India: Manmohan Singh makes pitch for broad role in SE Asia

Indian Prime Minister Manmohan Singh said India is prepared to sign an agreement on free trade in services and investments with ASEAN next month and called for broader cooperation on security in the region at the India-ASEAN Summit in Phnom Penh on Monday.

The next logical step in India's so-called "Look East Policy," Singh's push eastward dovetails with US President Barack Obama's pivot toward Asia, potentially serving to strengthen the budding Indo-US strategic partnership as well as improve India's ties with the countries of ASEAN. But Singh's efforts are almost certain to rub China the wrong way.

“India’s relationship with ASEAN members and with ASEAN institutionally continues to grow in all dimensions. Commerce and connectivity are vital areas of this relationship and we have made good progress in both," Singh said in his address to the delegates, according to the Press Trust of India.

Singh said the Free Trade Agreement in Services and Investment will complement an existing India-ASEAN Free Trade Agreement on Trade in Goods, which has increased two-way trade to nearly $80 billion for the financial year ending March 2012, the agency said. The target for India-ASEAN goods trade for this year was $70 billion.

“I would like to inform Your Excellencies that India is prepared to conclude the Agreement on Trade in Services and Investment Promotion before the Commemorative Summit in Delhi in December. This will be a strong signal of our deepening economic engagement, and will allow for rapid expansion in trade and investment flows in both directions,” Singh said.

The FTA in Goods was signed in 2009 but aspects related to Services and Investment were delayed due to strong differences between the two sides, the agency reported.

As GlobalPost reported last year, India has been progressively asserting its influence in Southeast Asia and Asia Pacific, even as China moves into South Asian countries like Nepal and Myanmar.

Last year, for instance, India stiffened its response to China's bellicose posturing over an Indo-Vietnamese drilling project in the South China Sea, and New Delhi and Hanoi also agreed to launch a joint security dialogue, held twice a year, to expand a burgeoning strategic partnership. 

India's Look East policy was crafted by then-Prime Minister Narasinha Rao in 1991 to boost trade at a time when India desperately needed foreign-exchange reserves. Aiming to emulate China's success in courting investors, India targeted the so-called Asian tigers as the key to shoring up its finances, according to Srikanth Kondapalli, a professor in Chinese Studies at Jawaharlal Nehru University.

The policy paved the way for economic agreements with Japan and South Korea, and a free-trade deal with the Association of Southeast Asian Nations, a regional economic bloc, Kondapalli said.

Asian nations now account for 60 percent of India's foreign trade and a hefty portion of foreign-direct investment, he said.

Although in recent years, India has sought to transform the Look East policy into a strategic response to China's growing influence with its South Asian neighbors in Bangladesh, Nepal and Sri Lanka, New Delhi has often seemed at a loss as to how to deal with Beijing.

On the one hand, Obama's pivot toward Asia increases the upside for a New Delhi already keen to be more assertive. But with China ever more concerned about the various bugbears of "encirclement," "containment" and so forth, it also increases the risks.