India’s Need for Regional bonding

International Affairs

Topic: General Studies 2:

• Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests. 

India’s Need for Regional bonding

Context

Sri Lankan Prime Minister Ranil Wickremesinghe’s participation in The Hindu’s Huddle Conclave, where he discussed on the India’s foreign policy & the need for greater regional integration.

India’s recent steps

• India has more or less shut down all conversations on SAARC (Summit not being held since 2014)
• India has walked away from the ASEAN-led Regional Comprehensive Economic Partnership (RCEP).
• Failure of BIMSTEC and SAARC to engender more intra-regional trade in comparison to other groupings such as ASEAN & EU.
• Indian government has taken a protectionist attitude on multilateral trade pacts and is relying more on direct bilateral deals with countries rather than overarching ones that might expose Indian markets to flooding by Chinese goods

About South Asian Association for Regional Cooperation (SAARC)

• It was established on 8 December 1985.
• Its member countries are—Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka and Afghanistan (2005)
• The Headquarters and Secretariat of the Association are at Kathmandu, Nepal.
• SAARC comprises 3% of the world’s area, 21% of the world’s population and 3.8% (2018) of the global economy.

About Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC)

• Established in 1997 through the Bangkok Declaration
• Its member countries are – Bangladesh, India, Myanmar, Sri Lanka, Thailand, Nepal & Bhutan
• With Pakistan not being a member of organisation it was envisaged as a platform for India to speed up its regional integration process.
• It acts as a bridge between South and South East Asia 
• Important Connectivity Projects are:
  • Kaladan Multimodal Project – links India and Myanmar.
  • Asian Trilateral Highway – connecting India and Thailand through Myanmar.
  • Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicles Agreement – for seamless flow of passenger and cargo traffic.

Significance of SAARC and BIMSTEC

• Neighbourhood first: Primacy to the country’s immediate neighbours.
• Geostrategic significance: Can counter China (OBOR initiative) through engaging our neighbours in development process and economic cooperation.
• Regional stability: These regional organisations can help in creation of mutual trust and ensure that regional interest over ride bilateral disputes
• Global leadership role: It offers India a platform to showcase its leadership in the region by taking up extra responsibilities.
• Game changer for India’s Act East Policy: Linking of South Asian economies with South East Asian region will bring further economic integration and prosperity to India particularly in its under-developed Eastern region
• Potential for India’s export: With closer economic integration of economies in the region, India’s domestic companies will get access to much bigger market thus boosting their revenues

Challenges for SAARC & BIMSTEC

• Broad area of cooperation leads to diversion of energy and resources.
• Inadequate Political Will: India’s inclination towards Big powers which leads to neglecting its relationship with its neighbours
• Bilateral tensions, especially between India and Pakistan, spilling over into SAARC meetings.
• Perception of India being a Big Brother vis-à-vis its neighbours whereby India enforces its own agenda on small neighbouring countries through these groupings
• Slow implementation of the projects announced by India – declines India’s credibility to deliver on its promises thus pushing Nations to seek help from China or West.
• Rising China in the region with its overarching Belt & Road initiative (Cheque book Diplomacy of China)

Suggestion made by Mr. Wickremesinghe at the conclave

• An even smaller sub-grouping of four countries with complementary economies: India, Sri Lanka, Bangladesh and Thailand, to begin the process of reducing tariffs and demolishing non-tariff barrier regimes
• Proactive India’s leadership and more integrated South Asian region would enable India & others to negotiate for better terms with RCEP so as not to be cut out of the “productivity network” in Asia
• Also there is need to come up with concrete Economic Integration Road Map to speed up the process of greater cooperation & integration in regional arena

Conclusion

For any regional sub-grouping in South Asia to flourish, it is India that will have to make the most concessions given the vast trade deficits India’s neighbours have at present, which it may not wish to do. India needs to be more accommodative for the realisation of its ambitions.

Connecting the dots

• ASEAN and EU – difference in structure & functioning of these regional organisation