Eastward Ho!

Riding the crest of the economic tide, Manmohan will sweep into the region—first to Japan, then Malaysia, and finally to Hanoi, to participate in the India-ASEAN Summit as well as the East Asian Summit. India wants to integrate with the economies of the region, hoping to build symbiotic ties long desired for. New Delhi also wants to play an important role in ensuring peace and stability, providing security to the sea lanes considered vital to India’s interests.

But China’s shadow will loom large over Manmohan’s talks with the ASEAN leaders. As Srinath Raghavan of Delhi’s Centre for Policy Research says, “It will surely provide the mood music during discussions with leaders of the region”. This is partly because Beijing’s promise of a ‘peaceful rise’ has been found wanting, prompting many commentators to observe that China’s phenomenal clout, on display during last year’s economic crisis, has persuaded it to drop the first word from its ‘charm offensive’.

Indeed, it wasn’t particularly charming of China to claim exclusive rights over the South China Sea and the many islands in the region, a claim several of its neighbours also make. Then, early September, the Japanese arrested the personnel of a Chinese trawler that had allegedly rammed into their coast guard vessel near the disputed Diaoyu/Senkaku islands in the East China Sea, stoking the subterranean tension perennially present in Sino-Japan relations. Matters simmered down on his release, but the episode had many countries mulling the consequences of China’s rise.

It will be quite another ball game at the East Asia Summit, a multilateral event in which China too will participate. Obviously, diplomacy will require that parleys be held on the issue of peace and stability of the region without naming China. (You can’t do that without incurring China’s wrath). But the inclusion of Russia and the United States in the East Asia Summit for the first time testifies to the reluctance of the region’s players—and also those outside it—to see a single power (read China) dominate that swathe of Asia.

So what kind of role is India likely to play? “India will do a soft balancing against China,” Michael Yehuda, author and professor emeritus of the London School of Economics, told Outlook. “India does not want China as its enemy but New Delhi also wants to deepen its relations with the East and Southeast Asian countries.” This requires tightrope walking—engaging other countries in the region, not wanting to isolate China, and yet ensuring the sea lanes don’t get roiled because of the choppy waters of international relations. India will have to attempt such calibrations, says Yehuda, because even as “it grows, its economic and military power is much less than that of China’s”. And, therefore, he predicts, India will eschew the option of sending its navy to join the fleet against China.

But if China continues to behave aggressively in East Asia in pursuit of its own parochial nationalist interests, says Yehuda, it will inevitably evoke a counter-reaction—and that’s when India will have to be careful. “India should not be drawn into an anti-China coalition. Rather, it should balance resistance to egregious Chinese moves with maintaining cooperative relations with Beijing in those sectors where interests overlap,” Yehuda said.

However, China’s new aggressive posture is driving many of these countries to diversify their investments, and India is definitely emerging as one of the most attractive destinations for that. Proof of it will be Manmohan signing a Comprehensive Economic Partnership Agreement with Japan, which is already engaged in the Delhi-Mumbai industrial corridor project (worth $80 billion). A section in Japan favours investments in India’s civil nuclear market. This search for new areas of investment in India is also true of those countries likely to benefit from the India-ASEAN free trade agreement. (In 2012, India will host the India-ASEAN Summit.)

But this search for investment could be impeded, says N. Ravi, former mea secretary, by the lack of an adequate ‘support system’, which has been the experience of most here. For example, the Posco project’s woes over environmental clearance in Orissa have made many in the region worry about investing in India, says Ravi. South Block agrees but also insists that the advantages accruing from investing in India outweigh the hurdles they encounter in conducting business here. It’s this view Manmohan will project on his visit to East and Southeast Asia even as his team back home bolsters the creaking infrastructure and create a favourable climate for foreign investors.