While the number of linkages has increased, there is still a lot to learn about each other before India and ASEAN can optimise this partnership.
The presence of the leaders of ten southeast Asian nations at India’s Republic Day parade, to mark 25 years of the Association of Southeast Asian Nations (ASEAN)-India dialogue partnership, demanded something special.
Raisina Hill wanted a symbolic show of force: military contingents from each country would march in unison with the cream of Indian defence forces down Rajpath, as the ten ASEAN leaders looked on.
The idea didn’t get much traction though.
“It would have been a logistics nightmare,” said an ASEAN diplomat. Another senior envoy pointed out to The Wire that it would have required further negotiation within the army officers of the group themselves – “one walks one way, another walks another way. We still haven’t ever marched together”. There was a strong push from the Indian foreign office, but ASEAN officials put their foot down.
In a nutshell, it is a near analogy of how India and ASEAN have worked for the last 25 years. The two partners know that they are made for each other on paper, but haven’t quite found the right beat to march in sync.
The ASEAN-India relationship has moved a long way from the early 1990s – from being largely economic to a more broad-based strategic partnership. Currently, there are over 30 types of India-ASEAN dialogue mechanisms, which includes the annual summit on the sidelines of the East Asia summit and seven ministerial dialogues. The change in nomenclature from Look East to Act East with the advent of the new government in 2014 was supposed to be the harbinger of a new dynamism in relations.
While the number of linkages has increased, there is still a lot to learn about each other before India and ASEAN can optimise this partnership.
“We sometimes feel that India doesn’t understand how the ASEAN process works,” said a diplomat from that region, candidly.
ASEAN had high hopes from India. However, in Southeast Asia, the lesson of the last 25 years has been one of managing those expectations. This is equally true in New Delhi where Indian diplomats have to grapple with the intricacies of protocol and bureaucratic red tape of ASEAN.
“I don’t recall having any difficulty dealing with the Indian Embassy in Jakarta, especially during the 1990s when I handled the coordination of ASEAN-India relations (as well as ASEAN-Pakistan relations),” said Termsak Chalermpalanupap, senior fellow at Singapore’s ISEAS-Yusof Ishak Institute, who worked for over 20 years in the ASEAN secretariat till 2012.
But the pace in New Delhi was apparently not very urgent. “My recollection is that the Indian government would always work hard in trying to deliver whatever it has committed to do for ASEAN. But sometimes, delivery is delayed by slow-moving Indian bureaucrats in New Delhi.”
The Indian ambassador to Indonesia used to be accredited to the ASEAN secretariat. A separate Indian mission and a new post of an ambassador to ASEAN was created in 2015, based on recommendations of the 2012 Eminent Persons Group report.
The ASEAN secretariat in Jakarta is not as powerful and omniscient as the European Union in Brussels. Nevertheless, there is a bit of frustration among members that India often bypasses the secretariat, which is against the “norm for dialogue partners”.
A Southeast Asian diplomat said that the ASEAN system, built on consensus, was based on consulting all member-states and arriving at a common position before the ASEC or ASEAN country coordinator conveys the decision to the dialogue partner. “It is not for individual ASEAN countries to respond separately on proposals to the dialogue partner,” he said.
Another peeve, added the diplomat, was that it is the norm to invite the ASEAN secretariat to all ASEAN-related events. “India has sometimes neglected to invite the secretariat and even place the ASEAN flag at ASEAN-India events,” he said.
Indian officials acknowledged that the ASEAN secretariat is sometimes circumvented, with the Ministry of External Affairs preferring to take the bilateral route, either through ASEAN missions in Delhi or India’s embassies in the regional capitals.
There are two types of projects that India cites on development cooperation in ASEAN. First are projects implemented through the bilateral route. A good illustration is India’s Tracking and Data Reception Station and Data Processing Facility in Vietnam which is included under ASEAN-India space cooperation, but whose implementation is being done bilaterally between the two countries. Similarly, India has quick impact projects and proposals to set up vocational institutions, English language and IT training centres in Cambodia, Laos, Myanmar, Vietnam (CLMV) countries countries, which are implemented through the bilateral route.
At the same time, there are three cooperation funds – ASEAN-India fund, ASEAN-India Green Fund and ASEAN-India Science and Technology Development Fund (ASTDF)– whose financing is channelled through the secretariat in Jakarta. “The money is ours, but it held by the secretariat. So the approval is given by the secretariat after they go through their normal processing, as if the funding were theirs,” said a former Indian ambassador. It means that even if the project is only in one country, the endorsement has to be obtained from all the other countries as per the project approval process of the ASEAN secretariat.
This, of course, adds days and weeks to the decision-making process, even though Indian officials note that the secretariat has certainly become more empowered in the last five years.
As per the external affairs ministry records, the ASEAN-India fund, set up in 2009 with $50 million from New Delhi, has now got approvals for projects worth $48 million “which are under various stages of implementation”. In 2016, Prime Minister Narendra Modi enhanced the corpus by another $50 million.
Announced in 2007, the ASEAN-India Green Fund had an allocation of $5 million. Currently, projects worth $1.97 million have been approved and are “under implementation”.
ASTDF began with a kitty of $1 million in 2007. It was operationalised in 2009 and its first expenditure incurred in 2011. According to the external affairs ministry, projects worth $0.67 million under ASTDF have been “under implementation”. This fund was also enhanced to $5 million in 2016.
But some of India’s initiatives are not solely at risk due to bureaucratic inertia. In 2016, India had announced a new $1 billion line of credit for connectivity projects. Till the beginning of January, no proposal had been made or formalised under this project.
At the external affairs ministry’s curtain raiser press conference on ASEAN-India commemorative summit, secretary (east) Preeti Saran had alluded to the state of affairs. She noted that India’s line of credit programmes “take time” since it was up to the recipient country to determine the projects.
“It takes time for individual countries as far as India’s lines of credit or any development assistance programmes are concerned. You would be aware that India always makes these offers which are demandable, so it is really for the host country to determine….there have been some discussions, that offer stays on the table and we hope that by the time that summit takes place there would be some request for concrete proposals which itself would be a good development,” she said on January 15.
According to a former Indian diplomat, there were no takers as none of the prospective recipient countries had the capacity to draft a detailed project report (DPR). “The external affairs ministry had suggested that India should finance and support them in drafting the DPR. But it was shot down by the Ministry of Finance when the proposal was being discussed within the government,” he said. The revised stricter guidelines of EXIM Bank were also apparently a deterrent.
Similar issues also affect the project development fund of Rs 500 crore to develop manufacturing hubs in CLMV countries.
In 2015, Modi had offered access to India’s indigenous satellite navigation system, GPS-aided Geo Augmented Navigation (GAGAN). Again, there were no takers. Indian officials say that the condition of cost-sharing may have deterred potential interest, especially since ASEAN countries have already got an alternate offer from China.
The fate of ASEAN-India centre
Another interesting case of an initiative that has gone awry is the fate of the ASEAN-India centre.
The vision statement of the ASEAN-India Commemorative Summit in 2012 had announced the setting up of an ASEAN-India centre “using existing capacities” to act as a resource centre to promote trade, investment, tourism and peope-to-people exchanges. A year later, the centre was inaugurated at the external affairs ministry’s think-tank, Research and Information System for Developing Countries (RIS).
ASEAN has similar resource centres with China, Japan and South Korea. They were all set up as inter-governmental organisations with a memorandum of understanding (MoU) between ASEAN member states and the three countries. The agreement also allowed the posting of staff from ASEAN member-states in the centres.
According to sources, a similar MoU was also drafted for the ASEAN-India centre. It would have provided for a governing board and a secretariat led by an executive director.
The setting up of of an efficient ASEAN-India Centre was considered crucial enough to be included in the ‘Plan of Action‘ for 2016-20 under the category of ‘Political cooperation’. “Maximise the utilization of the ASEAN-India Centre as a resource centre for ASEAN Member States and India to strengthen the ASEAN-India Strategic Partnership across all pillars of cooperation,” said the roadmap document.
In the last two ASEAN-India summits in 2016 and 2017, the state of limbo of the centre was raised by the ASEAN side. The 2017 summit chair’s statement pushed India for an “early signing” of the MoU. “The Centre’s early operationalisation would help promote cooperation in various areas such as trade, investment, tourism and people-to-people exchanges between ASEAN and India,” said the chair on November 14, 2017.
The Wire has learnt that there has been a “rethink” in New Delhi, with sources indicating that South Block was not in favour of signing the MoU which would have led to giving up of some control over the resource centre.
India’s focus on the Northeast
One of the other key differences in approach between India and its ASEAN counterpart, as per officials in Southeast Asian countries, has been the former’s focus to have a visibly busy calendar. “A lot of things are done (by India) to tick off boxes,” said a senior Southeast Asian diplomat.
This leads to a common grievance from the Indian side that while India shows up at meetings with files full of plans, there are no matching level of suggestions from the ASEAN side.
When asked about the relative lack of ‘proposals’ from ASEAN, a senior diplomat from the region pointed out, “We don’t have the budget and the same number of people like India… the Indian government has the money with which it can contract out any number of events. We can’t do that”.
Southeast countries are quick to appreciate that India has ramped up its stake in the region, with public rhetoric and concrete commitment. It is only that some of India’s priorities make them scratch their heads. “It is not that you don’t do enough, but how you do it,” explained a senior ASEAN diplomat based in Delhi.
A case in point for him was the Indian government’s insistent coupling of its Act East policy with the development of Northeastern states.
Another official from a major Southeast Asian nation pointed out that this had salience for only Myanmar and Thailand among the ten countries. “India’s consistent focus on the issue at ASEAN-India meetings may be preventing the ASEAN-India relationship from expanding in areas where there are stronger mutual interests,” he said.
A retired Indian ambassador reminisced that during talks on increasing direct flights by regional carriers, the Indian delegation always put the demand for connecting the Northeast first. “They would want to fly to Trichy, but we say that they should first go to Guwahati,” he said.
Stating that there could not be any dimming of the spotlight on the Northeast under the Act East policy, a senior Indian government official said, “We talk about Northeast more because of the political focus on this region”. It also redressed, he argued, the neglect that the Northeast faced previously, when it featured in Indian foreign policy largely due to China’s territorial claims and prevalence of camps of insurgent groups in neighbouring countries.
Another foreign diplomat from ASEAN, which has significant investment in India, noted that lack of infrastructure, big market industrial density in the Northeast meant that few foreign firms showed interest. “It is difficult for us to hard-sell the Northeast to our companies…We don’t want to engage just with the Northeast. We want to engage with the whole of India”.
India touts the Northeast as the land bridge to Myanmar that will foster greater integration with the rest of Southeast Asia. In a speech in Singapore last year, foreign secretary S. Jaishankar had described connectivity as the “new Great Game”. He noted that physical connectivity projects were the key means to underline India’s “seriousness” about its Look East policy.
In April 2002, green light was given for a trilateral highway, 1,360 kilometres long, from Moreh in Manipur to Mae Sot in Thailand, through Bagan in Myanmar. Over the years, the project has seen changes in route alignment, additions of new road segments and 69 bridges to India’s development portfolio in Myanmar.
Work on the replacement of the World War II-era bridges is scheduled to begin this month. After the contract was awarded last month, the second project set to start on the highway is the upgradation of the road section between Kalewa-Yargi section.
A 2017 report by the Observer Research Foundation had estimated that the Indian government is unlikely to meet the revised target of the project, largely due to bureaucratic processes and capacity of the delivery mechanism.
Besides, the motor vehicles agreement required to operationalise the facilitation of vehicle movement between the three countries has been further delayed. While the agreement has been drafted, Myanmar had earlier postponed the signing due to the elections and formation of new government after the 2015 elections. Now, Myanmar has conveyed that it will “proceed with this agreement once it has comprehensively reviewed the implementation of similar arrangements it has with other countries”.
Meanwhile, Reuters reported that China-ASEAN Investment Cooperation Fund (CAF) plans to raise $3 billion for a new dollar fund for investments under the ‘Belt and Road Initiative’ in Southeast Asia.
Executive director of Chulalongkorn University’s Asean Studies Centre, Suthiphand Chirathivat, asserted that it was important for India to complete its key connectivity project, the trilateral highway, despite the “setbacks and delays”.
“This is an important connectivity project that should be completed as soon as possible. It can help show the rest of the world that India is committed to working with ASEAN in a concrete way, not just in rhetoric. ASEAN-India connectivity will show everyone else that Southeast Asia is connected not only to China up north, but also closely linked with India to the west,” Chirathivat told The Wire.
As early as 2013, the external affairs ministry informed the parliamentary committee that India had got requests for an extension for the trilateral highway to Cambodia, Lao PDR and for a new highway in Vietnam. Chastened by experience, India “made it clear that out of the box solutions would need to be found for this capital-intensive exercise, that the private sectors should also be involved”.
At the December 2017 ASEAN-India connectivity summit in Delhi, a senior finance ministry official told the audience that the proposal for the Cambodia, Lao PDR and Vietnam was still “under consideration”.
With land connectivity projects having an extended gestation period, ASEAN countries have been pushing India hard on improving air and maritime links.
The chairman’s statement at the 15th ASEAN-India summit reminded that two agreements in these areas have been hanging fire. “We encouraged stronger aviation and maritime connectivity by working towards the expeditious conclusion of an ASEAN-India Air Transport Agreement and an ASEAN-India Maritime Transport Agreement,” Filipino President Rodrigo Roa Duterte said on November 14, 2017.
The concept of a maritime transport agreement had been in the works for several years. As per sources, one of the reasons for it not reaching fruition are inter-ministerial tensions within the Indian government.
Increasing slots for direct flights between India and ASEAN is a contentious issue, not just diplomatically, but also within the government. The problem arises from the fact that while Southeast Asian carriers are fully able to use their allocation for seats between India and ASEAN, Air India has only managed to utilise about 60%.
“The Indian position is that if Indian designated airline has not used up to 80% of the seats, they will not re-negotiate. It is holding us hostage. I can’t expand because you can’t do your job properly,” said a diplomat from an ASEAN member state.
On the other side, an Indian diplomat claimed that the delay over air connectivity was due to a “simple” dilemma within the government. “What is in India’s interest – better connectivity or survival of Air India?” he said.
Widening trade gap and RCEP
Improving connectivity is, of course, crucial to increasing economic activity. “From an economic perspective, connectivity reduces trade costs. Mere tariff reduction through free trade agreements is not enough for trade to grow. FTAs are to be combined with other elements such as reducing transport costs, facilitating trade and measures to deal with non-tariff measures. India needs to play a much more pro-active role in this regard,” said Anupama Devendrakumar, researcher at Chulalongkorn University’s Asean Studies Centre.
India signed a free trade agreement on trade in goods in August 2009, which came into force from January 1, 2010. The incremental trade figures have been a bright spot in relations, increasing from $2.9 billion in 1993 to $76 billion in 2017. The last decade has seen India-ASEAN trade go up $78.9 billion in 2011-12, but also drop sharply to $65.1 billion in 2015-16.
India’s chief concern has been wrapped up over the widening trade gap, that has increased every year except in 2013-14 and 2016-17.
The commerce ministry had informed the department-related parliamentary standing committee that India’s trade deficit was largely due to the import of coal, petroleum and edible oils. This did not impress the committee members, who pointed out that the main issue was the lack of better market access for goods in sectors where India was competitive, like textiles and pharmaceuticals.
But, to improve market access, there has to be a successful conclusion of the Regional Comprehensive Economic Partnership (RCEP) negotiations. RCEP is a proposed free trade agreement between the ten ASEAN members and six other Asia-Pacific economies, namely, Australia, China, India, Japan, South Korea and New Zealand.
The ASEAN countries have accused India of stalling the deal over agricultural trade, service and immigration. Ahead of the commemorative summit, trade ministers from Southeast Asian countries urged India to “stand with ASEAN to conclude the negotiation for the RCEP this year”.
However, Indian commerce minister Suresh Prabhu echoed the official position that agreement had to be “balanced” and “collectively satisfying” between the “three pillars of RCEP goods, services and investments”.
Senior non-resident fellow at Carnegie Endowment, Frederic Grare, said that India’s protectionist instincts could impact its regional profile.
“It is certainly seen as a sign of weakness, as a source of frustration because it does slow down or impede the negotiations and certainly does not impact positively India’s regional status, therefore diminishing its role in the security architecture,” said Grare, whose book, India Turns East: International Engagement and US-China Rivalry, is on the Look East policy.
He also added that ASEAN, however, has limited choice as “India remains the only very large economy in the region, even if a distant second vis-à-vis China and therefore cannot be ignored or left aside”.
India is likely to continue to play hardball on RCEP, as indicated by foreign secretary S. Jaishankar in his submission to the parliamentary standing committee on commerce in June 2017.
“The reluctance in giving market access for trade in services is a big challenge. He (Jaishankar) called for observance of due restraint and not conclude trade arrangements which are not to our medium-term advantage. It was submitted that a lot of our agreements have not served as well as they could have,” said the panel’s report.
Incidentally, two countries – Indonesia and Cambodia – are yet to ratify the agreement on investment and services between ASEAN and India that was signed in November 2014 and came into force in July 2015.
Greater foreign trade and investments were certainly a major part of India’s calculation for its Look East policy. But, for ASEAN, the “China factor” had been a constant hum in the background of its enthusiastic overtures towards New Delhi.
India first articulated the strategic dimension of its Look East policy in January 2005. A key principle of India’s policy towards East Asia, said the then defence minister Pranab Mukherjee, was based on the “maintenance of an equitable strategic balance and prevention of regional rivalries from destabilising the region”.
Around that time, India had started to lobby to be invited to a ‘East Asia summit’. Facing resistance from some ASEAN members, including host Malaysia to include India, New Delhi had to ramp up its diplomacy. India finally got the invitation to the first East Asia summit due to strong backing of Singapore and Indonesia.
However, India’s activity in these Asian security institutions have been limited. The main initiative by India under the East Asia summit was to propose the establishment of Nalanda University.
Incidentally, India had presented a paper at the East Asia workshop on regional architecture in 2014. Former Indian diplomats said that the Indian paper didn’t throw up any new ideas and was largely written in boilerplate diplomatese. “It was mainly submitted as we wanted to throw our hat in the ring after the Russians and Chinese also gave a paper each,” he said.
The main article of faith for India is ASEAN centrality. However, with ASEAN unity fraying over the South China sea, there is increasing stress over the group’s position at the centre of the regional security set-up. With the rich waters of the South China sea giving fodder for the ongoing show of the rise of China, New Delhi has another complication to deal with in the wider Indo-Pacific.
“The problem is not only that ASEAN centrality is under stress due to a growing US-China rivalry. It is also that there is a growing uncertainty regarding US commitment to regional security. I insist on the term uncertainty because the actual policy has changed very little and certainly much less than the perception,” Grare told The Wire.
Not surprisingly, India is planning to put maritime security at the heart of the commemorative summit. The Indian military already has defence ties with the bigger ASEAN countries, but navigating the regional group dynamics for greater cooperation in the sector would be tricky. As the external affairs minister Sushma Swaraj stated, India wanted to work closely with ASEAN in developing blue economy, coastal surveillance, offshore patrolling capabilities, hydrographic services and maritime domain awareness.
With the re-emergence of the ‘Quad’ and the buzz over the ‘Indo-Pacific’, ASEAN leaders are still grappling with the implication of major powers widening the strategic oceanic space to the Indian Ocean.
India is also considering the wisdom of the Indo-Pacific, which could risk allowing China to have a bigger say in the Indian ocean by virtue of their rising naval presence and thereby seek a seat at IOR institutions. Beijing, so far, has stuck to the term ‘Asia-Pacific’ in its diplomatic discourse.
Amidst this ongoing geo-political churning, the invitation for ten leaders from Southeast Asia to stand together at India’s annual national military parade was a visible statement that none could refuse.
“We did spring a surprise at short-notice when it was first suggested at a meeting of senior officials. But we were also surprised with the alacrity that it was accepted,” said a senior external affairs ministry official.
Not all the confirmations came in at the same time though. Till last month, there a small percentage of uncertainty about the Thai prime minister’s presence due to lack of clarity about the date for the coronation of the new King. But finally, all the RSVPs came in.
“It is what you show by coming and what you show by not coming,” said an ASEAN envoy, adding, “For an Indian, the Republic Day is the pinnacle. It doesn’t matter what you say or do, it is enough that they are here”.
Echoing this sentiment, former Indian ambassador to Indonesia, Gurjit Singh, said, “You cannot judge ASEAN by what is the content of their papers like the Europeans. You have to read the smile of their faces, that they turned up”.
The preparations began in earnest only from October-November, when the ASEAN members were given a ‘rough’ programme. Since then, it has been a non-stop series of separate meetings between Indian officials of various hues and ASEAN diplomats.
With ASEAN missions ranging in size from five to 15, it has meant that most of the last one month has been spent in endless series of meetings.
Despite official external affairs ministry denial, The Wire learned that a major ASEAN country did ask the ministry if it had made provisions for a smog-heavy Republic Day. According to sources, the ministry informed them that fog or smog was not a major concern in January in Delhi.
There had been a bit of nervousness among ASEAN missions that not all sections of the programme had been locked down till early this week. With the responsibility of a high-level visit, the questions from the ASEAN diplomats on each and every aspect of the unusual agenda were numerous – but the answers did not roll in as fast.
There was also a bit of heartburn that India was going on adding various events in the run-up to the commemorative summit at very short notice, which meant additional presence from headquarters.
On Monday, the full dress-rehearsal of the Republic Day, which included the walk-through at the Rashtrapati Bhawan, had calmed nerves, slightly. “We manage expectations by saying that this is the Indian way,” said the ASEAN diplomat.