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INDIA’S links with Asia to its East are ancient and civilizational. Yet, two centuries of European colonialism and a near half-century of the Cold War have weakened this ancient link. The end of the Cold War, India’s own increasing outward economic orientation, and the view that in the emerging multipolar world many Asian powers, particularly China, Japan, Korea and the ASEAN nations, are likely to be important players, has shaped India’s renewed eastward journey.

India’s cultural and economic links with eastern Asia go a long way. It is well known, for instance, that in Valmiki’s Ramayana there are references to places identified as China, Java and Sumatra as likely places of Goddess Sita’s concealment. Maritime historians have gathered evidence of Indian interaction with societies spanning the entire Indian Ocean rim well into 1000 BC and earlier.1 The kingdoms of the Andhra and Orissa coasts were active in promoting maritime contact with the people of Indo-China and the interest shown by the Mauryas and the Andhras encouraged emigration to the Indonesian archipelago and other surrounding islands.2

It is believed that around 600 AD, the Saka kings of Gujarat set sail and reached the west coast of Java. According to the distinguished naval historian, Rear Admiral Sridharan, ‘This was the first wave of emigrants from the west coast of India to have settled in Java and contributed in a large measure towards the spread of Indian art and culture.’3 There is evidence of intimate contacts between the Sailendras, who were the Hindu rulers of Malaya peninsula and the Indonesian archipelago and the Palas of Bengal.

Both Dravidian and Aryan people have had contact with the people of the South East Asian region. Of the many Indian dynasties which made contact with the region, the Kalinga dynasty played the most important role in promoting emigration to the region, particularly to Java and as early as 75 AD. Historians believe this marks the beginning of ‘Hindu’ influence in the region. As Sridharan notes: ‘There is no doubt that from as far back as 75 AD, if not earlier, the Hindus began to make a descent on the Indonesian archipelago and eventually left the imprint of Hindu civilization, Indian art and architecture, Hindu and Buddhist religious customs and manners. The island of Bali shows that even to this day there exist visible signs of Hindu culture and civilization.’4 Buddhism has had an even greater impact.

It is clear that until the arrival of Arab traders in the Indian Ocean in the second century AD, the Indian merchants held an unchallenged monopoly of overseas commerce in the Indian Ocean waters. Sridharan writes that: ‘The takeover of trade from south Indian merchants by the Arab middlemen apparently came about at the end of the Chola period. So long as the Cholas wielded their naval power, the Arabs do not appear to have ventured to interfere. But the decline of the Chola power and the decadence of the Sri Vijaya empire had created a vacuum in overseas commerce and the Arabs stepped in and in their trade rivalry effectively kept the Chinese away from the Indian Ocean. With the passing away of the overseas trade to the Arabs there was little or no direct interest taken by Indians in overseas commerce and they were content to trade with the Arab intermediaries and agents who sailed with their wares between the East and the West.’

This, however, did not weaken the enduring civilizational influences and for centuries India and the countries of ASEAN have retained a strong cultural bond. The well known Indonesian scholar O. Abdul Rachman notes, for instance: ‘From their birthplaces in India, the great religions of Hinduism and Buddhism found their way to Indonesia, where they mingled with the indigenous belief systems to become an enduring and integral component of Indonesian culture. Islam also arrived in Indonesia by way of the Indian subcontinent. During their long process of consolidation, adaptation and growth in Indonesia, these great religions came to be seen by comparing, for example, any of a wide range of religio-cultural expressions and artifacts – such as temples, shrines, ceremonies, and classic literature such as the Mahabharata and Ramayana – in their respective Indian and Indonesian contemporary manifestations.’5

Another Indonesian scholar, Soedjati Djiwandono, quotes President Sukarno as saying: ‘In the veins of every one of my people flows the blood of the Indian ancestors and the culture we possess is steeped through and through with Indian influences. Two thousand years ago, people from your country came to Jawadvipa and Suvarnadvipa in the spirit of brotherly love. They gave the initiative to found powerful kingdoms such as those of Sri Vijaya, Mataram and Majapahit. We then learned to worship the very Gods that you now worship still and we fashioned a culture that even today is largely identical with your own. Later, we turned to Islam, but that religion too was brought to us by people coming from both sides of the Indus.’6

In his masterly and majestic survey of world history, the eminent historian Fernand Braudel refers to India and East Asia as the ‘greatest of all the world economies’ of the pre-industrial, pre-capitalist era. Braudel talks of the ‘Far East’ as comprising ‘three gigantic world-economies’: ‘Islam, overlooking the Indian Ocean from the Red Sea and the Persian Gulf, and controlling the endless chain of deserts stretching across Asia from Arabia to China; India, whose influence extended throughout the Indian Ocean, both east and west of Cape Comorin; and China, at once a great territorial power – striking deep into the heart of Asia – and a maritime force, controlling the seas and countries bordering the Pacific. And so it had been for many hundreds of years.’7

‘The relationship between these huge areas,’ says Braudel, ‘was the result of a series of pendulum movements of greater or lesser strength, either side of the centrally positioned Indian subcontinent. The swing might benefit first the East and then the West, redistributing functions, power and political or economic advance. Through all these vicissitudes however, India maintained her central position: her merchants in Gujarat and on the Malabar and Coromandel coasts prevailed for centuries on end against their many competitors – the Arab traders of the Red Sea, the Persian merchants of the Gulf, or the Chinese merchants familiar with the Indonesian seas to which their junks were now regular visitors.’8

Discussing the place of the ‘East Indies’ in this ‘Asian super world economy’, Braudel adds: ‘The logical confluence of trade, the crossroads lying at the centre of this super world economy could hardly be elsewhere than in the East Indies. Geography placed this region on the edge of Asia, halfway between China and Japan on the one hand, and India and the countries of the Indian Ocean on the other. But if geography proposes, history disposes, and in this instance refusal or acceptance could take innumerable forms depending on the actions of the superpowers of the Far East: China and India. At times when both were prosperous, in control of themselves and simultaneously engaged in outside activities, the centre of gravity of the Far East was quite likely to lie, and to remain for a longer or shorter period, somewhere near the Malacca peninsula and the islands of Java and Sumatra. But the sleeping giants were both slow to arouse and invariably slow to act.’9

Indian and Chinese traders made the islands of the East Indies a ‘busy crossroads of trade’ for several centuries, and created, what Braudel calls, the ‘super world economy’ of the Far East that had attained levels of economic and social development exceeding those of Europe at the time. European expansion into the Indian Ocean region and colonialism altered the nature and course of India’s relations with Southeast Asia. As historian K.M. Panikkar notes, the victory of the Portuguese along the western coast of India in early 16th century ‘laid the firm foundations of the European mastery of the Eastern seas which continued for over 400 years.’10 Beginning with the Portuguese, followed by the Dutch and then by the British and French, the maritime links between India and the Southeast Asian nations was almost completely dominated by Europeans and India’s independent links with the region revived only after her Independence and the decline of colonial power in the region.

The leadership of independent India, especially the first Prime Minister Jawaharlal Nehru, brought India’s relations with the rest of Asia, in particular East Asia, to the centre stage of India’s relations with the world immediately after India attained independence from British colonial rule. However, the Cold War and India’s insularity, on the one hand, and its western orientation, on the other, did not allow this process to move forward at the required pace. It was then left to the first head of a government in Delhi hailing from peninsular India, and indeed from very close to the Coromandel coast, Prime Minister P.V. Narasimha Rao, to rediscover the value to India of its links with the East. It was Prime Minister Rao who first urged India to ‘Look East’ and himself chose to attach great importance to his diplomatic forays into South Korea, Singapore and other ASEAN nations.

There is no doubt that in relating to our Asian neighbours both cultural and economic factors play a role. In Thailand, for example, senior Thai officials and diplomats openly refer to ‘Buddhist diplomacy’ and ‘Buddhist tourism’ as important factors in their relations with India. However, in rediscovering Asia to its East, India has given a primacy of place to economic relations.

Indian economists and businessmen have for some time been profoundly impressed and influenced by the ‘miracle economies’ of Asia. Indeed, no other global phenomenon has had a greater impact on the thinking of India’s economists and economic policy makers in recent times than eastern Asia’s rapid economic take off. The two external factors which played a decisive role in shaping the shift in Indian economic policy in the 1990s were the end of the Cold War and India’s need to redefine its relationship with the world’s major powers, especially the United States, giving primacy to economic relations; and, the remarkable economic growth performance of Asia to the ‘east’ of India. The economic crisis in eastern Asia in 1997-98 has not taken the shine off the image of this region as being the engine of growth in Asia.

When ‘city states’ and smaller nations like Singapore, Hong Kong, Taiwan and Korea began to out-perform other developing economies in the 1960s and 1970s, India did not take much notice of this experience assuming that the dynamics of small economies, especially those which were trade-dependent and benefited from a benign relationship with the OECD economies, were quite different from those of a ‘continental’ economy like hers. This complacent view was rudely shaken by China’s growth performance, particularly in the framework of a more open, trade-oriented and liberalized economy in the 1980s. When the world began to predict the dawn of an ‘Asia-Pacific’ century and East and Southeast Asia were beginning to be regarded as the ‘new engines’ of global economic growth, India could hardly afford to ignore the lessons of East and Southeast Asia’s ‘outward orientation’. Not surprisingly, while Prime Minister Indira Gandhi refused to listen to the policy advice of Singapore’s President Lee Kuan Yew in the 1970s, in 1992 Prime Minister Narasimha Rao came to Singapore to Look East and learn from Asia.

The Asian miracle held another message for India. If India continued to remain trapped in a moderate growth syndrome, China would emerge as Asia’s undisputed leader. Thus, the urge to step up economic growth through increased trade and foreign investment, the need to ‘engage’ the faster growing economies of the world, particularly Asia, the need to deepen and broaden its relationship with the United States, European Union and eastern Asia in the post-Cold War context and a desire to improve relations with its own neighbours through increased economic interaction drove India’s economic liberalization programmes in the 1990s.

When Prime Minister Rao urged India to Look East he was not merely interested in enhancing Indian exports to the region. His interest, as indeed that of successive governments even if not pursued with equal vigour, was in forging a closer relationship with the region as a whole across the entire spectrum of trade, investment, cultural, political, diplomatic and strategic ties. Thus, apart from increased trade and investment there has also been an interest in cooperation in other spheres, science and technology, space and communications, maritime economy and security.

In the early and mid 1990s when regional economic cooperation and the creation of regional economic groups (REGs) was in vogue and India was nervous about being left out of all the regional groups being put together in Asia, India pursued membership of ASEAN even as it forced the pace of SAARC’s evolution from a political group to a regional economic group. India met with limited success on both fronts. In the case of ASEAN, it secured a ‘dialogue partner’ status and was subsequently invited to join the Asean Regional Forum (ARF). However, it failed to secure membership of APEC and did not succeed in widening the scope of the Asia-Europe conclave (ASEM) to secure its inclusion. However, India has become a full member of the Asean Regional Forum (ARF), a political forum, and hopes to be more active in regional security dialogues.

There are two dimensions to India’s new relationship with ASEAN. First, the trade and investment dimension (which is documented in subsequent sections of this paper); second, the foreign policy and strategic dimension. Neither of these relations has equal value to all ASEAN countries. Clearly, India’s economic relations with some are more developed than with others. Similarly with India’s political and strategic relations. Suffice it to say that in no case is the relationship purely unidimensional.

The economic relationship is stronger with countries like Singapore, Malaysia and Thailand – which have emerged as important trading and investment partners for India. Singapore is in many ways the hub of the India-ASEAN relationship and played a key role in ASEAN’s decision to designate India as a ‘full dialogue partner’. Singapore has major investment plans for Tamil Nadu and Karnataka. There are now direct flights from Singapore to Chennai, Bangalore and Hyderabad, apart from Delhi, Mumbai and Calcutta. Malaysia is expected to invest in road and port development in Andhra Pradesh and Orissa. Thailand’s relations with India have been further strengthened with the creation of another regional economic grouping, the Bangladesh India Myanmar Sri Lanka Thailand Economic Cooperation group, BIMSTEC.

On the political side, India has traditionally had good relations with Vietnam and now this relationship has been deepened with increased Indian investment in Vietnam and a growing two-way trade. India’s defence relationship with Indonesia and Malaysia has also been an important dimension of her relations with this region. This aspect of India-ASEAN relations has acquired higher profile with the emergence of China as a new global ‘superpower’ and an Asian economic giant.

China looms large over the region and in the new ‘balance of power’ which all ASEAN member countries are trying to help shape, India, Japan and the United States will be increasingly viewed as checks and balances against growing Chinese economic and military power in the region. All ASEAN member countries are committed to developing friendly and profitable relations with China, and are equally committed to good relations with other major powers in the region, including India. The Indonesian strategic policy thinker, Djiwandono notes, for example: ‘China and India, despite bilateral problems, are now both ASEAN dialogue partners and participants of ARF. Indeed, in terms of power politics, the engagement of the two largest nations in the world, along with the US, Japan and Russia, might help create a regional balance of power in East Asia and the Asia-Pacific region as part of the global balance that includes the European Union.’11

Djiwandono goes on to add: ‘In fact, with the establishment of ARF, ASEAN strives to engage and bring the major powers into a regional structure. In that way they may play their proper roles commensurate with their respective potential capabilities so as to maintain regional peace, security and stability.’ Thus, the comprehensive scope of India-ASEAN relations should not be lost sight of in any evaluation of purely economic benefits and costs. The India-ASEAN dialogue and relationship is wide ranging and will be long enduring. It is as much interested in building an economic relationship as in improving political and social understanding.

The slow progress of regional cooperation within South Asia, particularly the inability of SAARC (South Asian Association for Regional Cooperation) to widen economic links within the subcontinent, largely on account of Pakistani intransigence and unwillingness to play by the global rules of the game in trade and partly on account of India’s slow pace of trade liberalization, has also forced India to Look East for more trade opportunities. While SAARC has progressed from SAPTA I to SAPTA II, creating and widening a preferential trade agreement (PTA), and has placed the creation of a Free Trade Agreement (FTA) on its agenda, the progress on SAFTA has also been slowed down by Pakistani non-cooperation.

Given the slow pace of trade liberalization within SAARC, India has opted for speedier bilateral trade agreements with Sri Lanka and Bangladesh. Simultaneously, India has also supported the creation of new REGs like the Indian Ocean Rim Association for Regional Cooperation (IORARC) and the Bangladesh, India, Myanmar, Sri Lanka and Thailand Economic Cooperation (BIMSTEC). Regional growth triangles (quadrangles), partly inspired by the example of the Singapore-Malaysia-Thailand triangle, are being tried and if one of these experiments, the BBNI (Bhutan, Bangladesh, Nepal and India quadrangle) succeeds, long term solutions for the development of India’s backward northeastern region can be found.

India’s commitment to some of these REGs may increase if the current standoff between India and Pakistan on the Kargil conflict further slows down the momentum of economic cooperation within South Asia. SAARC has become hostage to the swings in India-Pakistan bilateral relationship and other SAARC members – Nepal, Sri Lanka and Bangladesh – have become testy about its slow progress. The lukewarm response of leaders to the report of the SAARC Eminent Persons’ Group (1998), which has advocated the creation of a South Asian Customs Union by 2015 and a SA Economic Union (SAEU) by 2020, suggests that SAARC may not emerge as an important REG for India in the near future.

Given this impasse in SAARC, India may well end up investing more energy in its bilateral relationship with other SAARC members and, at the same time, help create and sustain new forums in which the agenda of trade liberalization can be pursued. The most promising such forum is BIMSTEC. Its membership includes key SAARC countries as well as two ASEAN members closest to India in geographical terms – Myanmar and Thailand. BIMSTEC is an odd name for an REG. Indeed, there is no REG anywhere in the world which is named on the basis of the first letter of the name of each of its member countries. This is an untidy formula which has forced BIMSTEC to change its name at least once, from BISTEC, when Myanmar joined it.

The defining feature of BIMSTEC is that its members are the rim economies of the Bay of Bengal. If BIMSTEC is in fact viewed as a Bay of Bengal Community (BOBCOM), there is good reason to include the two landlocked countries in South Asia which are completely dependent on the Bay of Bengal for their national economic needs – Nepal and Bhutan. In this case, BIMSTEC or BOBCOM becomes SAARC minus Pakistan plus Myanmar and Thailand. India, Bangladesh, Myanmar, Singapore, Sri Lanka and Thailand should come closer and create the Bay of Bengal community to facilitate speedier trade liberalization and increased intra-regional capital flows within such a community. The landlocked states of Nepal and Bhutan, directly dependent on this sea, may also be invited to join. If China’s southwestern provinces and Malaysia find it useful they too may establish special links with such a group.

It is easy to see why a Bay of Bengal community (BOBCOM) may end up being a far more dynamic group. BOBCOM’s ASEAN component, especially Thailand, can help speed up the pace of trade liberalization and regional economic cooperation within South Asia at a pace faster than what SAARC has been capable of. In the interest of imparting greater dynamism to such a regional economic group, and in recognition of the fact that it is the largest hub port serving the entire Bay of Bengal, Singapore should be invited to join the Bay of Bengal community.

It is also becoming increasingly clear that the only regional economic links that India can meaningfully forge in the near future, even within South Asia, will be those to her East – the Bay of Bengal rim, the Himalayan region and eastwards. As long as Pakistan remains a ‘rogue’ state in the region, sponsoring terrorism and unwilling to restore normal trade relations within the WTO framework, not only will SAARC, SAFTA and SAEU remain hobbled, but even the prospects of regional economic links with Central and West Asia will remain tenuous and limited. Against this background, a regional economic group based around the Bay of Bengal and linking India, Sri Lanka, Nepal and Bangladesh more closely to the ASEAN economies offers the prospect of widening the network for outward oriented growth in this part of Asia.

Barely a decade ago the 21st century was regarded as the Asia-Pacific century. Such hubris has been missing since the economic crisis in eastern Asia. However, it is now clear that eastern Asia will remain an important engine of growth well into the current century and that the varying dynamic of growth will alter the balance of power, both within the region and globally.

If the next phase of India’s outward orientation has to proceed apace, it is important that India’s trade with the APEC (Asia-Pacific Economic Community) economies must increase, and that India must in fact become a member. To enable this, the Look East policy must firmly focus on Singapore, Thailand and Korea. India must also rebuild its links with Myanmar with whom economic and political relations have been neglected for far too long. There is potential for the development of India’s North East through greater cooperation with Myanmar, Thailand and Singapore.

So far we have only explained India’s Look East policy. The question remains as to why Asia to our east must desire to look West to India. There is no easy answer to this question. An obvious reason is economic. India’s liberal trade and investment policy of the 1990s has opened up the Indian economy and the newly industrializing Asian economies can benefit from this. That is clear. There are strategic factors as well. The end of the Cold War and the emergence of China as a major power have alerted a range of countries in Asia, including Japan, Korea, Singapore, Indonesia, Malaysia and Thailand to consider closer relations with India. What motivates each of these nations is quite different. In Thailand there is a conscious Look West policy of being more actively engaged with South Asia. In Korea there is a realisation that Japan may have been too slow in responding to market opportunities in India and that Korean brand names have come to stay here and so must be invested in further. Almost all these countries would like to see a balance of power in Asia in which the United States, China and Japan do not increase their power at the expense of the other. In this context, the emergence of a more economically dynamic and strategically secure India can be a positive factor.

For India, therefore, there is once again an opportunity to relate to Asia to its east. However, so far our diplomacy has been desultory, at best sporadic and episodic. Greater consistency, greater commitment to more open trade and investment relations and a willingness to share in the region’s problems and not just in its prosperity will help India move closer. Eastern Asia beckons India once again as we enter a new millennium. While India must Look East with purpose and commitment, the Asia-Pacific community must also accept the fact that its links with this subcontinent, particularly peninsular India, run deep into the foundation of our combined history. In Asia, India is both a factor for peace and stability as well as a partner in progress.

Sanjaya Baru



1. K. Sridharan, A Maritime History of India. Publications Division, Ministry of Information and Broadcasting, Government of India, 1982, chapters 1-2.

2. Ibid., pp. 27-28.

3. Ibid., p. 31.

4. Ibid., p. 37.

5. O. Abdul Rachman, India and Indonesia in a Changing World. Paper presented to the First India-Indonesia seminar, New Delhi, April 1976 (mimeo).

6. Quoted in S. Djiwandono, India’s Relations with East Asia: New Partners? Paper presented at the IISS conference on Rethinking India’s Role in the World, Neemrana Fort, India, September 1997 (mimeo).

7. Fernand Braudel, Civilisation and Capitalism, 15th-18th Century. Volume 3: The Perspective of the World. Collins/Fontana Press, 1984, chapter 5, pp. 484-535.

8. Ibid., p. 484.

9. Ibid., p. 523.

10. K.M. Panikkar, India and the Indian Ocean. George, Allen and Unwin, London.

11. Djiwandono, op. cit., p. 13.