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New Delhi: On October 28, when Prime Minister Narendra Modi took part virtually in the annual ASEAN-India summit for the ninth time, it was part of the yearly stock-taking exercise by the regional group of 10 South-East Asian states to review and plan its engagement with its dialogue partners.
With the centre of gravity of geo-politics moving consistently towards Asia, there is intense competition among major powers to woo the ASEAN economies with investment, soft loans and projects.
Within six months of his electoral victory, Modi officially renamed India’s ‘Look East’ policy into an ‘Act East’ strategy to project a more proactive commitment to the region. In 2018, he hosted the leaders of the 10 countries to mark 25 years of ASEAN-India relations. Next year, both sides will mark the 30-year milestone as ‘ASEAN India Friendship Year.’
Here is The Wire’s update on the status of the high-profile assurances to ASEAN in sectors ranging from trade to connectivity.
FTA review yet to start, RCEP withdrawal continues to cast a shadow
In November 2014, Modi assured a “major improvement in our trade policy and environment” during his first speech to ASEAN leaders. He called for a review of the India-ASEAN free trade on goods and urged the Free Trade Agreement (FTA) on services and investment to be brought into force.
He also said that the then under-negotiation Regional Comprehensive Economic Partnership (RCEP) agreement could be a “springboard for economic integration and prosperity” if it were a “balanced agreement”.
Seven years later, RCEP is now in force, but India dropped out at the last minute before the text was finalised in Bangkok in 2019.
Two months earlier, both sides had agreed to “initiate the review” for the FTA agreement on goods.
But frustration over the eleventh-hour withdrawal from RCEP, negotiation fatigue among ASEAN and the COVID-19 pandemic has meant that the review has not even begun.
“There was a feeling among certain ASEAN members that India led them up the garden path on RCEP,” said a diplomatic source, who had access to the ASEAN-India channels during negotiations. There is also a perception in South-East Asian capitals that India is not ready to open up its economy, and therefore, any further negotiation for review of the FTA will not be mutually advantageous.
Obviously, Raisina Hill has a different perception. Speaking at a seminar earlier this month, commerce and industry minister Piyush Goyal stated that India had witnessed exponential growth in imports from ASEAN. At the same time, Indian exports were impeded by “non-reciprocity in FTA concessions, non-tariff barriers, import regulations, quotas and export taxes from ASEAN countries”.
In his remarks at the 2021 summit, Modi again called for an “early review” of the FTA on goods. The ASEAN chair also replied that they to the review”, but no specific deadline was mentioned. He also added that given India’s role in regional value chains, ASEAN “looked forward to India’s participation in the Regional Comprehensive Economic Partnership (RCEP) whenever it is ready to do so”.
Meanwhile, the ASEAN FTA agreement on services has come into force, while FTA on investment has been ratified but not operationalised.
A thousand fellowships in IITs
At the January 2018 commemorative summit, the announcement of 1,000 doctorates for ASEAN citizens in India’s prestigious Indian Institutes of Technology (IITs) was highlighted as a significant announcement by India. The programme was jointly inaugurated in September 2019 by external affairs minister S. Jaishankar and then human resources development minister Ramesh Pokhriyal Nishank.
With a budget of Rs 300 crore, it was described as the “single largest capacity development initiative of India in its partnership with ASEAN”. IIT-Delhi was designated as the coordinator for the project, and admissions were to be staggered over three years from 2019 to 2021.
As per the website, an average of 20 candidates were selected in the three annual rounds of application for the doctoral fellowship.
Three years after the launch, there are 35 students enrolled in 15 IITs under this programme.
At an international webinar on India-ASEAN cultural linkages on October 8, the project coordinator, IIT-Delhi’s professor Nomesh Bolia, stated that the timing of the launch of the project had led to many challenges.
Within six months of the launch, the coronavirus pandemic started to shut down national borders.
“We would have wanted much, much more. There are provisions for a lot more, but the pandemic has hit us badly,” he said.
Along with COVID-19, there were other challenges such as English language skills and even internet connectivity to interview candidates.
“There were all kinds of issues… everything starting from the candidate not having good connectivity during the interview round to panels having to do phone interviews as the internet was not available. Even after selection, candidates could not join for a whole lot of issues at their end,” he said. However, Bolia expressed optimism that admissions would pick up as the impact of the pandemic subsides, and international travel returns to normal.
Following the summit on Thursday, ASEAN asked India to look at “possible expansion of the programmes for Bachelor’s and Master’s Degrees”.
No MoU signed for ASEAN-India Centre
At the 2012 commemorative summit, the vision statement announced the setting up of an ASEAN-India Centre that would be a resource destination for promoting trade, investment, tourism and people-to-people exchanges. Next year, it was opened as a division within the MEA’s economic think-tank, Research and Information System (RIS) for Developing Countries.
It had been originally envisioned on the lines of resources centres that ASEAN had collaborated to open with other dialogue partners. The centres hosted by different countries were based on an inter-governmental memorandum of understanding signed with the ASEAN secretariat and included staff from ASEAN member states.
The discussions over the governance and operation of the centre spilled over into the NDA period. It had been part of the ‘Plan of Action’ for 2016-20 under the ‘political cooperation’ section.
At the 2016 and 2017 ASEAN-India summits, the ASEAN side brought it up. The chair’s statement at the 2017 summit pushed India for an “early signing” of the MoU.
According to sources, the text of the MoU had been nearly finalised and ready to be signed when it was shelved by the Indian side unwilling to give up control over the centre. “ASEAN countries were rather upset as the MoU had been negotiated and ready. They raised it multiple times,” said a diplomatic source.
ASEAN studies centre in North-Eastern Hill University
During his visit to Kuala Lumpur in 2015, Modi said at the opening of the ASEAN-India summit that he deeply valued “collective efforts to revive the cultural pillar of our relations”. “An international conference on ASEAN-India cultural links was held in New Delhi in July. We are proposing to open an ASEAN Studies Centre in our North-Eastern Hill University (NEHU) in Shillong,” he announced.
It was officially launched eight months later on ASEAN’s foundation day in 2016.
Five years on, the study centre doesn’t exist anymore.
Speaking to The Wire, C. Joshua Thomas, former coordinator for the centre and deputy director of Indian Council for Social Science Research (ICSSR) till last year, confirmed that the ASEAN studies centre is no longer functional. The previous website of the centre is not available on NEHU’s portal. During his last visit to Shillong, he observed that the signboard for the centre had also been taken down.
Thomas, who superannuated last year, had hoped to model the centre on the Asian studies centre in Thailand’s Chulalongkorn University. “Ultimately, I didn’t get the support that was required. The centre became a victim of the tussle between the host university and ICSSR.”
There had also been several delays in releasing funds from the MEA. In the first year, the money came in August. But during the next two years, the funds were available only in the last few months of the financial year.
India’s lines of credits
There is no indication that there has been any substantive utilisation of the line of credit for $1 billion for connectivity projects in ASEAN, announced by Modi in 2015.
In January 2018, then MEA’s secretary (east) Preeti Saran had noted, in an answer to a question on the utilisation of the line of credit, that it “takes time” for countries to finalise projects. “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 stated.
An Indian Express report of March 2018 also observed that none of the countries had come forward to utilise the soft loan. It quoted unnamed Department of Telecom officials saying that EXIM bank procedures were extremely “cumbersome”.
In the latest 2021 ASEAN-India summit, the chairman’s statement had a bland reference to the long-standing line of credit. “We also looked forward to concrete cooperation in sustainable infrastructure, including through capacity building activities and enhancement of investment and business environments. In this regard, we welcomed India’s proposal to utilise its line of credit of $1 billion for supporting physical and digital connectivity projects,” said Brunei Darussalam’s Sultan Haji Hassanal Bolkiah.
The Indian prime minister’s statement also has no reference to the line of credit of $1 billion, even though it had been part of his remarks at the same platform last year.
Sources have indicated that there still has not been any major pick-up in utilising the lines of credit. They point out that the region gets offers from multiple countries and financial institutions, so the Indian loan has to have exceptionally attractive terms.
There is also hesitation among the targeted countries to sign the sovereign guarantee required to avail the line of credit from Exim bank, added diplomatic sources.
The Highway of Hope, paved with delayed deadlines
First greenlighted in 2002, the India–Myanmar–Thailand Trilateral Highway is the proposal for a 1,360 kilometres-long road connecting Moreh in Manipur to Mae Sot in Thailand via Bagan in Myanmar. The road component of the highway would finally be completed in 2022-23, a delay of eight years from the initial deadline.
However, it may not be enough. A report published this month by the ASEAN-India Centre at RIS noted that the work on the 69 bridges on the route are yet to start after it was delayed due to litigation at Manipur high court. “Without the completion of the bridges, the Trilateral Highway cannot be made operational for cargo vehicles and passenger bus services between India and Myanmar,” it said.
Further, there is no sign that the motor vehicle agreement (MVA), which is supposed to decide the soft infrastructure for the movement of vehicles, will be finalised before the trilateral highway is completed in the first half of next year. “Without the MVA, the Trilateral Highway will be non-operational,” said the report.
It noted that despite the criticality of the agreement, “the reality is that progress in the negotiation of the MVA between India, Myanmar, and Thailand for the Trilateral Highway has been slow”.
In 2018, the Indian government commissioned a study from the Economic Research Institute for ASEAN and East Asia (ERIA) on the extension of the Trilateral Highway to Cambodia, Laos and Vietnam.
Briefing the media after the 18th ASEAN India summit on Thursday, secretary (East) Riva Ganguly Das stated that the “report is also ready and we are waiting for a response from ASEAN on how to proceed further on this”. The ERIA report had been finished before the 2020 summit, as its completion had been acknowledged in the chairman’s statement last November.
Reminding that there are other long-standing connectivity pacts that have yet to come to fruition, the chairman’s statement also affirmed support for efforts towards “initiating discussion on the ASEAN-India Air Transport Agreement (AI-ATA) and the ASEAN-India Maritime Transport Agreement (AI-MTA)”. These agreements have been under negotiations since 2013 and 2011, respectively.