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Modi and India’s “Act East” Policy

Can India “Make It” in Southeast Asia?

December 5, 2015

Can India “Make It” in Southeast Asia?

Indian Prime Minister Narendra Modi’s recent four-day trip to South East Asia was significant for a number of reasons. Modi’s primary goal is to increase India’s engagement both with ASEAN — especially Singapore — not just in terms of trade and commerce, but also strengthening strategic ties.

India’s engagement with ASEAN has increased over the past two decades. The “Look East Policy” began in the mid-1990s, during the tenure of PV Narasimha Rao.

His predecessors Atal Bihari Vajpayee and Manmohan Singh played a pivotal role in strengthening this engagement. To show a heightened sense of commitment and initiative, the Modi government has renamed the policy “Act East.”

Modi during his 37th lecture on ‘India’s Singapore story’ in Singapore referred to the point of how his government wants to further accelerate engagement with ASEAN.

Economic cooperation

India’s engagement with ASEAN is at many levels. First, there is an economic component, with trade having reached $76.52 billion as of 2014. The true potential of the bilateral relationship is pegged at $100 billion.

To realize that potential, Prime Minister Modi is actively pitching greater cooperation between India and ASEAN, pointing to some important initiatives his government has taken to improve the business environment as well as the robust macro-economic indicators.

Modi’s vision centers on making India a manufacturing hub through the “Make in India” program, and improving infrastructure and the overall quality of life through the construction of smart cities.

Strategic issues

The second important facet of India’s links with ASEAN are strategic issues, which do not just concern ASEAN countries, but also the United States, Japan and China – all of whom are important players in ASEAN.

At the ASEAN-India Summit on November 21, Modi said, “India hopes that all parties to the disputes in the South China Sea will abide by the guidelines on the implementation of the Declaration on the Conduct of Parties in the South China Sea, and redouble efforts for early adoption of a Code of Conduct on the basis of consensus.”

Modi also underscored the need for a greater resolve in the global battle against terrorism.

India’s diaspora

The third important aspect of India’s ties with South East Asia is the diaspora. Modi addressed the Indian diaspora in both Malaysia and Singapore.

In Malaysia, the Indian community (mostly Tamils) accounts for nearly 8% of the total population, having migrated there still during British rule.

In contrast, in Singapore a large chunk of the Indian diaspora consists of professionals who migrated there in the 1980s and 1990s. Modi plans to make these Indians stakeholders in India’s progress.

Regarding Modi’s Act East Policy, there are clearly some issues which need to be addressed:

Exploring synergies with Philippines and Indonesia

Especially with the Philippines, there are clear strategic convergences, mainly with regard to apprehensions about China’s assertiveness in the South China Sea Dispute. Currently, there is minimal engagement between both countries, despite this congruence on strategic issues.

With Indonesia, there are historical commonalities, and there are reasonable business links, though bilateral trade (16 Billion USD) is far below potential. For a number of Indian tourists, Indonesia is a favored destination.

Apart from the above issues, it is also time that both countries found synergies in the fight against terror. Indonesia with its religious diversity and tolerant ethos is an example for other Islamic countries. Both countries can find synergies not just in the security context, but also in coming up with a counter narrative to counter ISIS propaganda.

Involving India’s state governments

This is an important topic not just in the context of seeking foreign direct investment, but also in the context of the diaspora outreach.

A number of India’s states are already actively seeking to learn from the success of ASEAN countries, especially Singapore, in urban planning and infrastructure.

A strong example of this is the fact that Singapore is a partner in the development of Amaravati, the yet to be built capital of Andhra Pradesh.

With regard to Malaysia, Andhra is actively seeking investments in infrastructure, IT, pharma and other sectors, including cooperation in solar projects.

Real engagement needed in Southeast Asia

India also needs to become an active player in Southeast Asia. It cannot be a passive player. Accordingly, its approach towards issues like the South China Sea dispute should be less apprehensive of Chinese sensitivities.

In this context, the strengthening of the strategic partnership between India, Japan and the United States is welcome.

The biggest change, however, lies in the numbers. While in the 1950s, it was the Non-Aligned movement that drove India’s engagement with Southeast Asia, today that is driven by the fact that India is a $2 trillion economy, and one of the engines of economic growth globally.

In short, India’s national interest – in both its economic and strategic dimensions – give it ample reason to engage much more proactively in its own wider neighborhood.


Modi’s vision centers on making India a manufacturing hub through the “Make in India" program.

Modi plans to make the Indian diaspora in Malaysia and Singapore stakeholders in India’s progress.

There is minimal engagement between India and the Philippines despite congruence on strategic issues.

India should be less apprehensive of Chinese sensitivities regarding the South China Sea dispute.