The Hindu Business Line : Look East and at the North-East

It is, perhaps, time to take a re-look at the Look-East policy, to see how it can be an instrument to develop the neglected, troubled North-Eastern States.

Rohit Pandit

From 1992, India has been pursuing successfully a ‘Look-East’ policy to enhance economic cooperation. with its eastern neighbours. There has also been a political and strategic shift in India’s foreign policy which for long focussed on the western developed countries.

A convergence between foreign and external trade policies, the Look-East policy has been quite successful.

It is, perhaps, time to take a re-look at the Look-East policy, as to how it can serve as an instrument to develop the neglected, troubled, north-eastern States. East, North-East and South-East Asia now account for over a quarter of India’s total global exports and imports.

Economic cooperation

Given that the external economic engagement will now play an increasingly crucial part in India’s road to economic growth and development, it is clear that the country’s vision of becoming a developed economy by 2020 will depend to a large extent on the enhanced economic cooperation with its extended neighbourhood — East Asia and Australia.

India was slow to start off, but in recent years, as an integral part of its Look-East policy, there has been a thrust on Regional Trade Arrangements (RTAs), especially with its eastern neighbours such as Thailand, Singapore, Asean; BIMSTEC — the Bay of Bengal Initiative for MultiSectoral Technical and Economic Cooperation, and so on.

The Mekong Ganga Cooperation (MGC) and BIMSTEC are regional initiatives that have tremendous potential for enhancing cooperation; India’s policy-makers need to focus on this aspect.

India has also become a member of the East Asia Summit, which is a significant development with the potential to shift the global balance of economic power.

India’s religious, cultural and ethnic affinities go back a long way. As the land of Lord Buddha, it remains a country of pilgrimage for the Asean people. Tourism is one area that offers tremendous potential, especially heritage and religious tourism. Promotion of tourism will lead to enhanced trade and eventually greater investment.

Lesser developed Asean

India must focus on the relatively lesser developed Asean countries — Cambodia, Laos, Myanmar and Vietnam — and Bangladesh, Bhutan and Nepal from BIMSTEC. India has developed sufficient expertise in setting up of small and medium units.

It has emerged as a leader in the field of information technology and software and it is in this area that it can share its expertise and training personnel with the lesser developed countries.

Lack of knowledge of specific projects and business opportunities hinders business interest in these countries. Economic restructuring that is taking place in these countries lends itself to significant Indian investment.

There are several projects in infrastructure, power and construction projects, including cross-border transportation infrastructure, which Indian companies can undertake.

Due to the foreign exchange crunch faced by these countries, the Indian government should announce substantial lines of credit to these countries.

It is also essential that India and these countries collaborate in financial services, particularly banking services, so that the current difficulties faced by Indian companies in these countries are eased.

These countries share with India geographical proximity. Myanmar has a 1,600 km land frontier and a long maritime boundary with India. Direct shipping links need to be put in place and sustained by government support till economic viability is ensured. Similarly, road networks need to be developed between North-East India and Myanmar, and beyond.

To promote India’s border trade with Myanmar, Bangladesh and China, necessary infrastructure facilities, including roads network, transhipment facilities, proper customs stations, cold storages and the like, need to be put in place by India on an urgent basis. This would also help in developing the north-east region of India.

Border trade, transhipment of goods and tourism can effectively promote economic activity in North-East India, giving a boost to the local economy and improving the quality of the people.

In the north-eastern States, agriculture, horticulture and food processing, minerals, oil and gas, paper and wood are sectors with great potential that needs to be tapped and harnessed by promoting greater economic linkages between this region and Asean through Myanmar.

Greater connectivity

The region surrounding India’s north-eastern States has significant hydro-power potential which India can help harness. This can, in turn, be productively used by these States and give an impetus to their development.

To develop North-East India as a manufacturing and redistribution hub, there must be greater connectivity — rail, air, road, riverine and telecommunications — between the landlocked North-East and the rest of India, on the one hand, and between North-East India and the surrounding countries on the other.

(The author is Joint Secretary, PHDCCI. The views expressed are personal.)