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Indias Look East Policy and Now Act East

How can regional initiatives assist in Indias quest for greater market
share in ASEAN region?
Since independence, India has become a part of several regional
initiatives in the ASEAN region in order to establish a trading stronghold in
the region. Compared to China, the growth of Indian trade has been
comparatively slower. Certain initiatives over the next few years will
shape and determine the success of Indian Governments target to obtain
a greater market share. These are discussed below:

RCEP, which is the Asian version of NAFTA, will enable free trade
between major Asian countries such as Vietnam, Singapore, Indonesia,
Malaysia, Japan and China. Given that US and Russia are not a part of
this initiative, it provides a strong potential to target exports/imports
between the regional majors. It comprises of almost 40% of world
trade, providing easier access to a big trade market.

As pointed out during the lecture by Prof. N Ravi, trade is not only
dependent on manufacturing and trade initiatives, but it also draws on
human interaction via mediums such as academic exchanges, travel
and connectivity. Regional initiatives such as scholarship programmes
for international students to top-tier Indian universities and promotion
of tourism with ASEAN region can assist in sharing of ideas and
promotion of inter-regional interaction between businesses.

Prime Minister Narendra Modi has been actively building relationships


with various ASEAN countries such as Myanmar, Malaysia and
Singapore through visits and invites to their respective leaders. The
deals signed as a result of these visits have been widely publicized as
being beneficial for the countrys economy. The long-term effects of
these initiatives remains to be seen, but these are small steps towards
building strong trading relationships in the region.

ASEANIndia Free Trade Area as formed as of Jan10 has been


criticized for making the Indian economy vulnerable to exports by
ASEAN countries while providing limited benefits to Indian businesses
for exports. Regional initiatives directed specifically for exports will
control the negative impact of excessive imports into the Indian
economy, while providing extended markets for exports.

The neighbourhood first policy initiated by Government has been


instrumental in promoting exports of Indian high-tech products to
South-East Asian countries. Modifications to the foreign policy
promoting exports to neighbourhood countries is aiding the country in
exceeding exports targets in this industry facing major downturn in the
western regions such as Germany, Italy and UK. Such modifications of
foreign policies to include regional initiatives will drive the increase in
market share in the ASEAN region.

Regional initiatives such as free trade within ASEAN region help India
leverage its international relationships to bring resources, technology

and best practices from competing nations to further its own


development aimed at catalysing the Make in India campaign. In the
long run, the campaign will strengthen Indias share in the ASEAN trade
market.
The success of regional initiatives such as those mentioned above will
determine the success in improving Indias market share in the ASEAN
region. Proactive foreign policy measures by the Government can be big
drivers towards bringing about this change.