Rolling the Credits on Modi’s ‘Act East’ Policy

By Juanita Justin

Prime Minister Narendra Modi’s interaction with Southeast Asia comes at a time of changing geopolitical architecture in the Southeast Asian and Indo-Pacific region. The government revamped the 1991 ‘Look East’ policy to the ‘Act East’ policy to counter China’s increasing dominance in the region, not just economically but also in the security domain. The Indian government intended to increase connectivity in Southeast Asia by increasing trade investments, constructing infrastructural projects and strengthening regional institutions.

The last five years witnessed priorities set for trade and infrastructural connectivity with ASEAN countries taking a back seat. The Kaladan Multi-Modal Transit Transport Project was proposed as an alternative route to reduce the congestion of truck-trade in the Siliguri Corridor and to increase the economic connectivity within the region. The proposal is an important project envisioned to advocate the Act East policy. But the implementation of the project has been stalled for a third time and this has caused a sense of discontent in the region. The India-Myanmar-Thailand Motor Vehicle Agreement (IMT MVA) is also another key project that has been progressing slowly. The slow progress creates distrust in the ASEAN region. According to a 2019 survey conducted in Southeast Asia, the trust levels among ASEAN countries towards India are very low i.e., about 21.7 per cent and only 19.6 per cent are confident that India is contributing to the prosperity and governance in the region. In response to their needs of diversifying infrastructure and trade investment partnerships and to reduce their dependence on China, the Modi government promised US$ 1 billion Line of Credit (LoC) and enhanced the financial assistance in the regional institutions to promote capacity building, collaborative R&D projects in Science and Technology, renewable energy, agriculture, tourism and also to combat climate change — a concerning issue among the ASEAN countries.

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Juanita Justin is a Research Intern at CPPR Centre for Strategic Studies. She can be contacted at [email protected] . Views expressed by the author are personal and need not reflect or represent the views of Centre for Public Policy Research