UPSC Mains 2016 GS Paper 2 Q18: model answer

In 1991 India lost its Soviet partner and nearly ran out of foreign exchange. Looking around, it saw South-East Asia growing at 7–8% a year. The Look East Policy, begun under P.V. Narasimha Rao, was India's bet that its future lay to the east.

The post-Cold War context

• End of bipolarity; the US as sole superpower.
• Rise of ASEAN and East Asian economies.
• India's own liberalisation needed markets and investment.

Economic dimension

• India became an ASEAN sectoral partner (1992), dialogue partner (1996) and summit partner (2002).
• ASEAN–India FTA in goods (2010) and in services and investment (2015).
• Trade with ASEAN grew to over $120 billion; Singapore became a top source of FDI.
• CEPAs with Singapore, Japan and South Korea.

Strategic dimension

• Defence ties with Vietnam, Singapore and Indonesia; naval exercises.
• Membership of the ASEAN Regional Forum (1996) and the East Asia Summit (2005).
• Engagement of the North-East through Myanmar: the Kaladan project and the trilateral highway.
• A quiet hedge against China's rise.

Evaluation

• Gains: deep political trust, trade growth and a seat in Asian architecture.
• Gaps: slow connectivity projects, a widening trade deficit with ASEAN, and India's exit from RCEP in 2019.

Act East (2014)

The upgrade added security, connectivity and the Indo-Pacific: BrahMos sales to the Philippines, the Quad, and a review of the ASEAN FTA.

Look East turned India's face from the West to the East; Act East is the attempt to turn that look into presence.