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ASEAN-India Connectivity

This is the transcript of a speech that the author gave at the 2018 ASEAN-India Business Summit, organised by the ASEAN-India Business Council. Click here to view details of the event.

It is a privilege to participate in the ASEAN-India Business Summit 2018. This is a prestigious conference, hosted by the Ministry of International Trade Malaysia, the High Commission of India, the Federation of Indian Chambers of Commerce and Industry (FICCI), and the ASEAN Business Advisory Council. I am grateful to all these institutions for their gracious invitation. I am particularly thankful to Dato Ramesh Kondamal, co-chair of AIBC (ASEAN) for facilitating my participation.

The conference theme this year – “Towards Building Strategic Partnership Between ASEAN and India in the Era of 4th Industrial Revolution and Digital Economy” is of exceptional significance and relevance. This needs to be situated in the context of ASEAN countries’ slowly growing linkages and cooperation with India’s North Eastern states as part of the nation’s Act East Policy that has taken many strides in recent years. The specific topic for this Panel Session 1 is: ‘Enhancing Physical and Virtual Connectivity Between ASEAN and India.’

I am no technology expert, but I do study and monitor global affairs from the strategic, geopolitical and geo-economic perspectives. One can clearly see what is happening today. It can be asserted that the 4th Industrial Revolution is now upon us, and it is set to change the way we live, work, do business, and connect with each other. It is evident that the world has traversed a long distance from the times of the earlier revolutionary catalysts – steam engine, electricity and computer – which impacted the world. Now Artificial Intelligence (AI), blockchain, machine learning, 3D printing, robotics, analytics and Big Data, quantum computing, biotechnology and nanotechnology have begun transforming our lives fundamentally. It represents the fusion of technologies, blurring the lines between the physical, digital and biological spheres.

As Prime Minister Narendra Modi stressed at the FinTech Festival in Singapore recently: “From desktop to cloud, from internet to social media, from IT Services to Internet of Things, we have come a long way in a short time. There is daily disruption in business.”

Experts inform us that the 4th Industrial Revolution is driving Globalization 4.0, demonstrating once again the inextricable linkage between technology and economic development. One of the key features of the present phase is that ‘the Global Village’ is anchored on digital foundations. Digital technology, infrastructure, platforms and services would determine the direction and contours of global economy and the place national economies will have in it.

India’s approach on digital issues has been receiving wider notice by the international community. The nation’s digital profile and footprint is one of the fastest growing in the field. Equipped with over a billion mobile phones and digital identities and over 500 million Internet users, India’s data consumption is already the highest in the world. Over 200 million Indians are on social media platforms. In the last year (2017) alone, over 200 million Indians took to mobile banking and digital payments.

Rapidly widening use of digital services tends to increase the inclusiveness of economic transformation, a central goal of policymakers in India. This phenomenon, in turn, will increase the country’s productivity as well as enrich its democratic institutions. It is officially estimated that at the current rate of growth, India’s digital economy shows the potential to reach $1 trillion by 2025.

India has begun the process of transitioning to Industry 4.0, with numerous initiatives in e-governance, encouraging the start-ups scene, increasing use of technology in e-commerce and expansion of FinTech. In this context, the setting up of the Centre for the Fourth Industrial Revolution in India by the World Economic Forum in collaboration with the Niti Aayog, an influential government think tank, should be beneficial in co-designing new policy frameworks and protocols for emerging technology. The Centre may focus initially on its priority to utilise blockchain and AI for tackling some of the country’s most pressing socio-economic needs.

Speaking specifically of Artificial Intelligence (AI), it may be recognized that the technology disruption it brings about is “once-in-a generation-phenomenon.” Niti Aayog has suggested that there is a need to strike “a balance between narrow definitions of financial impact and the greater good”, while devising adoption strategies in respect of AI. It favours the use of AI in five specific sectors, namely, Healthcare, Agriculture, Education, Smart Cities and Infrastructure, and Smart Mobility and Transportation.

As strategic partners, India and ASEAN need to cooperate, consult and learn more from each other in crafting their approach and strategy on the use of digital technologies. What is required is the launch of an intensive and sustained dialogue among our digital experts, business leaders and other stakeholders with the aim to profit more from each other’s experiences, strengths and best practices. This panel discussion is a significant step forward towards promoting mutual understanding.

Let me now turn to the question of Connectivity, specifically how to prioritize various forms of connectivity between ASEAN and India, expanding, enriching and diversifying them to ensure greater mutual benefit than in the past.

As India sees it, connectivity is not just a new buzzword for globalisation, but an important imperative for all economies seeking accelerated growth.

As Foreign Secretary Vijay Gokhale put it recently; “Our efforts are focused on connecting our North East with the dynamic economies of South East Asia and enhancing connectivity within the North East itself.”

My first suggestion is that physical and digital connectivity should not be seen as mutually exclusive: it is not a question of either/or; we need both; we need more of them; and we need them fast.

On physical connectivity, we cannot avoid a reference to the flagship infrastructure projects, namely the Kaladan multimodal transportation project and the India-Myanmar-Thailand (IMT) highway project. Government sources have publicly assured us that “considerable progress” has been achieved in implementing them. It is thus a matter of time before they get completed and become fully operational. What the ASEAN side now needs to focus on is an early finalization of the trilateral Motor Vehicle Agreement, and to join the Indian side in initiating preliminary work about the proposed extension of the IMT highway project to the CLV region, comprising Cambodia, Laos and Vietnam. The proposal to develop an economic corridor along the trilateral highway and the feasibility of its extension to the CLV region should also be considered seriously.

As regards maritime connectivity, work needs to be speeded up to conclude negotiations for the ASEAN-India Maritime Transport Agreement. On civil aviation links, an imbalance and inequity continue to mark the network of flights. A sizeable number of flights link Indian cities with Singapore, Malaysia, Thailand – and now Indonesia, albeit on a limited basis. Yet, on the other hand, tourists, businesspersons and others continue to suffer, i.e. those who wish to travel between India and the other five ASEAN countries – the Philippines, Brunei, Myanmar, Cambodia and Laos.  Remedial measures are needed.

On digital connectivity, beside the special dialogue among stakeholders suggested above, the ASEAN side is urged to seriously explore opportunities offered by the $1 billion concessional credit programme proposed by the Indian government in order to promote physical infrastructure and digital connectivity. Its importance was highlighted by the Delhi Declaration of 25 January 2018. The gap between the positions adopted by the two sides needs to be bridged soon.

Secondly, the connectivity of ideas, mindsets and institutions is of increasing importance. Some refer to it as “knowledge connectivity.” This will be achieved only if we continuously expand the space of interactions and dialogues among our peoples. The more platforms we are able to create for exchange of ideas, experiences and best practices involving various segments of our polities, the more beneficial it may be for our relationship in the future.

Finally, connectivity through an appreciable and sustained increase in trade and investment flows should be given its due salience. India-ASEAN trade continues to hover around $80 billion level, well below the target of $100 billion that we had hoped to achieve by 2015. Two-way investment flows stand at around $120 billion. This too needs an energetic push.

The big idea, in this backdrop, is to make speedy progress in negotiations that result in the signing of the RCEP agreement. The 16 governments concerned have given themselves another year to achieve this target. Let me assure you that there is growing support in India for our working with ASEAN and other partners for concluding “a modern, comprehensive, high-quality and mutually beneficial” agreement to spur expansion of trade and investment in the region. But India’s fundamental concerns should be kept in mind – and respected.

In the end, may I recall how, in course of my last visit (July 2018) to Kuala Lumpur with a delegation of scholars, Dato Ramesh Kondamal had wisely suggested that business people of ASEAN countries should be accorded a patient and empathetic hearing by Indian officials so that the former’s grievances are addressed suitably. A similar treatment needs to be extended to Indian businesses facing constraints in ASEAN countries. An effective mechanism for this purpose will no doubt go a long way in helping our 11 nations to secure faster growth in trade, investment, technological exchanges and connectivity. It is a goal well worth pursuing – with all our vigour and determination!

Thank you for your attention.

Rajiv Bhatia is Distinguished Fellow, Foreign Policy Studies, Gateway House

These remarks were given at the ASEAN-India Business Summit on November 27, 2018. Click here to read details of the event. 

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