Extending the Olive Branch: China-Australia Relations – Modern Diplomacy

In this long essay, I look at how India re-connected with Southeast Asia and its regional institutional mechanisms in the post-Cold War context. This 30-year process had its own challenges and is continuing to evolve by adding newer dimensions and layers of engagement.

Year 2022 marks 30 years since India first became a sectoral dialogue partner of the ASEAN (Association of Southeast Asian Nations), and it is observed by both sides as the ASEAN-India Friendship Year. Southeast Asia is located in New Delhis extended neighbourhood and lies at the centre of the Indo-Pacific, both geographically and strategically. Today, India and the ten ASEAN member-states together hold about two billion people, which is roughly 30 per cent of the worlds population. During the Cold War years, most of countries in the region were formally or informally part of the Western-led system of alliances, which acted as a constraining factor for non-aligned India to cultivate robust ties with the region, particularly at the multilateral level.

The disintegration of the Soviet Union, a key strategic partner of India hitherto, in 1991 left a huge void in its diplomatic and geostrategic space. This was one of the key driving factors that led New Delhi to formulate its Look East policy in the same year, which was rechristened and reinvigorated as Act East policy in 2014. India was made a full dialogue partner of the ten-nation grouping in 1996, and six years later, in 2002, regular annual leaders summits were initiated, of which the latest in the series was held last year. In the early years since the opening of dialogue relations, the focus was placed on the economic dimension of ties, which diversified into commercial, security and strategic dimensions, in the course of time.

A decade ago, in 2012, India-ASEAN relations were upgraded to the level of strategic partnership. The two sides operationalised a free trade agreement in goods in 2010 and another agreement on services and investment four years later. In 2015, India set up a separate Mission to the bloc and its related forums like the East Asia Summit (EAS) in Jakarta, where the ASEAN is headquartered, to strengthen its engagement with the grouping and the regional processes centred on it. Later in 2018, in a truly historic diplomatic rendezvous, the leaders of all the ten ASEAN countries were welcomed as chief guests for Indias Republic Day celebrations in New Delhi.

Soft power edge

A changing world order, combined with the economic liberalisation of the early 1990s, necessitated New Delhi to look for new friends and new sources of economic capital and investment elsewhere to fill the void left by Moscow. Southeast Asia seemed to be a promising and easy-go destination. However, Indias engagement with the region is not something new, and in fact, it goes centuries back, the background of which is important to get a broad perspective on India-ASEAN ties. India has an immense amount of soft power in the region via its centuries-old Buddhist and Hindu civilizational linkages, which also happen to converge which the Sinic civilizational heritage as well.

Indian epics of Ramayana, the Mahabharata and Buddhist literature such as the Jataka Tales are still popular in many Southeast Asian countries and several tourists arrive in India from the region for religious, business, and leisure reasons. Before 1991, India had three waves of engagement with Southeast Asia since the first century C.E., transitioning through ancient, medieval, colonial, and post-colonial stages. The first wave had cultural, commercial and imperial dimensions when Buddhism reached the region via land from India and a further outreach occurred due to the expansionary policies of Tamil thalassocratic powers like the Chola Empire that extended its influence in maritime Southeast Asia, lasting until the 13th century C.E.

After a brief period of disruption in the late medieval era following the Islamic invasions into the Indian subcontinent, the second period began during the British Raj era, which saw colonial expansion and a new dimension of commercial and imperial ties. The third wave began after Indias independence from the British in 1947, which continued till 1991. As Western powers retreated from Asia following the Second World War, India tried to assert its regional role by building solidarity with the post-colonial states of eastern Asia. This period saw key initiatives under Indian leadership such as the convening of the Asian Relations Conference of 1947 in New Delhi and the Bandung Conference of 1955 in Indonesia.

However, due to the prevailing Cold War geopolitical imperatives, Indias active role in the Non-Aligned Movement (NAM), and its limitations as an economic and military power constrained New Delhis options to proactively engage with Southeast Asia. The Look East policy of 1991, in fact, constituted a fresh fourth wave of Indias engagement with the region, or re-engagement. Today, the Indian diaspora in Southeast Asia constitutes about 20% of the countrys total diaspora population around the world, numbering 18 million. This fact also plays a significant role in strengthening India-ASEAN relations.

Bridge to Asian regionalism

Since the late 1960s, Southeast Asia has been known for cultivating active mechanisms of regional integration that was brought about by the founding of the ASEAN in 1967 by five countries, namely, Thailand, Malaysia, Singapore, Indonesia, and the Philippines. Later, Brunei, Vietnam, Laos, Myanmar, and Cambodia too joined the bloc, in order, bringing the total membership to 10 countries. India shares a land and maritime border with Myanmar and an exclusive maritime border with Indonesia via the Andaman and Nicobar Islands. Cosying up with ASEAN in the post-Cold War context meant heralding in a new era of engagement with Asias regional institutions, mechanisms and processes.

The ASEAN Regional Forum (ARF) is a ministerial-level diplomatic platform set up in 1993 soon after the Cold War ended, including all countries that had been engaging with the ASEAN. It is the largest and the oldest of all ASEAN-centred institutions and has 27 members, which includes the ten ASEAN member-states, its ten Dialogue Partners, and seven other countries. India became a member of the ARF in 1996. The forum held its 28th annual meeting last year, wherein India co-chaired a workshop on implementing the UNCLOS (United Nations Convention on the Law of the Sea, 1982). The founding objectives of this forum include the fostering of constructive dialogue and consultation on political and security issues of common interest and concern and to make significant contributions to efforts towards confidence-building and preventive diplomacy in the Asia-Pacific region.

Similarly, the ASEAN Defence Ministers Meeting Plus (ADMM-Plus) is yet another platform under the ASEAN framework involving its eight Dialogue Partners, namely, Australia, China, India, Japan, New Zealand, Republic of Korea, Russia and the United States (collectively referred to as the Plus Countries), towards the goals of strengthening security and defence cooperation and ensuring peace and stability in the region. The inaugural ADMM-Plus was convened in Hanoi in 2010. The ADMM-Plus has been meeting annually since 2017 to allow enhanced dialogue and co-operation within the grouping and with the Plus Countries to collectively deal with common security challenges facing the region.

India is one of the founding members of the East Asia Summit (EAS), another ASEAN-centred diplomatic forum formed in 2005. It emerged out of the ASEAN-plus-Six mechanism, including the ten ASEAN member states, China, Japan, South Korea, India, Australia and New Zealand. Later, Russia and the United States too joined the EAS in 2011, bringing the total membership to 18 countries. The EAS is one of the most crucial components of the ASEAN-led regional framework, primarily because of the contribution it makes in building an environment of strategic trust in the region. Today, the EAS countries represent more than half of the worlds population and accounts for 58% of the global GDP.

India is committed to strengthening the EAS and continues to contribute positively to the forums goals. At the 14th East Asia Summit in Bangkok in 2019, Indias Prime Minister Modi announced a new initiative for regional cooperation, known as the Indo-Pacific Oceans Initiative (IPOI), aimed at building new partnerships to create a secure and stable maritime domain in the region. It rests upon seven key pillars, namely, maritime security, maritime ecology, maritime resources, capacity building and resource sharing, disaster risk reduction and management, science, technology and academic cooperation, and trade connectivity and maritime transport.

Since India was not one of the Pacific Rim countries, it couldnt be part of the 21-member Asia-Pacific Economic Cooperation (APEC), formed in 1989, or any other trans-Pacific groupings formed later. Other sub-regional groupings which India engages with selected Southeast Asian countries include the 1997-founded Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) and the 2000-founded Mekong-Ganga Cooperation (MGC) groupings.

Trade and connectivity woes

Beyond diplomacy, diaspora and cultural ties, there is the aspect of trade. India had signed a free trade agreement (FTA) in goods with the ASEAN in 2009, known as the ASEAN-India Free Trade Agreement (AIFTA). It was operationalised the very next year. Later, another agreement on services and investment was signed in 2014 which became effective in the following year. It is now known as the India-ASEAN Comprehensive Economic Cooperation Agreement. However, ever since India entered into these two FTAs, its trade deficit had risen as imports from the region sharply rose in comparison to its exports to the region.

The value of trade between India and the ASEAN region amounts to over $78 billion (in 2021). Amid exports that moved in a narrow scale, Indias trade deficit with the ASEAN has widened from $5 billion in 2010-11 to $23.8 billion in 2019-20, while Indias imports from the region have nearly doubled between 2011-12 and 2018-19. So, Indias terms of trade with the ASEAN have worsened in the last one decade. Due to this scenario, India has been calling for a review and renegotiation of the AIFTA and has been seeking more market access for its domestic products.

There is an impending non-reciprocity in FTA concessions, non-tariff barriers, import restrictions, quotas and export taxes from ASEAN countries. India badly needs to reconfigure its trade equation with the ASEAN in the direction of maintaining a sustainable balance of trade. It is these same realities, combined with the fear of cheap products from abroad dominating Indian markets at the cost of domestic producers and traders that prevented India from joining the Regional Comprehensive Economic Partnership (RCEP), a couple of years ago.

Connecting Indias north-eastern states with ASEAN has always been a key imperative for Indias policy choices. Although India-ASEAN relations has improved steadily since 2014, with the operationalisation of the Act East policy, the implementation of several flagship infrastructure and connectivity projects such as the Kaladan Multi-Modal Transit Facility, connecting Indias West Bengal and the north-eastern states with Myanmar, and the India-Myanmar-Thailand Trilateral Highway is moving at a snails pace, due to persisting bureaucratic hurdles. Hence, the ties boosted after 2014 did not fetch substantial gains, as expected, in improving inter-regional trade or connectivity via land and sea.

Chinas maritime presence in the Bay of Bengal and the Indian Ocean regions, Indias backyard, such as in Myanmars Kyaupkyu, Bangladeshs Chittagong, and Sri Lankas Hambantota has compelled New Delhi to seek deeper and stronger relations with like-minded countries in Southeast Asia and recently the Quad countries (U.S., Japan, India, and Australia) for maintaining a favourable regional balance of power.

Finding own space amid regional rivalries

Last decade witnessed Southeast Asia turning out to be a major arena of U.S.-China geopolitical rivalry. Both China and the U.S. are trying to lure ASEAN countries to their respective sides by extending their influence, the former with its grand economic prospects and the U.S. through its reassurances on the regions security. The initiation of new economic partnerships and the promise of new investments in infrastructure development such as the Build Back Better World initiative, the Blue Dot Network, the Indo-Pacific Economic Framework for Prosperity and the Indo-Pacific Partnership for Maritime Domain Awareness, the last two being unveiled in the recently-held Quad summit.

The ASEAN, however, is committed to avoid being caught up in between great power competitions and is too averse in taking sides. They just want to maintain the region as a zone of peace. It is in the direction of achievement of this policy, ASEAN member-states signed the Bangkok Treaty in 1995 and declared Southeast Asia as a Nuclear Weapon-Free Zone (NWFZ), thereby committing themselves to keep the region free of nuclear and all other weapons of mass destruction. It is also known as the Treaty of Southeast Asia Nuclear Weapon-Free Zone. Today, Southeast Asia continues to be one of the five NWFZs in the world, even though the region lies in close proximity to nuclear-weapon states to its borders.

Even though India is one of the top-five regional powers in Asia, the United States and China continues to occupy significant space in the regions power equations. It is said that hard power and economics always triumphs over soft power. This is exactly the case for India in its attempts to extend its influence in the ASEAN vis--vis the capabilities of the aforementioned two great powers. While India observes 30 years of establishing dialogue relations with the ASEAN this year, China commemorated it last year, in 2021. Southeast Asia lies in Chinas immediate neighbourhood and it has a looming maritime dispute in the South China Sea with at least five ASEAN member-states. But despite this fact, China continues to be ASEANs largest trading partner since 2009, while India stands the fifth.

The 21st Century Maritime Silk Road is an ambitious Chinese mega-project that is part of the larger Belt and Road Initiative (BRI), in which Southeast Asia is a key link to connect China to the world. It was announced by President Xi Jinping during his maiden visit to Indonesia in 2013 and most of the ASEAN countries are part of this China-led project, despite the maritime dispute. Moreover, several Southeast Asian countries have been taking part in the 2002-initiated Boao Forum for Asia (BFA), held annually in the permanent venue of Boao town in Chinas southern Hainan province, which hosts high-level dialogues of leaders from the government, business and academia from around the world, and is dubbed as the Asian Davos.

In the recent years, ASEAN data show that its member-states have become more and more dependent on China for trade. All member states, except Singapore, have trade deficits with China today. But ASEAN countries are well aware that depending too much on Beijing would mean that they can be susceptible to Chinese bullying in the regions disputed waters. This is where the role of the United States has to be taken into account. Washington has maintained its military presence in the region for decades now. Right from the World War years, the U.S. has maintained its naval forces in Southeast Asia as an extension of its overwhelming presence in the Pacific, but Chinas military is fast-modernising too, to catch up with the U.S. power, not only regionally, but globally as well.

This U.S.-China great power rivalry is most visible in the South China Sea, that lies in between Southeast Asia and Chinas southern coastline, where Washington frequently conducts freedom of navigation operations (FONOPS) to challenge Chinas unlawful claims that pose a serious threat to the sovereignty and territorial integrity of ASEAN nations. India too has wider stakes in the South China Sea, as nearly 55% of Indias trade with the Indo-Pacific region passes through these waters. New Delhis interest is primarily to keep the regions trade routes safe and secure, thereby upholding regional stability, freedom of the seas, and a rules-based maritime order.

Amid this ongoing scramble for influence in the region, the Indian Navy hosted Exercise Milan, a multilateral naval exercise off the coast of the south Indian port city of Vishakhapatnam, held earlier this year, with more than 40 navies from around the world participating, including the U.S. Navy. Of these, Singapore, Thailand, and Indonesia have been participating since the inaugural edition of the exercise in 1995. The Indian Navy is a crucial player in the region and frequently engages in bilateral naval exercises and passage exercises (Passex) with the naval forces from South China Sea littoral states, including Singapore, Vietnam, Indonesia and the Philippines.

Lately, ASEAN-member Philippines has entered into a key defence pact with India, signing a $375 million deal to buy India-made BrahMos missiles, chiefly to secure its coastal defence against rising Chinese belligerence. This deal has a consequential bearing on India-China ties, India-ASEAN ties, and Philippines-China ties as well. Indias External Affairs Minister Dr S. Jaishankar paid a visit to the Philippines, in February this year, two weeks after the BrahMos deal was agreed upon. Interestingly, even though Indian and American interests converge in Southeast Asia and the broader Indo-Pacific, the BrahMos is an Indo-Russian joint venture. This has set a precedent for other threatened countries like Vietnam to follow.

At the same time, as Chinas presence continues to grow in Indias backyard, New Delhi is compelled to give reciprocal signals by augmenting its own naval presence in Chinas backyard, as Indian naval vessels regularly call on Southeast Asian ports underlining its operational reach, readiness, and solidarity with friendly states in the region. While Indias Act East policy seemingly struggles in swift and timely implementation of specific projects, there is a convergence of interests with Southeast Asian countries with regard to being subjected to Chinese power projection in the recent years.

ASEAN, as a whole, is a formidable economic force in the world today and has a promising future ahead. People-to-people ties and cultural links with Southeast Asia will always be in Indias favour. But, the real challenge for New Delhi is adapting to an ever-changing and uncertain geopolitical environment and regional power dynamics, how competitive its economy can be, how far it can play the role of a constructive player in the regions security, and how proactively it can deliver on its policy promises, particularly with regard to trade, infrastructure, and connectivity. If these dont go smoothly, I suspect whether soft power edge alone can ensure a favourable strategic space for India in the region, which is faced with increased competition and scramble for influence, particularly when economic dynamism is already a criterion of competition between India and the ASEAN, rather than of co-operation.

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Extending the Olive Branch: China-Australia Relations - Modern Diplomacy