A Chinese Take on India’s Eastward Strategy and Its Implications

CHU Shulong

India is rising, with growing economic power and expanding interests. India is not satisfied with being a dominant power in South Asia and the Indian Ocean. It is also looking toward other regions, east and west – the Middle East, Africa, East Asia, and Southeast Asia in particular. India’s eastward movement has some important implications for the Asia-Pacific region, which are being actively discussed in China.

How does India matter to China? The “One Belt, One Road” initiative is heavily centered on the Indian Ocean, making India’s response important. India’s entry along with Pakistan into the SCO, as well as its role in BRICS, RCEP, and ASEAN + 6 gives it a significant voice in the institutional realignment in Asia. As tensions rise over the South China Sea, the degree of Indian cooperation with the United States and its allies is being carefully watched. Bilateral Sino-Indian issues, of both geopolitical and economic nature, must not be overlooked at a time when India’s rate of economic growth has just surpassed that of China, India’s population is set to overtake China’s in size, and arms budgets are rising in the Asia-Pacific region.

In this article, I assess India’s eastward movement in its various dimensions, including its economic, political, and security ties with regional players – with an emphasis on Indo-Chinese relations – in the context of increasing polarization in East Asia. In addressing this issue, I provide an overview of India’s eastward movement, the progress and limitations of its strategy, and finally, an assessment of India’s role in East Asia. The conclusion asks how different countries view India’s role in the region, a question that is being widely debated in China. My conclusion is that India is not leaning to the United States and Japan but is sticking with “non-alignment.”     

Review of India’s Eastward Movement

India considered an eastward-looking policy in the early 1990s; however, the government and society did little to implement it. Only since the beginning of the 21st century has the Indian leadership started to pursue a strategy of “looking east.” The basic content of the strategy is that in addition to strengthening India’s role in its own region of South Asia, it should expand its interests and influence in East Asia, especially in Southeast Asia; to enhance India’s role in East Asia means more active involvement in the regional affairs of the Asia-Pacific region and strengthening economic, political, social, and security ties with the countries in East Asia.

India’s “eastward” strategy is very much economic. The country started to “reform” through economic modernization in the early 1990s, roughly ten years after China. Compared with China and other economies in East Asia, which long followed the “export-led growth” model during the take-off phase of their economic development, India’s development model depended more on its “internal market” and the service industry. As a developing economy, India has a potentially huge domestic market, but, at the same time, it lacks oil and other energy resources, technology, and capital to modernize its economy – which is why it must look outward to develop its economy.

For new ties, India has been looking to the “west” and the “east,” because to its north are the world’s highest mountains as well as its hostile neighbors, Pakistan and Afghanistan, with whom India is traditional enemies. Further to the “west” are the regions of the Middle East and Africa, from which India can get oil and other resources needed for its booming economy, and markets to which India can export its goods and services. And now, it is to the east that India seeks geopolitical and geo-economic gains.

To India’s “east,” Southeast Asia, Northeast Asia, Australia, and New Zealand offer a different, attractive set of opportunities. In particular, Southeast Asia is geographically close and shares close cultural ties with India. Besides, East Asia has been a rising economic hub since the 1960s, and India wants to partake in its development and modernize its own economy. The economic “eastward movement” is to develop stronger trade ties, sell more Indian goods and services, and draw investments from the capital-rich East Asia – especially as India aspires to become the world’s “factory,” emphasizing its label, “made in India.” It needs capital and technology investments from Japan, South Korea, Mainland China, Taiwan, Hong Kong, and Southeast Asia, where there is rich experience over the decades and abundant capital in manufacturing.

In addition to economic interests, another major motivation for India to “Look East,” as well as “Look West,” is to promote India’s influence in the world. Indians, including its leaders, officials, intellectuals, and the general public, have always engendered a strong “big nation” mentality. And they believe that they have good reason: India is a big country by size, second in the world in population with more them 1.2 billion people, and located in the “middle” of the world – on the ocean that bears its name. Indians are known for pride in their history, culture, and civilization; they believe that India is found upon one of the richest and oldest civilizations in the world and, along with China, continues to be one of the world’s major countries. Others, such as Egypt, Greece, and Iran, lack such continuity and became smaller and weaker over time. In addition, Indians identify themselves as a big developing country, even as the representative or leader of the developing world. Its top leaders said in the 1950s that India has only two options: to be a first-class nation or to disappear from the world.1 Certainly, Indians believe they cannot disappear; they seek, rather, to become a first-class power.

Indians identify their country’s status very highly, but the reality they see, except in population growth, hardly meets their expectations. For decades, Indians have tended to compare themselves with China; in this comparison, they have been unhappy with the world, and with themselves. Many officials, intellectuals, and journalists, and even the general public have assumed that their conditions are similar to those of China, the biggest developing country and a civilization recognized as one of the greatest in the world. However, Indians find themselves at odds with their expectations – India has not been treated as a big and important country by the world, as China has been. China has been a permanent member of the UN Security Council, and India has not; China draws close attention, as in the American presidential campaigns or the State of the Union address, and India barely draws mention; leaders of powerful nations visit China much more; the climate change agreement in Paris was led by the Americans and Chinese, and Indian assumed only a minor role. This has left Indians dissatisfied with their regional and global role. They believe it is unfair and must be changed.

India over the past decade has tried hard to become a permanent member of the Security Council. It has adopted strategies of looking “eastward” and “westward” to expand its influence to more regions, engaging with East Asia both multilaterally and bilaterally. Multilaterally, since the 1990s, India has joined APEC, ASEAN + 6, and other regional institutions in East Asia. Bilaterally, it has worked hard to strengthen relations with almost all East Asian nations, including Japan, South Korea, China, and the ten Southeast Asian countries. Its bilateral efforts are comprehensive, including economic, political, and security ties as well as social and cultural linkages.

Progress of India’s Eastward Strategy

India has made significant progress in its “eastward” movement in the past decade, especially in the economic arena by expanding ties with the Southeast Asia nations. However, because India’s economy has not been export- and investment-led, contrary to many East Asian economies, India’s economic ties with them fall far short of their ties with other major economies. In part, because India’s economy is still relatively small, with a GDP of a little more than $2 trillion, its trade volume is not huge. In 2014, the volume between India and Southeast Asia was $67.6 billion, of which $43.3 billion were imports and $24.3 billion exports, accounting for only 8.6% of India’s total trade.2

In addition, because India still has some strict regulations on foreign investment, labor land, taxes and such, its FDI is small compared with those of East Asia economies. According to official statistics, India’s investment in Southeast Asia was $4.2 billion in 2012, $1.3 billion in 2013, and only $819 million in 2014. While ASEAN’s investment in India totaled $53.9 billion by the end of 2015, $45.9 billion of which (85% of the total) was from Singapore,3 India is still not a major economic power in Southeast Asia or elsewhere in East Asia; its economic influence is much weaker than that of other powers.

India made clear progress in strengthening its political and security role in East Asia in recent years, notably through dialogue and coordination with the United States and Japan. Regular bilateral and trilateral foreign and security dialogues as well as joint military exercises helped to make India a “player” in East Asia. In addition, it developed greater political and security relations with ASEAN countries, through arms sales and military exercises with some nations. India is now involved in East Asian regional affairs, including the issues of the South China Sea and East China Sea. In its official dialogues with the United States, Japan, and ASEAN, it has made joint statements on those regional issues. It is seen as a bigger power in East Asian politics and security, though its role remains limited, partly due to its own choice.

In recent years, the United States and Japan have worked hard to develop political and security relations with India, encouraging India to play a bigger role in East Asia, partly to balance or counter the rise of China in Asia and the world. India itself has an interest in playing a bigger role to serve its long-term goal as a big power in the region and beyond. However, while India has been happy with greater attention from the other major powers, India has been a very independent power and does not want to follow any other power’s strategy or stick with one power against the others in Asia. Indeed, its long-term foreign policy has been “non-alignment.”4 India wants to have good relations with all of the major powers in Asia – China, the United States, Japan, and Russia. This is India’s basic strategy.

India has a border dispute with China and is traditionally suspicious of China, seeing it as its number one competitor in Asia and the world.5 At the same time, India understands well that China is India’s largest neighbor, and in the last five years, its largest trade partner and an increasingly important investor. To Indians, China is, arguably, the most important country in almost all respects – more important than the United States or Japan. Thus, India knows that a good relationship with China is in its fundamental national interest. Indians may like the United States and Japan more than China, but they know that these countries cannot give India much. If relations with China are bad, neither can ensure India’s security and nor will they trade with and invest in India over the long run, compared to China. That is the reason that India has been cautious in its political and security role in East Asia. Its dialogue with the United States and Japan is matched by a similar one with China. It has a trilateral mechanism with the United States and Japan, and, at the same time, with China and Russia, and this year it joined the SCO as a full member. India issued joint statements with the United States, Japan, and ASEAN on maritime issues and the South China Sea, taking positions close to theirs;6 at the same time, it also issued joint statements with China and Russia on the same issues with positions close to theirs.7 It participates in military exercises with the United States and Japan in the Pacific, but also with China and Russia in the same areas. Therefore, India’s role so far has been balanced and moderate.   

Limitations of India’s Eastward Strategy

In recent years, India’s bilateral relations with all Southeast Asian nations have been improving. It has some conflicts with neighbors in South Asia and China, but it does not have problems with Southeast Asia countries. Ethnic Indians living in Southeast Asia are increasingly becoming a bridge, especially in Malaysia, Singapore, and Indonesia. India’s involvement may be seen to strengthen the United States, Japan, and Southeast Asian countries’ positions on some issues, such as maritime security; however, India’s involvement so far has not changed the balance of power in the region.

First, this is because India’s power is relatively small, compared to that of the United States, Japan, or China in the region. India’s trade with Southeast Asia is only 17% of China’s.8 Second, in the political and security area, India has not become a major player, given its preference for “non-alignment” – there is little sign to suggest India is going to change this policy. This means that India will not draw close to any particular country in Asia or the world on security issues. It does not play a big role in the North Korean nuclear and missile issue, and it has adopted a balanced policy on the maritime disputes in East Asia. On the one hand, this policy does not have any negative impact on its relations with any country in the region, including China, the United States, and Japan. On the other, this means India will not have major influence on those security issues.

Third, so far India’s military activity in East Asia has been very limited. This is a matter of strategic choice and limited military power. Indians perceive themselves as a major military power and military spending is growing. However, it is far behind major military forces in the region. In 2014, India’s military spending was $50 billion, while the US figure was $610 billion, China’s official number was $216 billion, and Russia’s was $84.5 billion.9

Lastly, India finds it difficult to play a major military/security role in East Asia, because in addition to its policy, East Asia – North Korea and the South China Sea – is relatively far away from India. Its “non-alignment” policy means it cannot have foreign bases. Given its main security interest in South Asia, it has to concentrate its military forces in its own country and deal with security problems nearby. It can occasionally dispatch naval ships to the Asia-Pacific for a short period of time, but so far, this is symbolic and without major substance – they are for joint military exercises, not regular duty. India can send few ships into the Pacific. Compared with the large naval and air forces of China, the United States, Japan, and even Russia, India’s military presence in the Pacific is of little significance.  

Different Perspectives on India’s Role in East Asia

So far, India has not taken a position on the disputes in East Asia. It has not sided with the United States or China. Therefore, India’s role in East Asia, including in Southeast Asia, is generally seen in China as balanced and neutral. Americans and Japanese tend to welcome and even encourage India’s “eastward movement” to play a bigger role in East Asian politics and security, because they perceive India in the Asia-Pacific region as a counterforce to China and its rising capacity and activity, even if India does not oppose China in the region.

To Southeast Asian countries, especially the Philippines and Vietnam, which have serious disputes with China in the South China Sea, India’s turn to the east is a “help,” because they see another non-Chinese force in the Asia-Pacific, which can counter China. However, even they understand that India’s role is limited, as it does not take a position on those disputed issues and its presence is sporadic and small in size, which cannot provide any real help to their militaries. Other Southeast Asian nations which do not have security problems with China do not care about India’s presence in terms of regional security. They understand that East Asian security depends more on the United States, Japan, and China, and their relations with these countries will not be affected, whether India is active or not in East Asia. Bilaterally, they want to strengthen economic, political, diplomatic, and social relations with India, but they do not have any major interest in India playing a large security role in the region.

China welcomes India playing a bigger role in the economic, social, and cultural arenas because China is interested in seeing its relations with India grow in these aspects. China respects Indian tradition and people, and thus, welcomes India’s growing influence in Asia and the world. Deng Xiaoping once said that the rise of Asia depends on the rise of both China and India; without the rise of the two Asian giants, the rise of Asia is not possible—at least, not complete.10 Deng’s idea reflects a prominent thought in China. The Chinese never liked or endorsed Japan’s role in the region and the world, but most Chinese embrace a greater Indian role in Asia and in the world, believing that the rise of India is positive, constructive, and inevitable.

Chinese have confidence in their relations with India because they believe that China has been bigger and stronger than India for thousands of years and will remain so in the future, even as India is rising. Chinese territory is much larger than that of India. Chinese population is larger, and even if India surpasses China in that respect, China would not object since having the largest population is not necessarily desirable. China’s economic size is currently about five times that of India. India’s economy may continue to grow quicker, but China believes India has a long way to catch up economically.

India has been developing nuclear and missile capacities, and it has some advanced Russian jets, surface naval vessels, and submarines. China, however, believes that it has always been militarily stronger. With military spending three times that of India, China believes that the gap between China and India is enlarging, not closing.

China does not like to see India play a serious security role in the Asia-Pacific, when issues involve China. First, China believes that almost all disputes are bilateral; all that is needed is for the concerned parties to engage to resolve or manage them. Third parties are unnecessary. Second, the Chinese believe that security issues, especially territorial disputes, are already complicated and difficult for the concerned parties to manage. The more actors are involved, the harder it is to resolve the problems. Even the United States, allied with both Japan and South Korea, cannot help the two manage and resolve their territorial and historical problems. How can India do something helpful?

The Chinese are worried that if India were to take a serious role in security problems in East Asia, including in Southeast Asia, it would likely take the side against China, in favor of countries such as the Philippines. India may even support the United States and Japan, which are increasingly trying to “balance” against China in the Asia-Pacific region, which the Chinese see as a “challenge” or even a “threat” to their interests and security now and in the future.

Conclusion

India has proposed an eastward strategy for more than two decades and has been working hard to promote it in recent years, to strengthen its power in Asia and the world, and to become a “first class” power in the long-term. However, so far, the strategy has been restrained, concentrating more on trade and investment through developing closer relations. India’s military has joined a number of military exercises with almost all the East Asian nations, but it has yet to become a major player in East Asia’s economy, international relations, and security.

India will continue to head east, but its role will be limited, given the way it defines its national interests, challenges in South Asia, and its priority in internal development: to quickly expand its economy, provide employment opportunities to a rapidly growing working age population, and improve its infrastructure, which remains backward even compared with that of smaller states in East Asia. India must also lift nearly one third of its current population, about 400 million people, from poverty.11

India is a superpower in South Asia, but its role is not absolute even in the small sub-region. India needs to improve its relations with Pakistan, a traditional enemy. It needs to defend itself against terrorism, including from neighboring Afghanistan and Pakistan. Finally, India needs to do more to maintain good relations with and influence over other countries in the sub-region: Nepal, Bangladesh, and Sri Lanka.12

In order to advance internally and externally, India needs to change its economic system and laws to allow others to do business more easily. Prime Minister Narendra Modi and the India government understand this well and have made great efforts to improve India’s economic environment. However, the Indian government as well as its society is very diverse. It has greater difficulty reforming and opening up than China. If India continues to take a moderate and balanced approach to the political and security issues in East Asia, then its role and influence is likely to remain limited. And if India changes its current approach and tries to play a bigger role in the political and security arena in East Asia, then India risks greater costs than gains.

If India decides to take a strong position on the security problems in East Asia, such as the South China Sea and East China Sea, it may gain in its relations with Japan, the United States, and one or two Southeast Asian nations. But at the same time, it would damage its relations with China, and perhaps also Russia. Such a role may not be good news to most Southeast Asian nations, who would like to see a balanced situation in the region among China, the United States, and Japan. They do not want to see any side becoming dominant. Substantial Indian involvement would damage the overall balance of power and stability in East Asia, including Southeast Asia.

1. Indrani Bagchi, “From Moral to Real: India on a Self-Building Path,” The Times of India, January 25, 2010, http://ariticles.timesofindia.indiatimes.com/2010-01-25/india/28138401_1_foreign-policy-strategic-autonomy-atal-bihari-vajpayee; Jean Dreze and Amartya Sen, An Uncertain Glory: India and its Contradictions (Princeton: Princeton University Press, 2013).

2. ASEAN stats, http://aseanstats.asean.org.

3. ASEAN stats, http://aseanstats.asean.org/; Department of Industrial Policy and Promotion, http://dipp.nic.in/English/Publications/FDI_Statistics/FDI_Statistics.aspx.

4. Harsh V. Pant, “Out with Non-Alignment, in with a ‘Modi Doctrine’,” The Diplomat, November 13, 2014; Sunil Khilnani et al. “Nonalignment 2.0: A Foreign and Strategic Policy for India in the Twenty First Century,” February 29, 2012, 13.

5. Hogskolan Halmsatad, “Sino-Indian Relations: Complex Challenges in a Complex Relationship,” http://www.diva-portal.org/smash/get/diva2:543006/FULLTEXT01.pdf.

6. “U.S.-India Joint Strategic Vision for the Asia-Pacific and Indian Ocean Region,” http://www.whitehouse.gov/the-press-office/2015/01/25/us-inida-joint-strategic-vision-asia-pacific-and-indian-pcean-region; U.S. Department of State, “US-Japan-India Trilateral,” http://www.state.gov/r/pa/prs/ps/2011/12/179172.html.

7. Renmin Ribao, April 21, 2016, 21.

8. SIPRI Yearbook 2015: Armaments, Disarmament and International Security. (Oxford: Oxford University Press, 2015), p.352.

9. Ibid.

10. Selected Works of Deng Xiaoping (Beijing: People’s Press, 1993), 282.

11. “World Bank Report: Moving Toward Greater Labor Market Flexibility: India’s Uneven Path,” World Bank, http://siteresources.worlbank.org/EXTNWDR2013/Resources/8258024-1352909193861/8936935-1356011448215/8986901-1380046989056/05a–Spotlight_5.pdf.

12. Annual Report 2003-2004,” Ministry of Defense, http://www.defesa.gov.br/projetosweb/livrobranco/arquivos/pdf/India%202003-2004.pdf; Rumel Dahiya and Ashok K. Behuria, India Neighborhood: Challenges in the Next Two Decades (New Delhi: IDSA/Pentagon Security International, 2012), 156.

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