ECONOMIC AND STRATEGIC ORIENTATION , LOOK EAST POLICY
by: S.S.Kshetri

        It is the so-called “Look East” policy—an economic and strategic orientation to South East Asia.The developing relations between India and Burma are a relatively recent phenomenon. Not only is India keen to gain access to Burma’s oil and gas, but a land route through the country to South East Asia is an essential component of its broader “Look East” policy.
    In January, India signed an agreement in principle with Burma and Bangladesh to build a pipeline from Burmese offshore gas fields via Bangladesh to India. India has also gained Burmese assistance in cracking down on various armed separatist movements based in northeastern India. The state of Assam currently produces about 15 percent of India’s oil needs.

    The “Look East” policy was aimed at developing closer relations with the so-called economic “tigers” of South East Asia. In 1997, India became a full dialogue partner of the region’s main grouping—the Association of South East Asian Nations (ASEAN). To demonstrate the close relations he proposed an India-ASEAN motor rally from South East Asia through Burma to India. He outlined a program of free trade agreements with the countries of the region. Under the Vajpayee government, India developed closer strategic and economic relations with Washington. India has trade agreements with most ASEAN countries and the region currently accounts for $US13 billion or about 10 percent of India’s total foreign trade. India is also seeking strategic relations in South East Asia. India faces competition from China for influence in South East Asia, but the chief potential obstacle to its “Look East” strategy is Washington, rather than Beijing.

    In the recent decade, India has opened its economy to international trade and has launched initiatives to forge closer trade and economic ties with immediate neighbors. This paper looks at the economic opportunities for the states of the North East in India’s emerging trade strategy in the region, especially its ‘Look East’ policy and the spate of preferential trading arrangements (PTA) and the free trade arrangements (FTA) with neighboring countries like Nepal, Bangladesh, Sri Lanka, Myanmar and Thailand. The last section evaluates the prospect for the North East through regional trade and economic exchanges with the neighboring countries.

    The North East region has a 37 km. link with India, but 4500 km. of border with the newly emerging nations of Asia, say China, Burma (Myanmar), Bangladesh, Bhutan, and Nepal. All products consumed in the North East came to be imported from distant manufacturing regions in India. The North East’s ties with the Indian hinterland have been expensive and regressive.

    India is also committed to regional trade through initiatives like South Asia Growth Quadrangle (SAGQ), South Asian Subregion for Economic Cooperation (SASEC), Bangladesh-India-Myanmar-Sri Lanka-Thailand-Economic Cooperation (BIMSTEC), etc. Last year, India signed a Free Trade Agreement with Thailand. During the 1990s, India offered Preferential Trade Arrangements (PTA) to all the member countries of SAARC/SAPTA. India offered unilateral trade concessions to its neighbours and encouraged them to export to India.

 India’s Trade with Asia and North East Neighbours*
India Total Trade ($ mill) 29244.2 40418.8 76490.9 140486
Share of Developing Countries 16.0 21.1 26.1 30.3
* North East Neighbours include Bhutan, Nepal, Bangladesh, China and Thailand
It is hardly surprising that with closed borders and open ports, the North East is not part of India’s trade expansion strategy with eastern neighbours. Sanjib Baruah (2004), ‘Between South and Southeast Asia Northeast India and Look East Policy’, Ceniseas Paper 4, Guwahati. India (2004),
Economic Survey, Delhi. India (1997), Transforming the North East, High Level Committee Report, Planning Commission, New Delhi. NCAER (2004),
East India: Human Development Report, New Delhi, OUP.

        Former Prime Minister of India Atal Bihari Vajpayee had India's 'Look East' policy in mind when he proposed at the ASEAN-India summit in Bali (Indonesia) 2003 the holding of an India-ASEAN car rally "to draw dramatic attention to our geographical proximity". The India-ASEAN car rally has since become a reality. While addressing the recent meeting of the North East council Dr Singh said the North East India could be a gateway for India for the ASEAN and East Asia it is for the North East Council to build on this. During his visit to the North East In November 2004 Dr Singh described the region as the "gateway" to India's engagement with the Association for South East Asian Nations and with the sub-regional grouping, BIMST-EC (Bangladesh, India, Myanmar, Sri Lanka, Thailand-Economic Cooperation)

        Though the north-east has enormous natural and human resources, India's north-east has always been neglected by the central government in New Delhi. Even though India is making a small late beginning towards the East Asia via the North East, China has already started the process very fast. Besides tapping tourism and the tea industry with India, China has its eye on ASEAN countries for development of trade. Once the road is opened, this will go a long way in developing trade between China and South-east Asian countries".

        India's "Look East Policy" worries Beijing because it has cut short latter's expansionist policy with the Southeast Asian countries mainly Myanmar. India is desperate to get as much natural gas as it can from the blocks in Arakan State passing through Bangladesh and the North East connecting the rest of India. The development model resulting from India's Look East Policy has tremendous potential for the North East. The share of North East India in this annual trade was around 12 percent annually. One should strongly hope the free trade agreement between India and the ASEAN is signed in this ASEAN Summit as this could pave the way for economic prosperity of the North East.

The region shares its borders more with Bangladesh, Myanmar, and China than with India. For one, it means better connectivity between the seven States of the North-East and the rest of India. The plan also demands that India shed traditional security and trade fears to participate in initiatives to establish better links with ASEAN and the East through its North-East. India has a separate road project to link the North-East to Thailand via Myanmar, and a rail link connecting Manipur with Yangon. A possible route, he suggested, could be from Guwahati in the North-east India, through Burma, Thailand and Cambodia to Hanoi in Vietnam. The India-ASEAN car rally has since become reality. Though the north-east has enormous natural and human resources, India's north-east has always been neglected by the central government in New Delhi. Besides tapping tourism and the tea industry with India, China has its eye on ASEAN countries for development of trade. Once the road is opened, this will go a long way in developing trade between China and South-east Asian countries. The immense hydroelectric potential of the areas bordering India could be developed to promote rapid economic growth of the North East.


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