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l October 2003 l

The Kashmir Bachao Andolan Publication

l Vol 2, No 6 l


Resurgent India in Asia

Yashwant Sinha

Our performance so far has revealed our strengths as well as future areas of growth. It has demonstrated where we can provide leadership and how we can integrate into the global economy. As India’s economic development accelerates, India’s association with Asia will only widen and deepen further.


Asia’s challenge lies in its immense political, economic and social diversity, as also the seemingly unique dynamics of its different regions. A cooperative future global order will inevitably require full Asian participation. With its increasing weight in world economy, Asia holds the key to collective global prosperity and security. Asia’s contribution to world output has doubled since 1950. Both IMF and the World Bank consider that Asia will continue to power global growth in the coming years. We require, therefore, to advance the principles of democracy, development and dialogue, on the basis of respect for pluralism and national sovereignty, as the guiding principles of Asian and global progress.


The primary impulse for this has to come from within the Asian countries themselves. But others, including the United States, have a strong stake in it too. If all major powers in Asia and beyond work together, in a spirit of cooperation rather than competition, to smoothen its fault lines, combat terrorism, counter proliferation of weapons of mass destruction and advance free commerce and political freedoms, we would create a basis for a stable and prosperous Asia that will have a salutary effect on the rest of the world. Guided by this vision, India is working vigorously to strengthen its relations with its Asian partners - with China, Japan, Southeast Asia, West Asian countries and Central Asian neighbours. We have a similar vision of South Asia unshackled from historical divisions, and bound together in collective pursuit of peace and prosperity.


India seeks to promote in Asia in general, and in South Asia in particular, its ethos of pluralism, tolerance, democracy and human rights and by promoting the idea of societies that are multiethnic, multilingual, multi-religious and multicultural.


Eighteen years of the existence of the South Asian Association of Regional Cooperation (SAARC) has so far failed to catalyse significant exchanges among its constituents in the social or economic domains. To shake SAARC from this relative torpor, earlier this year I called for a movement toward a South Asian Union. I believe that a South Asia, with one currency, one tariff regime and free movement of goods, services and people, is well within the realm of possibility. South Asia should emerge as a region with comprehensive air, rail, road and sea linkages. Movement in this direction would lead to softer national boundaries, and eventually, the seven South Asian countries can constitute a single economic space within one system and a single market.


Reaching beyond South Asia, East and Southeast Asia have remained a natural focus of India’s foreign and trade policy. China is a contiguous country and we share land or maritime boundaries, not just with our South Asian neighbours and China, but also with several ASEAN countries such as Myanmar, Thailand and Indonesia. Our historical and civilizational ties also extend to Japan.


In the past, India’s engagement with much of Asia, including Southeast and East Asia, was built on an idealistic conception of Asian brotherhood, based on shared experiences of colonialism and of cultural ties. The rhythm of the region today is determined, however, as much by trade, investment and production as by history and culture. That is what motivates our decade-old ‘Look East’ policy. Already, this region accounts for 45% of our external trade.


The first phase of India’s ‘Look East’ policy was ASEAN-centred and focussed primarily on trade and investment linkages. The new phase of this policy is characterised by an expanded definition of ‘East’, extending from Australia to East Asia, with ASEAN at its core. The new phase also marks a shift from trade to wider economic and security issues, including joint efforts to protect the sea-lanes and coordinate counter-terrorism activities.


Last year, the first India-ASEAN Summit was held at Phnom Penh, Cambodia. The Prime Minister of India suggested in this meeting that India and ASEAN should enter into a free trade agreement. It is a matter of great satisfaction to us that the Framework Agreement for this purpose has already been finalized between India and ASEAN and will be signed at the Second India-ASEAN Summit at Bali in a few days from now. This major breakthrough should contribute significantly to an increasing integration of the India-ASEAN economic space over the coming years, including a free trade agreement. India is simultaneously negotiating an FTA with Thailand and a Comprehensive Economic Cooperation Agreement with Singapore. Both these negotiations are well advanced. These, along with measures to improve physical connectivity and transportation links such as the India-Myanmar-Thailand trilateral highway and the Delhi-Hanoi railway line, as part of the Ganga-Mekong project, will improve India-ASEAN linkages even further. With ASEAN engaged in parallel negotiations on free trade arrangements with India, China, Japan and South Korea, we are now perhaps at the threshold of an Asian economic community.


India’s relations with China are following a positive course. Both sides have made a steady effort to overcome past differences and build a forward-looking relationship. Our bilateral trade has shot up from under US$ 200 million in the early 1990s to nearly US$ 4.5 billion in 2002, and current trends might carry this figure to US$ 6 billion this year, with the balance of trade markedly in India’s favour, which is not the case with many other of China’s trading partners. The apprehensions of Indian business in dealing with Chinese competition is slowly withering away. Our trade with Japan, a country that accounts for 40% of Asian GDP, is at a disappointing $ 3.6 billion, but the two sides are now taking pro-active steps to spur our commercial and economic interaction.


The Gulf region and the wider Middle East is of great importance to India. It is a major source of our energy supplies. Some 3.5 million Indians are employed in the region, over 1.5 million in Saudi Arabia alone. Iraq in the pre-1990 days once provided 30% of our oil imports and was home to 100,000 Indians. Given the growth trends, India’s dependence on energy supplies from the area is only going to increase.


We also have traditional links with Central Asia and are exploring new trade and transportation connections to provide a strong economic dimension to our relations with countries of the region. The Central Asian republics could be an alternative source for India’s energy supplies. India is actively engaged in the reconstruction of Afghanistan. Besides food support, we have provided buses, civilian aircraft and human resource training in a variety of areas through our $270 million assistance programme, which extends also to agriculture, irrigation and the education and health sectors.

Excerpted from the text of the speech made by Indian External Affairs Minister at Harvard University on September 29, 2003

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