Act East Policy

Union Finance Minister Arun Jaitley in February 2015 announced setting up of manufacturing hubs in CMLV countries, namely, Combodia, Myanmar, Laos and Vietnam. He said the government would endeavour to cultivate extensive economic and strategic relations in South-East Asia.

In order to catalyse investments from the Indian private sector in this region, a project development company would set up the manufacturing hubs in CMLV countries through separate special purpose vehicles (SPVs). Under the leadership of Prime Minister Narendra Modi, the government rightly made its relations with East Asian neighbours a foreign policy priority at a time when US's 'pivot to Asia' was gaining currency.

Foreign Minister Sushma Swaraj proposed a new outlook calling it ‘Act East policy’ on the lines of the ‘Look East policy’ which was introduced during the government of Prime Minister P V Narasimha Rao but seriously implemented during the successive administrations of Atal Bihari Vajpayee and Manmohan Singh.

Modi expanded the focus of the government policy after sensing that Phase I and Phase II of the “Look East Policy” could not achieve their fullest potential, despite being success stories. Through the “Act East Policy,” India is not only striving to engage ASEAN member-countries, but also the countries of the wider Asia-Pacific region in political, strategic, cultural, and economic domains. This is manifested in ongoing attempts to strengthen ties with Australia, Japan, and South Korea among others. Modi’s Japan, Australia, Malaysia and Singapore tours may be seen as steps in that direction.

From India's point of view, another reason to 'Act East' now is that these economies share close cultural and historical links with us, apart from having a long experience of trade-led development and economic growth. These countries can and are willing to help India in leveraging their expertise on smart urbanization and economic development. India needs to play a proactive role within the South Asian region. At present, the intraregional trade is close to 5 percent within the South Asian economies while for the Association for South East Asian Nations (ASEAN), it is close to 25 percent.

US Rebalancing towards Asia, Japan’sDemocratic Security Diamond, and China’s Maritime Silk Road all have political-strategic grand-designs to shape the regional architecture in their own way. In that context, India’s greater role and participation in stabilizing the security architecture of the region is pivotal, according to Rahul Mishra of Indian Council of World Affairs, as per www.theasanforum.org.