Speaker: Ambassador G Parthasarathy
Chair: Dr. Manmohini Kaul
Associate Professor, School of International Studies, JNU

Any discussion on developments in India's neighbourhood has to start with a definition of the neighbourhood. A neighbourhood can be loosely defined as being in the geographical proximity, including places where developments can have serious implications for Indian security considerations. This notion has been very much prominent in India's former Prime Minister, Atal Bihari Vajpayee's articulation of the 'extended neighbourhood,' or of India's strategic frontiers. Viewed in this perspective, India's neighbourhood extends to Central Asia in the north, East Asia including Southeast Asia in the east and the Persian Gulf region in the west.

India and the ASEAN

The rationale for India's economic integration with the East and Southeast Asian economies emanates from the urgency of overcoming its economic autarchy, taking advantage of the process of global integration, and regaining its international economic influence, which it had enjoyed during the early 1950s. India's economic policy of import-substitution and its policy of neo-isolationism brought down India's share in the global trade from about 2 percent at the time of Independence to about 0.5 percent now. India's per capita income during the 1950s equaled that of Thailand and could be compared with South Korea. After 50 years, the gap has gone up. Region to the east of India has been the fastest growing region in the last three decades. Despite all the projection of India as a regional power, it has remained a pygmy. Vietnam can beat India in the agricultural sector.

India's Look East policy, the Bay of Bengal Initiative for Multi Sectoral Technical and Economic Cooperation (BIMSTEC) and Myanmar as a land corridor to Southeast Asia hold the key to India's integration with the region. An important aspect of this process of integration is the role of provinces on India's eastern seaboard as a key link. Orissa has expressed its desire to forge greater linkages with Indonesia whereas Tamil Nadu and Karnataka are already engaged in economic and cultural interactions with Singapore, further cementing India's natural linkages with the region.

India has also benefited from the substantial level of discomfort and fear among Southeast Asian countries with regard to China owing its big size and domineering image, and Japan for its World War II colonization campaign. Though India, due to its benign image and its growth potential, is welcomed, the level and range of cooperation will depend considerably on how India engages with its ASEAN partners.

India has embarked on developing infrastructural linkages with Myanmar and other mainland Southeast Asian countries. Road and rail connectivity projects are underway, such as the road project connecting Tamu with Kalemyo. The viability of a railway project extending up to Hanoi is being discussed. India, under 'Tamanthi Project,' is developing a hydro-electrical power plant on Kalemyo river in Myanmar, through which electricity will be provided to India's northeastern states. Unfortunately, the process of engagement has suffered from too much bureaucratic interference, absence of provincial representation in the negotiations and lack of entrepreneurship. For example, while finalizing the first draft of a border trade agreement with Myanmar, India's senior officials emphasized on the payment to be settled through the Asian Clearing Union despite the degree of sophistication in local trade dealings. This is one of the reasons why India-Myanmar trade has not picked up compared to the level of trade between China and Myanmar.

India and China

China has a sophisticated policy of "simultaneous engagement and containment" vis-a-vis India. The rationale for its engagement policy emanates from China's maritime rivalry with at least six countries, American presence in the Taiwan Strait and the resurgence of Japanese nationalism. Therefore, it is not in China's interest to have tensions on its borders with India. However, China is willing to cooperate with India on its own terms and only when the latter treats itself as a junior partner of the former. India should be cautious about China's growing hunger for raw material and energy resources, which has led to its strategic presence in the Indian Ocean. Its hunger for energy has, for example, led to China's outbidding India in securing energy supplies from Myanmar.

India and the Gulf Region

There have been close historical ties between India's western provinces and the Gulf region, and today, India's stakes in this region are higher than ever. Indian workers living in the Gulf region, who number 3.8 million, remit around US$15-20 billion to India. 70 per cent of India's oil imports come from Iran and the Gulf and Kerala's economy would collapse if there were any political and economic instability in the region.

The region is also experiencing a growing sectarian divide. Both Bahrain and Iraq have Shia-majority populations and the American invasion has further upset the sectarian equation in Iraq, causing virtual civil war. India's interests in the Gulf region, would be best ensured if the region remains stable; the growing sectarian divide is contained; and India further strengthens its institutional cooperation with the Gulf Cooperation Council (GCC) on a pattern similar to that of India-ASEAN cooperation. As a market of 70 million people with the second largest gas reserves in the world and a major player in the Gulf region, Iran is very important for India's interests. India also shares common interests with Iran in maintaining peace and stability in Afghanistan and is potentially an alternate gateway to Central Asia.

India and South Asia

South Asia as a region is going to remain volatile in the coming years and India will have to deal with the developments in Pakistan and Bangladesh. In the coming years, both China and the US will be assisting Pakistan, militarily as well as economically. Bangladesh is facing a crisis in terms of the direction and approach to the process of nation-building. The refusal to grant transit to India for its northeastern states is a deliberate effort on the part of Bangladesh to undermine any Indian effort to integrate the northeastern states with mainland India. However, there has been a growing recognition in the US and the West about India as a factor of stability in South Asia. This is a major paradigm shift in the Western approach to India.

India should, therefore, stick to the SAARC Vision-2020, which aims at forming a SAARC economic union by 2020 and should get rid of its Pakistan fixation. India should also develop greater linkages with Iran and Afghanistan. India's effort in linking Herat with the Jawahar port in Iran, which will remove Afghanistan's complete dependency on Pakistan for its access to the sea, is an important strategic step in this direction. In Nepal, If India's calculation that the Maoist participation in the government will work, bears out, it would be a great success for Indian diplomacy as well. During the clamping down on the Maoist insurgencies, both China and Pakistan had offered military help to the monarch.

Conclusion

To sum up, there are two pre-conditions, which India has to keep in mind while dealing with its extended neighbourhood. First, it should maintain its pluralistic image. Second, India should keep up its sustained economic growth.

Discussion

Q. What are your views on BIMSTEC?

BIMSTEC predates the formation of India-ASEAN Framework Agreement for Comprehensive Economic Cooperation. The stagnation in the SAARC process prompted Indian decision-makers to develop economic integration with countries in Southeast Asia. Thailand, which had initiated a Look West policy, saw the advantage of cooperating with India. During the bilateral discussions between India and Thailand, the idea of setting up of BIMSTEC was mooted, primarily for connectivity and communication purposes, signifying Myanmar's geo-strategic position as India's land-corridor to Southeast Asia. At the same time, India wanted to involve countries to its east in South Asia. Therefore the idea of littoral states in the Bay of Bengal was put forward. The success of this initiative can be gauged from the fact that for the last ten years, Myanmar has not given any project to China which is west of Irrawady. Historically, India's northeasterners have looked towards Southeast Asia. The BIMSTEC provides a contemporary contextual setting to these historical linkages.

India's main objective in engaging with Southeast Asia has been to make sure that Myanmar and other countries in the region are not overly dominated by China. The key to India's access to ASEAN is Singapore.

The China Factor

Q. What is China's purpose in the infrastructural development in India's neighbourhood and its implications for Indian security?
Q. China has a sophisticated India policy but does India have any coherent China policy?

China's infrastructural presence to India's east and west poses a strategic challenge. China is building a corridor to the Bay of Bengal through its Yunnan province and to its Xinjiang province through Gwadar in Pakistan. Immediately after former Chinese Premier, Zhu Rongji's visit, Pakistan made it clear that in the event of Pakistan's security being threatened, the Chinese navy would also be positioned in Gwadar. China's maritime build-up is a quest to dominate the natural resources flow. Though Chinese naval capacity in the Indian Ocean is not a source of maritime concern, its maritime challenge can not be ignored.

There is no political consensus in India on China. One set of opinions projects China as an expansionist and hegemonistic power, posing a challenge to Indian interests. Another set of opinions focuses on the old slogan of "Hindi-Chini Bhai Bhai." However, the truth lies in between. India also faces strong competition from China in the energy sector. India lost out to China in Angola, Kazakhstan and Myanmar and could get the Sakhalin contract only because Russian President Vladimir Putin supported India's bid.

The West Asian Situation

Q. Given a very unstable situation in the Gulf region, which type of involvement would you want India to have on the ground?
Q. In terms of trade, what should be the methods and strategies of India's economic involvement in West Asia?

India should not take sides in the emerging situation in the Gulf region. Instead, it should focus on two major countries in the region - Saudi Arabia and Iran. India has been invited to the Arab League in Riyadh. 1.5 million Indians live in Saudi Arabia, which is also the second largest oil and gas exporter to India.

India should make its objection very clear to the US and the Western world while working with the Russians and Chinese against military intervention in Iran. A negotiated settlement can be worked out.

The Great Game in Central Asia

Q. Where does India stand in the Great Game in Central Asia?

India values its relations with Russia too much to be drawn into the US game. What concerns India and Russia is the American policy of containing Russia. Despite India's limited geographical access, India is looking to investing in the region especially in the pharmaceutical and steel sectors. Interestingly, most of the technical staff in Kazakhstan are Indians trained in Russia. Issues of security and economic investment would be India's key strategic interests in the region. Given its strategic partnership with Tajikistan, India too shares the latter's concern over the spill-over impact of militancy in Afghanistan. Despite limited access to the Central Asia, India shares a common interest in preventing the radicalization of Central Asia and in developing energy resources.