Why India must bother about BRI & RCEP

Lee Kuan Yew would not have minded Subrahmanyam Jaishankar, whom he got to know as India’s high commissioner to Singapore, saying that “the centrality of ASEAN to Asia is not what it is (sic) used to be”. But India’s retreat from the Asian stage under Jaishankar’s watch as external affairs minister would have confirmed his worst apprehensions about Narendra Modi’s prime ministership.

ASEAN, the Association of Southeast Asian Nations, was not Lee’s brainchild. He stressed when I was writing Looking East to Look West: Lee Kuan Yew’s Mission India that Thailand played the key role in its creation. His own political objectives were twofold. First, to build up tiny Singapore’s economy so that it was not swept under by the tides of great power politics. And second, to ensure that a prosperous India was the lead player in taking over Britain’s Asian role and balancing China’s rising might. As Jagat Mehta, India’s foreign secretary from 1976 to 1979, put it, Lee “understood India’s potential before we did”. Sadly, he might feel that the potential is now being squandered after being carefully husbanded by PV Narasimha Rao (whom he hailed as India’s Deng Xiaoping) and Manmohan Singh, whom he came to value as a respected friend.

So far as his own city-state is concerned, Lee was spectacularly successful. He boasted that Singapore had Asia’s highest per capita income after Japan and the most dissatisfied people. For the discerning Jagat Mehta, Singapore was “the only former colony to make a success of independence”. The survival of that independence called for a certain regional architecture that remains incomplete if India leaves the field open to China. Chagrin is understandable at having to follow China’s initiatives but only the sluggards in Delhi, loud with bombastic verbiage but slow to act, are responsible for not coming up with sparkling new ideas. 

Whatever the reason, India’s earlier refusal to participate in the Belt and Road Initiative (BRI) and now in the Regional Comprehensive Economic Partnership (RCEP) tells the world that this country of 1.2 billion people and a $3 trillion economy shies away from playing a major part in shaping Asia’s future. 

It is coincidence that soon after the RCEP’s rejection, Sri Lankans elected as president Gotabaya Rajapaksa, the defence secretary identified with the Hambantota port which greatly increased indebtedness to China and added to India’s concerns regarding China’s Indian Ocean ambitions. The development highlighted the need not only for constant vigilance but also intelligent responses that don’t alienate India’s neighbours. The 10 ASEAN members, Japan, South Korea, Australia and New Zealand joined the RCEP expecting India to do so too. They have friendly economic and political relations with both Asian giants and know that a continental concert becomes impossible if one stands aloof. The RCEP and BRI supplement each other in Beijing’s strategy to ensure the smooth flow of exports and imports. Geography demands India’s inclusion. 

The objection to the BRI is politically and emotionally understandable but not logically sustainable. If it’s because Pakistan illegally ceded Indian territory to China, then Pakistan, not China, is the main offender. If the charge is of forcible occupation of Indian territory, then China should be penalised for Aksai Chin. Consistency of principle isn’t static thinking. As for the RCEP, it’s defeatist to fear being swamped with cheap Chinese products. A vigorous self-confident economy should be able to undertake reforms and regulatory measures instead of seeking refuge in protection. The longer India holds back, the more difficult it will to adjust to globalisation and boost production to create jobs for millions of new entrants every year into the labour market.

Ideally, India’s labour-intensive and low-cost manufacturing should enjoy financial and logistic support from China to the benefit of both countries. Even if the time for such cooperation has not yet come, institutions like the Asian Infrastructure Investment Bank (India is the second largest shareholder after China), the Shanghai-based New Development Bank (Brazil, Russia, India, China and South Africa are equal partners) and the Bangladesh-China-India-Myanmar Forum, which met in Kolkata in late April, indicate divisive politics can be put aside in the interests of growth.

Lee would have said it’s like returning to the cooperative climate in which India and China shaped Southeast Asia, giving Indo-China the culture and traditions of both civilisations. With Asia resurgent, he looked forward to a repetition of that evolutionary process. “If India is not here, I think there will be a lack of balance,” he said, adding confidently, “but I think India will come”.

Amen to that.



Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel