India Looks East

Strategic Vision vol. 7, no. 39 (August, 2018)

Modi’s visit to Southeast Asia reflects India’s growing interest in the region

Manoj Kumar Panigrahi

Indian Prime Minister Shri Narendra Modi inspects an honor guard during a ceremonial reception in Putrajaya, Malaysia.

photo: Government of India

May 2018 ushered in a new chapter in India’s Act East policy. Prime Minister Narendra Modi embarked on a tour through Southeast Asia with stops in Indonesia, Malaysia and Singapore. This not only added up to another push for Indian engagement in Southeast Asia, but it also showed a renewed interest by the three countries toward the growing Indian market. Modi’s visit comes at a time of growing uncertainty in the region about the militarization of the South China Sea (SCS). A Sanskrit mantra, Vasudhaiva Kutumbakam, which means, “the world is one family,” has been used by Modi to deliver his message to the region. Being home to one of the world’s oldest civilizations, India has maintained links to Southeast Asia since ancient times. In more recent history, former Prime Minister Jawaharlal Nehru’s Non-Aligned Movement counted Indonesia’s former President Sukarno as an important supporter.

Despite having such strong bonds, India and Southeast Asia have not been able to live up to expectations. The 1962 border war with China and nuclear tests by India reduced India’s standing among Southeast Asian nations: India began to be seen as a country with expansionist ambitions.

Right after coming to power, Modi rebranded the previous Look East policy, initiated by PM Narasimha Rao in 1991, into the Act East policy, demonstrating a fresh approach from the Indian side toward Southeast Asia. India has since been trying to play an active part in Southeast Asia, both bilaterally and multilaterally through regional organizations. This article will assess Modi's recent three-nation visit and analyze the importance of the visit, as well as benefits and challenges for the countries involved.

Paying homage

On the first leg of his tour, Modi launched in Indonesia on his first official visit there. He began by paying homage to the martyrs of Indonesia's freedom movement at Kalibata Heroes cemetery, which showed the importance of the shared colonial history of India and Indonesia.

In a visit marked by many firsts, Modi then met with President Joko Widodo in Jakarta. It should be noted that in 2019, both Modi and Widodo will be facing re-election. Bold decisions on the part of these leaders might help to demonstrate power and resolve to their respective constituents.

One of the most important exchanges of the visit was Indonesia's offer of joint development of the Sabang port, at the northern tip of Sumatra. Sabang sits at the entrance to the Strait of Malacca, one of the world’s busiest sea routes of trade. This was not only a major milestone for both sides, but it also signaled a growing acceptance of India’s role and presence in Southeast Asia. Predictably, China responded to India’s presence with a warning. The Global Times, the official newspaper of the Chinese Communist Party, remarked in an article that, “India’s investment in Southeast Asian ports is photo: Michael Macleod welcome, but if new infrastructure facilities financed by India in those ports are designed for many use, China can take various counter-measures.

US and Indian soldiers stand during ceremonies for Indo-US joint training Exercise Yudh Abhyas.

photo: Michael Macleod

"At the least, Beijong can adopt the same measures in the Indian Ocean", the article warned. This response should not be too surprising, as Beijing has been building strategic ports in the Indian Ocean for several years. Beijing's response is also motivated by the "Malacca Dilemma", whereby policy leaders are concerned about China's over-reliance on the strategic trade route and possible disruption thereof.

Widodo and Modi also agreed to include cooperation in science and technology, capacity building of public officials, and cooperation in railways and air transport, among others. Both countries also emphasized the importance of a rules-based approach to maintaining peace in the Indo-Pacific region. India has historically maintained its position and core policy of seeking to maintain peace around the world.

In Malasya, Modi met his counterpart, the newly elected Prime Minister Mahathir Mohammad, and congratulated him on his win in the general elections. The two leaders maintained that both sides are committed to further strengthening the bilateral relationship. Modi also met Deputy Prime Minister Wan Azizah Wan Ismail and her husband, Anwar Ibrahim, the de facto leader of the Pakatan Harapan coalition, at the Bunga Raya Complex at Kuala Lumpur International Airport. This may signal future collaboration between Indian and Malaysian companies in airport infrastructure.

India remains Malaysia’s largest trading partner in South Asia, with total trade amounting to US$14.7 billion in 2017. In addition to trade, India and Malaysia are developing ties in the tourism and defense sectors. There are challenges and disagreements that remain between the two nations, however. Zakir Naik a, controversial Islamic preacher from India, recently received a permanent residence permit in Malaysia. New Delhi had asked Kuala Lumpur to extradite Naik for inciting youths in India to support terrorism. However, Malaysia politely denied India’s request. Mahathir’s refusal to extradite Naik created an uneasiness in Malaysia’s coalition government. Three ethnic Indian ministers in Malaysia’s government, including the Minister of Human Resources M. KulaSegaran, as well as leaders of the Democratic ActionParty, a party in the current coalition, raised objections to Mahathir’s refusal to extradite Naik. Given that three ethnic Indian ministers opposed Mahathir’s decision, there is a possibility that this could cause some suspicion about possible Indian influence in Malaysian politics, as politics in Malaysia is often ethnically charged.

“India ranks 100 out of 190 for ease of doing business, which hampers greater involvement in trade.”

On the last leg of his tour in Singapore, Modi met Singapore’s President Halimah Yacob and Prime Minister Lee Hsien Loong, where they discussed various issues. Modi unveiled a plaque where Mahatma Gandhi’s ashes were taken, and he visited the neighborhood known as Little India, where a large number of ethnic Indians live. The two countries signed a digital-payment services agreement, which will make it easier for digital transactions to be conducted between the two countries. Modi also visited the Changi Naval Base to meet the sailors aboard the Indian Navy ship INS Satpura, which was on a routine port call in Singapore.

An Indian Air Force Su-30MKI fighter lands at Eielson Air Force Base, Alaska on April 16, 2016, in preparation for Red Flag-Alaska 16-1.

photo: Joshua Turner

Modi also attended the 17th Shangri-La Dialogue and delivered a keynote address, making him the first Indian prime minister to have done so. During his address, he opined that an “Asia of rivalry” would hold the region back, whereas an Asia defined by cooperation would better shape the current century. Singapore has been strategically very important for India, welcoming India’s involvement in the region in the past. Singaporean defense forces conduct regular training in India. Many cities look toward Singapore to help develop the Smart City project. Both sides have repeatedly showed positive signs to deepen ties with each other.

Remaining challenges

Although there have been many positive developments to increase ties, a number of challenges remain. First, doing business in India is still difficult. According to the World Bank, India ranks 100 out of 190 for ease of doing business, which hampers greater involvement in trade and other economic activities with its neighbors and others. India is still the ninth largest trading partner of the Association of Southeast Asian Nations (ASEAN).

Second, is the red tape. One example of this problem with bureaucracy is the long-proposed trilateral highway between India, Myanmar, and Thailand, which later saw proposals to extend it to other Southeast Asian countries. This project is still under construction and its completion date, now set at 2021, has been pushed back repeatedly.

Third, there is the risk of India getting involved in regional disputes. India has begun to engage in military and security cooperation with some Southeast Asian nations. Countries such as Vietnam have shown an interest in acquiring Indian military hardware and India has been regularly training Vietnamese sailors and aviators in its military facilities.

The Indian navy frigate Satpura (F-48) transits the Indian Ocean during Exercise Malabar 2012.

photo: Christopher Farrington

The Indian navy has also made several appearances in the region, and this has not gone unnoticed by China, which has been working hard to secure de facto control over the South China Sea. In July 2011, an Indian Navy vessel was challenged by a caller identifying themselves as the “Chinese Navy,” who informed the vessel that it was “entering Chinese waters.” In fact, the incident occurred in international waters, a mere 45 nautical miles off the coast of Vietnam.

An F-35B lands on the USS Essex ampibious assault ship during operations in the Indian Ocean.

photo: Matthew Freeman

Risk of miscalculation

More recently, Indian warships en route to Guam to participate in the 2018 Malabar military exercise were tailed by Chinese naval ships until they crossed from the Philippine Sea into the Pacific Ocean. In response, the Indian government made repeated statements that such events took place in international waters, where China has no jurisdiction. Due to apparent differences in perceptions over what counts as acceptable maritime operations, the risk of miscalculation between Chinese and Indian forces has increased.

Fourth, the traditional and non-traditional security issues in the region have hampered development work and sowed mistrust among nations. The different claims and perceptions toward the South China Sea among the claimant nations have created a lack of coordination and mistrust. The recent Rohingya refugee problem has produced a significant burden for Thailand, which has been hosting refugees from Myanmar since 1988.

There are several ways in which India can further strengthen its Act East policy. First, it could fast-track economic policy reforms to strengthen economic ties with ASEAN. Second, it needs to remove the red tape from its bureaucracy, with internal reforms needed to follow up. Third, it must reduce delays in development projects: Indian leaders have mentioned that the North East Indian states are active stakeholders in India’s Act East Policy. The Northeast region needs to be developed in a way that integrates the region with India’s Act East Policy.

Fourth, there should be greater integration of intelligence sharing among the security agencies of the countries in the region. This will help reduce transnational crime and terrorism, and help foster coordination during humanitarian disasters.

Manoj Kumar Panigrahi is a PhD candidate in the International Doctoral Program in Asia-Pacific Studiesat National Chengchi University in Taipei. He can be reached at into---mankupani@gmail.com