the US sphere of geopolitical influence. Therefore, China would not be able derive much strategic benefit from RCEP that could contribute to India’s security concerns.
Second, India’s piecemeal approach also seems to rest on a belief that China would not be able to build close strategic ties with Association of Southeast Asian Nations (ASEAN) members only through connectivity and free-trade arrangements. India must have been assured by the fact that China’s territorial claims, coercion and violation of international laws in the South China Sea that adversely impacted its relations with most of the countries in the Southeast Asian region including Vietnam, the Philippines, Malaysia, Brunei and Indonesia would not allow China a strategic presence that would pose serious security challenges for India.
While China refused to accept the verdict of the International Tribunal on the Law of the Sea over the claim of an island belonging to the Philippines, it deployed warships on the southern shores of Vietnam. Indian Prime Minister Narendra Modi made references to the disputes in the South China Sea in appropriate platforms and upheld the view that all the maritime claims must be settled according to the United Nations Convention on the Law of the Sea, which in turn strengthened the position of Southeast Asian countries on maritime questions. For instance, during the ASEAN-India summit in Kuala Lumpur in November 2015, he said: “India hopes that all parties to the disputes in the South China Sea will abide by the guidelines on the implementation of the Declaration on the Conduct of Parties in the South China Sea, and redouble efforts for early adoption of a Code of Conduct on the basis of consensus.”
He expressed similar concerns during his speech at the Shangri-La Dialogue in Singapore in June 2018, regarding “freedom of navigation, unimpeded commerce and peaceful settlement of disputes in accordance with international law.”
For this reason, even while the countries of the region could not ignore the military and economic prominence of China and decline to engage, India’s engagement has been sought, at the same time, in diplomatic, economic and military domains to balance their interests and concerns.
However, former Indian diplomat M K Bhadrakumar observes a strategic failure on India’s part in its decision not to join RCEP. He notes how China is making strategic inroads into the Southeast Asian region under the China-ASEAN cooperation framework, which is proposed to be upgraded from the current “2+7” to a “3+X” framework. He notes that the “‘3+X’ framework (X for ‘X factor’) means China-ASEAN will touch many fields while focusing on three pillars – political security, economy and trade, and people-to-people exchange. The framework will facilitate deeper cooperation in digital economy, artificial intelligence and cybersecurity, which would elevate the China-ASEAN cooperation to one of global substance.”
He notes the US failure to find a way into the China-ASEAN negotiations over a Code of Conduct in the South China Sea disputes under the rubric of “freedom of navigation,” which could have serious strategic implications for India as well. Besides, RCEP represents free-trade arrangements based on ASEAN centrality, and India, while it recognizes ASEAN centrality in its own Indo-Pacific strategy, has abandoned the principle on the question of joining RCEP. This may also cause hitches in India-ASEAN relations. India may get around this probability because it has free-trade agreements with most of the countries of the group.
However, New Delhi may like to believe that it will take a long time for China and the Southeast Asian countries to build sufficient mutual trust to forge a common Indo-Pacific vision that could impair India’s strategic interests. Further, apart from resource constraints, India may also prefer to avoid a proactive Act East policy in a bid to stay clear of the US attempts at containing China in the Indo-Pacific region, which could lead to formation of a China-Russia axis in the region and imperil India’s security concerns.
Indian Defense Minister Rajnath Singh, indicating a piecemeal Act East policy, said, “The government has started several infrastructure projects in Arunachal Pradesh.” The states in the northeast of India are considered to be the gateway to India’s eastward stride. Further, according to the defense minister, India’s decision not to join RCEP meshes squarely with its Act East policy: “Farmers, laborers, factories and industries would have [been] affected had India joined the RCEP. This is a big decision. In this decision, the northeast’s interests were kept in mind.”
Prime Minister Modi during his recent visit to Thailand to attend the 16th ASEAN-India Summit, the 14th East Asia Summit and the third summit meeting of RCEP also underlined the significance of northeast India. He said: “Our focus is to connect India’s northeast with Thailand. [The] northeast is being developed as a gateway to Southeast Asia. This initiative will immensely strengthen India’s Act East policy and Thailand’s Act West Policy.” He also referred to New Delhi’s plans to establish seamless connectivity among Thailand, Myanmar and northeast India.
Meanwhile, China has objected to Singh’s visit to Arunachal Pradesh. Chinese Foreign Ministry spokesman Geng Shuang said the Chinese government “never acknowledged the ‘so-called’ northeast Indian state, which it claims to be a part of South Tibet.” This indicates that India’s incremental approach to the Act East policy is not immune to Chinese influence.