Session I

Chair: Prof. Madhu Bhalla, Head, East Asian Studies, University of Delhi
Speaker 1: Dr. Debashis Chakraborty, Assistant Professor, Indian Institute of Foreign Trade
Speaker 2: Dr. Vibhanshu Shekhar, Research Associate, School of International Studies, Jawaharlal University

Themes being discussed here cover some of the salient issues facing India in its engagement with ASEAN, which has begun looking at both India and China for reasons significant in the areas of economics and geopolitics. ASEAN has emerged as an important region for India, one where there is tremendous potential for India to successfully utilize its soft power to achieve greater cooperation and integration. There is, however, tremendous scope for India to streamline its integration process in order to effectively realize the potential gains the region can offer.

ASEAN's Economic Relations with India and China: Beyond the FTA's
Debashis Chakraborty

India has begun pursuing a full-fledged regional trading agreements (RTA) approach since 2004. However, India does not stand to gain too much economically from ASEAN-India FTA because of the already low tariff levels maintained by ASEAN with respect to India. Nonetheless, the gains for India have been perceived more in terms of the contribution of the FTA to regional consolidation and concomitant regional peace and security. Being part of an FTA with ASEAN would also offer India greater bargaining power at multilateral negotiations by tying with partner countries through regional commitments.

An important aspect of India's approach towards the FTA is its inclusion of a shorter negative list of goods than China. This element highlights a soft approach followed by India towards the FTA. It is also possible to perceive China's inclusion of a larger negative list as an example of its superior negotiating capabilities as compared to India. Negotiations on the Sino-ASEAN FTA have been much smoother than the India-ASEAN FTA. Further, it is important to note that China's approach towards an FTA with ASEAN includes an emphasis on facing least anti-dumping duties whereas India is imposing greater anti-dumping duties on ASEAN. This highlights a contradiction in the approaches of the two countries. Nonetheless, there is a striking similarity in the approaches of the two countries on non-trade issues.

In the future, gains from the India-ASEAN FTA will be more in the areas of education, movement of professionals, SME products, business services and collaborations and the WTO. India is likely to gain from an integrated production network with ASEAN especially in the automobile industry. India hopes to extend this possibility to other industries and sectors as well. On the other hand gains from the Sino-ASEAN FTA will be from manufacturing, travel and transportation services and integrated production networks of hardware parts.

In the area of infrastructure, India is collaborating with Myanmar extensively to build roads and port infrastructure. This would benefit India by providing greater access to the ASEAN market along with opening up opportunities for the northeast, an otherwise landlocked region. Like India, China too has focused on infrastructure and has common areas of cooperation as listed under India-ASEAN FTA. There is thus to a large extent similarities in the path adopted by both countries to engage in an FTA with ASEAN, with differences arising from the fundamental structural differences in the economies of India and China.

India and China's Institutional Engagements with ASEAN: A Comparison
Vibhanshu Shekhar

The discussion over institutional engagement covers two time-frames. These are - the formative phase (1992-2001) and the Summit Phase (2002 onwards). Three institutional engagements can be identified through which both India and China have been proactively engaged with ASEAN. These are ASEAN Regional Forum (ARF), ASEAN+1 Framework (summit level meetings between ASEAN and India and ASEAN and China), and the East Asia Summit.

Notwithstanding simultaneous entry of India and China into ASEAN, and India's diplomatic edge due to prevailing 'China-threat theory,' China surged much ahead of India both in terms of the nature and level of institutional engagement with ASEAN at the end of the first phase of engagement. China began interacting with ASEAN not only under ASEAN+3 framework but also set up ASEAN+1 summit level meetings in the aftermath of economic crisis of 1997. These two frameworks have facilitated China much greater influence in the ASEAN-centric cooperative deliberations.

The reasons for India's limited engagement with ASEAN can be attributed to India's own national outlook, the domestic paraphernalia, and the strategic resources at its disposal. India's initial engagement with ASEAN was as an economically weak state, strategically insular power, and a government overloaded with bureaucracy. India was not a confident player during the first phase of its engagement with ASEAN, which can be termed as a 'phase of experimentation, confidence building, and learning.' The Indian economic policies were largely protectionist and it failed to offer any viable option in time of economic crisis facing ASEAN in the late 1990s.

It seems that the first phase of learning has paid off during the second phase. India's engagement with ASEAN is much more diverse today. India has become a member of a 16-member East Asia Summit and participates in the annual summit level meetings under the ASEAN+1 framework. Today, India is a more confident multilateral player, a market-driven economy, and willing to take greater initiatives. It seems that the Chinese pre-eminence is also winning India friends. In the ASEAN+1 Framework and the East Asia Summit, there is a greater acceptability from ASEAN for India as a regional player. In essence, the more India improves domestically, the more important stakeholder it will be in the ASEAN-driven cooperative deliberations.

Though the range of India's cooperation with ASEAN shows significant progress during the second phase, India is yet to engage ASEAN as a major power with systemic ambition. First, there are greater degree of efforts by India to deal bilaterally with the nations instead of in the framework of ASEAN. Second, India has to put its own house in order. The time lag and delays in the implementation of the policies indicates a lack of roadmap. Third, the prevailing security mindset also impedes the effective connectivity between the nations. For example, India has to liberalize its visa regime to improve the tourism industry. On the other hand, ASEAN also needs to get its act together. There are several issues, including Open Skies Regime, FTA and Maritime Governance, on which ASEAN is yet to find a collective policy stance.

Discussion

The India-ASEAN FTA negotiation has been a rocky experience that often required political intervention from the top. Though the initial Indian list of 1400 sensitive items highlighted the lack of planning, its eventual scaling down of the list brings forth flexibility shown by the Indian negotiators.

Q. Should India prefer bilateralism over multilateralism?
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