India and China: Rivals or Partners in Southeast Asia?

In the 1950s and 1960s, India was enthusiastic promoter of Asian regionalism. As the second largest country in Asia, in 1967 India even suggested the formation of Asian Council, believing such broad based economic organization of all countries in should be formed so that no single country or group of countries from or outside can dominate any country in Asia (Sridharan 1996, p. 46). However, India's decision to retain the membership of the Commonwealth after its political independence indicated that India mainly conceived its development in collaboration with the Western world (Dixit 1998, p. 75). Moreover, India's incapacity and economic weakness resulted from its wrong economic policies, such as an inward-oriented strategy of economic self-reliance through import-substitution and building heavy industries (Nayar and Paul 2003, p. 99). Moreover, the influence of geopolitics in the Cold War era made it impossible for New Delhi to reach out beyond the Indian subcontinent and develop all-round relations with ASEAN. (1) As the Cold War ended in the early 1990s and the general trend regionalism emerged globally and China's influence increased in Southeast Asia, India again realized ASEAN's importance in terms of politics, economy, and diplomacy, and consequently launched its policy, the focus of which was how to become actively engaged in Southeast Asian affairs in the changing post-Cold War era. India's involvement and growing role have brought forth different conceptions of East Asian regionalism, the impact of the India factor on future Sino-ASEAN relations, as well as the significance of China's changing perceptions of India's rise and its role in Southeast Asia, and what approaches China is and will be taking. India's New Policies ASEAN India's Look East policy was initiated in 1991 after the Cold War when India faced a number of successive strategic and economic challenges which threatened its political survival (Rao 1996, p. 763). The breakup of the Soviet Union deprived India of its main trading partner and source of cheap imported oil. India was forced to purchase oil at market prices which were inflated because of the First Gulf War in 1990. India, therefore, had to realign its foreign policies and implement, what it refers to as a move towards big power strategy, with the characteristics of a multi-directional foreign policy. Its Look East policy is important component of this development strategy. In attempt to soothe the strategic antagonism between India and ASEAN and enhance ties with the Southeast Asian region, India signalled its intention to join the Pacific Economic Cooperation (APEC) grouping and the Europe Meeting (ASEM) in order to prepare for its eventual leap into the global market as a dominant economic player. During this first phase, India's Look East policy was implemented with the purpose of rebuilding its economic relations with Southeast so as to diversify trade away from its main trading partners in North America and Europe. The early 1990s also saw the acceleration of economic reforms in India, and a closer economic relationship between ASEAN and India started to look promising to both. ASEAN countries realized that with the rise of India, they can reduce their dependence on Japan, the Western countries, and China in trade and economic relations. They responded positively to India's initiatives and advances, and accepted India as a sectoral dialogue partner of ASEAN in the fields of trade, investment, and tourism in 1992. In the 1995 ASEAN Summit, Singapore's Prime Minister Goh Chok Tong proposed to elevate India to full dialogue partnership, and this proposal received the consent of all the ASEAN leaders. In 1996, India began participating in the ASEAN Post-Ministerial Conferences and the ASEAN Regional Forum (ARF). This was the first time in 50 years for India to attend a multilateral dialogue on politics and security in the Asia-Pacific region, indicating India's Look East policy had reached important milestone. …