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Indo-Pacific in India’s Act East Policy

MAHENDRA P LAMA

 

Emerging Indo-Pacific initiative propagates and promotes stability and prosperity through dynamism triggered by combining “Two Continents”: Asia that is rapidly growing and Africa that possess huge potential of growth; and “Two Oceans”: free and open Pacific Ocean and Indian Ocean.In a way, these are largely ideas like Shinzo Abe’s “Confluence of the Two Seas” to form a "Strategic Global Partnership" and Taro Aso’s “Arc of Freedom and Prosperity” that are gradually coming into the fruition.  This Arc area begins with Northern Europe and the Baltic states and through Central and Eastern Europe, Central Asia and the Middle East extends into South Asia and Indochina region.

With Japan and the US as core partners in the Indo-Pacific dynamics, India’s critical operational role is to balance China right at its doorstep.  India’s Foreign Secretary remarked that “India views the Indo-Pacific as a positive construct of development and connectivity, in which India can play a unique role by virtue of its geographical location and economic gravity. ……Our Act East Policy is at the heart of our connectivity orientation and a fulcrum of our broader approach to the Indo-Pacific.”  Subtly hinting at India’s deep opposition to China’s Belt and Road Initiative (BRI), Prime Minster Modistated “Connectivity is vital. ……. They must empower nations, not place them under impossible debt burden. They must promote trade, not strategic competition. On these principles, we are prepared to work with everyone. India is doing its part, by itself and in partnership with others like Japan – in South Asia and Southeast Asia, in the Indian Ocean, Africa, West Asia and beyond.”

Even in crucial areas like maritime transport in the Indian Ocean and the connecting routes,  a combined Japan-India fleet would be of tremendous match to a growing dominance of China. India’s total foreign flagged fleets are 165 with dead weight tonnage of 8.26 million as against Japan’s 2947 (18.96 million tons) and China’s 2138 (11.54 million tons) in 2019.  As against Japan’s  (77 %) foreign flag ships as percentage of  its total fleet, China’s 35 %, India’s would be hardly  16.19  percent. (Table 1)

                                                                                          Table 1

                                 Ownership of world fleet ranked by dead weight tonnage , 2019

 

China

Japan

India

World

                                          Number of vessels

National Flag

3987

875

854

22556

Foreign Flag

2138

2947

165

29128

Total

6125

3822

1019

51684

                                             Dead weight tonnage

National Flag

90930376

35532308

16602223

542098291

Foreign Flag

115370656

189588907

8256940

1420483749

Total

206301032

225121215

24859163

1962582040

Foreign Flag as % of total Fleet

34.91

77.11

16.19

56.36

Total Fleet as % of World Total Fleet

11.85

7.39

1.97

100

Source :UNCTAD, Review of Maritime Transport 2019, Geneva, 2019, p 37

 

Both Bangladesh and Myanmar have very negligible ownership of fleets. Similarly India does not figure among the top 25 ship owning countries in the world that constitutes 89 percent of the total ownership of ships of all varieties including oil tankers, bulk carriers, general cargo ships, container ships, gas carriers, chemical tankers, offshore vessels and others.  Japan owns over 10 percent and China almost 9 percent of the total global ships of  0.91 million. (Table 2)

 

 

 

 

 

 

 

Table 2

      Top Ship owning Countries as on 1 January 2019 

 

China

Japan

World

Oil Tankers

9666

8634

138283

Bulk Carriers

27833

35492

196638

General Cargo ships

5341

3577

40469

Container ships

14385

9489

105490

Other vessel types

24044

34910

429704

Gas carriers

3472

12268

86623

Chemical tankers

2959

4866

33825

Offshore vessels

9605

4828

167566

Ferries and Passenger ships

5145

3080

107472

Other/not available

2863

9868

33219

Total

81270

92102

910885

Source :UNCTAD, Review of Maritime Transport 2019, Geneva, 2019, p 39

 

 

This dominant transport and communication strength is a major reason why China possibly intends to make a solitary adventure as soon as it is given the access to Indian Ocean through the Bangladesh China India Myanmar (BCIM) route. Therefore,  Japan’s entry into the BCIM would not only make significant dent into the Chinese dominance but would also deter China from easily converting these instruments into deeper geo-strategic ventures. Besides, India-Japan cooperation could also lead to a drastic improvement in the median time spent in ports thereby increasing operational efficiency including in Bangladesh and Myanmar. This would provide a formidable competitive base for India vis-à-vis China in terms of both attracting and movement of freights. A comparison of median time spent in port among China, India and Japan demonstrate that Japanese operational efficiencies as reflected in port call and number of days by various carriers in its ports are over a half that of India and China in most cases.  (Table 3)

                                                Table 3

          Median time spent in port by number of port calls and market segment 2018

 

China

India

Japan

World

                                                                                 Number of Port Calls

 

205448

38999

180400

1884818

                                                                                     Number of Days

Liquid Bulk Carriers

1.10

1.42

0.31

0.94

Dry Bulk Carriers

2.00

2.49

0.90

2.05

Container ships

0.62

0.93

0.35

0.70

Break bulk carriers

1.17

0.82

1.12

1.11

Liquefied natural gas carriers

1.21

1.15

0.99

1.11

Liquefied petroleum gas carriers

1.00

1.27

0.32

1.02

Source :UNCTAD, Review of Maritime Transport 2019, Geneva, 2019, p 66

 

Besides the centrality of ASEAN  as a hinge of two oceans that serves as a core pillar of maintaining a secure and stable Indo-Pacific region through projects like East-West Economic Corridor and Sothern Economic Corridor, in South Asia through North East Connectivity Improvement Project in India and Bengal Bay Industrial Growth Zone, in Africa through South West Asia and the Middle East (e.g. Mombasa Port) and maritime security cooperation between the Indian Navy and the Japan Maritime Self-Defense Force and addressing nontraditional issues like climate change, piracy, illegal fishing and smuggling.

 

India’s  Contradictory Postures

However,  China finds India’s postures explicitly ambiguous, confusing and contradictory. Even in its partnership in the China dominated Asian Infrastructure Investment Bank (AIIB) India as the second highest share holder (8.36 percent) there is visible contradiction. Its conspicuous opposition to the ambitious Chinese project of BRI while at the same time joining and vigorously borrowing from AIIB which is supposedly designed to finance the BRI projects is an example of this ambiguity.

 Though the Articles of Agreement of the AIIB do not mention about its relations with the BRI, the Office of the Leading Group for Promoting the BRIclearly mentions that “in fulfilling its own purposes and missions, the bank (AIIB) has become one of the key multilateral platforms for building the Belt and Road, along with other multilateral development banks.” 

India has already started borrowing heavily from the AIIB for federal and province level projects in various sectors. Even in the Covid-19 management, India borrowed US $ 500 million and US $ 750 million from the AIIB in May and June 2020 respectively.

Within the course of last four years (2016-2020) of AIIB,  India borrowed over US $ 4.2 billion for 16 projects as on 15 September 2020 and alone constituted 17 percent of the total 93 projects and over 21 percent of the total approved loans of US $ 19.82 billion. This means financial dependency on China (the highest share holder of 29.78 percent in AIIB) has steadily shown an upward trend along with other fields like trade, investment and technology.  With the authorised capital stock of US $ 100 billion, AIIB membership grew from 50 countries in June 2015 when it was formally set up to 103 countries spread across five continents by mid 2020.

 

Japan and India’s Act East Policy
At the bilateral level, India and Japan signed a comprehensive economic partnership agreement (CEPA) in 2011 and have several far reaching projects including Japanese investment for  several infrastructure projects, extension of US$ 33.5 billion public and private investments in areas like infrastructure, connectivity, transport, smart cities, energy and skill development and also industrial townships and electronic parks. The convergence between India’s ‘Act East’ policy and Japan’s ‘Free and Open Indo-Pacific’ strategies has helped both nations align their policies on security cooperation, connectivity and in ensuring that the sea lanes of communication in the region remain open and secure and countries stick to a rules-based order.

 

TheJapan-North East Region (NER) of India cooperation started during the regime of Prime Minister Manmohan Singh (2004-2014) and has now consolidated  under Prime Minster NarendraModifurther thereby bringing development of India’s NER as a concrete symbol of developing synergies between India’s Act East policy and Japan’s ‘Free and Open Indo Pacific Strategy.’  Japan robustly reconfigures its pivotal role in India’s Act East policy to connect with ASEAN and the East Asia region. Besides to some extent neutralizing Chinese BRI projects, Japan will acquire hugely unharnessed space and interconnected market to invest through its Expanded Partnership for Quality Infrastructure (EPQI) initiative and would fetch huge support to its own economic revitalization strategy. 

 

The Act East Forum  has also been established as a sequel to the Memorandum of Cooperation signed during Prime Minister Abe visit to India in 2017. The Forum will identify specific projects for economic modernization of India’s NERincluding those pertaining to connectivity, developmental infrastructure, industrial linkages as well as people-to-people contacts through tourism, culture and sports-related activities.  After holding rounds of meeting, it has identified five focused areas viz., connectivity, forest management, bamboo processing, disaster management and people to people contact. The Japan International Cooperation Agency (JICA) provided over  $610 million for Phase I of the North East Road Network Connectivity Improvement Project focussing in Meghalaya and Mizoram.  It has signed another agreement in 2018 to provide ODA of Rs 1,570 Crore. With this Phase III,  JICA’s cumulative ODA loan reaches Rs 11,900 crore under the North East Road Connectivity Project. Several Japan supported projects like Imphal Peace Museum at the Red Hills are already in place.

 

The NER makes an attractive sub-region for the Japanese industrial houses that are relocating from China. Sikkim could be a major attraction to these Japanese ventures and must gear up its physical, administrative infrastructure and human resources related preparations.  The striking similarity in cultural values and social practices could attract these units as such advantages could save these companies to realise full efficiencies of the hired people with less time and investment.

 

 

[Lama is former Member of  National Security Advisory Board, Government of India and a Senior Professor in JNU, New Delhi]

 

 

 

 

 

Sikkim at a Glance

  • Area: 7096 Sq Kms
  • Capital: Gangtok
  • Altitude: 5,840 ft
  • Population: 6.10 Lakhs
  • Topography: Hilly terrain elevation from 600 to over 28,509 ft above sea level
  • Climate:
  • Summer: Min- 13°C - Max 21°C
  • Winter: Min- 0.48°C - Max 13°C
  • Rainfall: 325 cms per annum
  • Language Spoken: Nepali, Bhutia, Lepcha, Tibetan, English, Hindi