International Policy Digest

World News /25 May 2020
05.25.20

The ‘Russia Factor’ in India’s Act East Policy in Southeast Asia

With the collapse of the Soviet Union and a weakening national economy, the Look East Policy was established in 1992 under the administration of Indian Prime Minister Narasimha Rao. The Look East Policy was a major cornerstone of India’s foreign policy right after the Cold War. It aimed to enhance India’s interstate relations with its neighbors in Southeast Asia with a multidimensional platform. The Look East Policy encompassed economic, strategic, and political levels of engagement and showed India’s commitment towards developing stronger ties with its neighbors.

India became a full dialogue partner of the Association of Southeast Asian Nations (ASEAN) in 1995 and a member of the ASEAN Regional Forum (ARF) in 1996. The Look East Policy created a positive and constructive environment between India and Southeast Asia. The states of the region looked positively towards the development of the policy because of the possible economic benefits it could bring. In addition, some states in the region began looking at India as a potential counterweight to China. However, during this time, India’s economy was staggering, and the concept of trade liberalization was also quite novel to the South Asian state. Additionally, India lacked connectivity projects and was also troubled with its domestic issues. As a result, the intended results from India’s Look East Policy did not go as planned which led to the disappointment of Southeast Asian states.

When Prime Minister Narendra Modi headed the Indian government in 2014, he emphasized that his administration would pay special attention to India’s relations with Southeast Asian states. Furthermore, Modi established the Act East Policy which served as a more active and invigorated version of the Look East Policy. Considering that India was better placed economically during that period, the Act East Policy gave out positive aspirations to many. To illustrate its commitment under the newly established policy, New Delhi set up a mission to ASEAN in April 2015 and sent a high-level delegation led by former Minister of Defense, Manohar Parrikar, to the Shangri-La Dialogue in June 2016.

Land and sea connectivity projects have also been highlighted as a priority of the Act East Policy. At the 13th ASEAN-India Summit in 2015, Modi announced a line of credit of $1 billion for connectivity projects in Southeast Asia. Major projects such as the India-Myanmar-Thailand Trilateral Highway and the Kaladan multi-modal transit and transport project are being developed. Trade between India and ASEAN has also considerably developed from $65 billion to $97 billion. Aside from trade and connectivity, the Act East Policy also focuses on strategic engagements. India has been steadfast in cooperating with the region on the military level which includes counterterrorism and maritime cooperation. However, what is interesting is that Russia can also play a major role in boosting the strategic component of India’s Act East Policy.

Russia has overtaken the United Kingdom in 2018 as the second-largest arms producer in the world. Russia has also cemented its role as the top arms supplier in the region. Between 2010 and 2017, the region bought $6.6 billion of Russian arms which accounted for more than 12 percent of Russia’s sales. There are reasons as to why Russian arms are a big hit in the region. First, Russian arms are significantly cheaper than arms sold by the United States. However, despite the price difference, Russian arms are known for their superior performance and quality. Second, the substantial economic growth of the region over the years contributed to their purchasing power for arms and defense equipment. Third, the assertive stance of China in the region has catalyzed the region to enhance its defense capabilities to secure its interests in the region.

India is a prominent and major buyer of Russian-made equipment. Moreover, the Indian armed forces are well known for operating and maintaining Russian equipment with a significant level of efficiency. India has also built sophisticated facilities for the training and repair of Russian systems. As a result, India can leverage on its expertise in dealing with Russian equipment by offering training and maintenance services in the region. This is not completely new for India as it has done similar projects in the past with Vietnam and Malaysia. However, as Russian defense sales are expected to grow in the region, India can simultaneously play a formidable role in strengthening its strategic and defense ties with the rest of the states in Southeast Asia.