Economic And Strategic Orientation Look East Policy


It is the so-called "Look East" policy-an economic and strategic orientation to South East Asia.The developing relations between India and Burma are a relatively recent phenomenon. Not only is India keen to gain access to Burma's oil and gas, but a land route through the country to South East Asia is an essential component of its broader "Look East" policy.In January, India signed an agreement in principle with Burma and Bangladesh to build a pipeline from Burmese offshore gas fields via Bangladesh to India. India has also gained Burmese assistance in cracking down on various armed separatist movements based in northeastern India. The state of Assam currently produces about 15 percent of India's oil needs.

The "Look East" policy was aimed at developing closer relations with the so-called

economic "tigers" of South East Asia. In 1997, India became a full dialogue partner of the region's main grouping-the Association of South East Asian Nations (ASEAN). To demonstrate the close relations he proposed an India-ASEAN motor rally from South East Asia through Burma to India. He outlined a program of free trade agreements with the countries of the region.

Under the Vajpayee government, India developed closer strategic and economic relations with Washington. India has trade agreements with most ASEAN countries and the region currently accounts for $US13 billion or about 10 percent of India's total foreign trade. India is also seeking strategic relations in South East Asia. India faces competition from China for influence in South East Asia, but the chief potential obstacle to its "Look East" strategy is Washington, rather than Beijing.In the recent decade, India has opened its economy to international trade and has launched initiatives to forge closer trade and economic ties with immediate neighbors.

This paper looks at the economic opportunities for the states of the North East in India's emerging trade strategy in the region, especially its 'Look East' policy and the spate of preferential trading arrangements (PTA) and the free trade arrangements (FTA) with neighboring countries like Nepal, Bangladesh, Sri Lanka, Myanmar and Thailand. The last section evaluates the prospect for the North East through regional trade and economic exchanges with the neighboring countries.

The North East region has a 37 km. link with India, but 4500 km. of border with the newly emerging nations of Asia, say China, Burma (Myanmar), Bangladesh, Bhutan, and Nepal. All products consumed in the North East came to be imported from distant manufacturing regions in India. The North East's ties with the Indian hinterland have been expensive and regressive.India is also committed to regional trade through initiatives like South Asia Growth Quadrangle(SAGQ), South Asian Subregion for Economic Cooperation (SASEC), Bangladesh-India-Myanmar-Sri Lanka-Thailand-Economic Cooperation (BIMSTEC), etc. Last year, India signed a Free Trade Agreement with Thailand.

During the 1990s, India offered Preferential Trade Arrangements (PTA) to all the member countries of SAARC/SAPTA. India offered unilateral trade concessions to its neighbours and encouraged them to export to India.

India's Trade with Asia and North East Neighbours*

India Total Trade ($ mill) 29244.2 40418.8 76490.9 140486

Share of Developing Countries 16.0 21.1 26.1 30.3

* North East Neighbours include Bhutan, Nepal, Bangladesh, China and Thailand

It is hardly surprising that with closed borders and open ports, the North East is not part of India's trade expansion strategy with eastern neighbours.

Sanjib Baruah (2004), 'Between South and Southeast Asia Northeast India and Look East Policy', Ceniseas Paper 4, Guwahati.India (2004), Economic Survey, Delhi.

India (1997), Transforming the North East, High Level Committee Report, Planning Commission, New Delhi.NCAER (2004), East India: Human Development Report, New Delhi, OUP.

Former Prime Minister of India Atal Bihari Vajpayee had India's 'Look East' policy in mind when he proposed at the ASEAN-India summit in Bali (Indonesia) 2003 the holding of an India-ASEAN car rally "to draw dramatic attention to our geographical proximity".The India-ASEAN car rally has since become a reality. While addressing the recent meeting of the North East council Dr Singh said the North East India could be a gateway for India for the ASEAN and East Asia it is for the North East Council to build on this. During his visit to the North East In November 2004 Dr Singh described the region as the "gateway" to India's engagement with the Association for South East Asian Nations and with the sub-regional grouping, BIMST-EC (Bangladesh, India, Myanmar, Sri Lanka, Thailand-Economic Cooperation)