India’s Look East Policy: Prospects And Challenges For North-East India

The disruption of old trade routes by the colonial rulers, India’s import substitution economy after 1947 and the 1971 Bangladesh war deprived Northeast India of its natural markets. Of late, there has been much talk about the potential of India’s Look East policy in transforming the region. The inclusion of Northeast as an important component of this policy in 2003 is dubbed as the new paradigm of development in the Northeast development perspective. The policy envisages the region not as the periphery of India, but as the centre of a thriving and integrated economic space. Thus, many people see it as an excellent opportunity to integrate not only with Indian mainland economy but also with India’s neighboring countries and even beyond. In contrast, others view this policy as an extension of India’s new imperialism in a new form in that the northeastern will only provide a bridge between the rest of India and Southeast Asia. The main argument of the critiques is that India is more concerned with the East but not to India’s Northeast. The present paper therefore attempts to analyze the prospects and challenges of India’s Look East policy in the context of Northeast India.

The Look East Policy

Initiated in 1991, India’s Look East policy marked a strategic shift in India’s perspective of the world. It is ‘not merely an external economic policy, it is also a strategic shift in India’s vision of the world and India’s place in the evolving global economy.’1 The essential philosophy behind this policy is to forge closer and deeper economic integration with its eastern neighbors. It is rather a late recognition of the strategic and economic importance of the region to India’s national interests. The Look East policy is the product of various compulsions in the post-Cold War era. The focus on economic content of international relations, emergence of regional economic groupings, forces of globalization, and slow process of economic integration within South Asia and China’s growing assertiveness in the Asia Pacific region compelled India to rethink the basic parameters of its foreign policy. The growing trends toward regionalism and India’s apprehension of being marginalized and isolated in the post-Cold War international system are the main reasons for paying more attention to the rapidly growing economies of East and Southeast Asia.2 The geographical proximity of Northeast with East and Southeast Asia compelled India to focus on the Northeastern region.3

Initially, the focus of India’s Look East policy was to forge closer economic ties with ASEAN member states. Consequently, India became a Sectoral Dialogue Partner in March 1993, a Full Dialogue Partner in 1995, a member of the ASEAN Regional Forum in July 1996 and finally to a Summit Level Partner in 2002. The second phase, which began in 2003, is more comprehensive in its coverage, extending from Australia to East Asia; with ASEAN as its core.4 The new phase marks a shift in focus from trade to wider economic and security cooperation, political partnerships, physical connectivity through road and rail links. Thus, India-ASEAN cooperation now covers broader fields including trade and investment, science and technology, tourism and human resource development, transportation and infrastructure, and health and pharmaceuticals. India signed ‘Long Term Cooperative Partnership for Peace and Prosperity’ with ASEAN, which is the1 corner stone of India’s Look East policy.5 India finally signed the ASEAN-India Free Trade Agreement (FTA) with the ten members of ASEAN in August 2009.

Towards sub-regional cooperation

In 1997, a sub-regional economic grouping called BIST-EC (Bangladesh India Sri Lanka Thailand ‘“ Economic Cooperation), comprising Bangladesh, India, Sri Lanka and Thailand was established with a view to strengthen and reinforce India’s Look East policy. The grouping came to be known as BIMSTEC or the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation with the addition of Myanmar, Bhutan and Nepal. When India initiated BIMSTEC in 1997, it received strong support from Thailand, which also saw it as a political and economic forum to bridge Southeast Asia and South Asia. The main aim of this group is to create an enabling environment for rapid economic development through identification and implementation of specific cooperation projects in the sectors of trade, investment and industry, technology, human resource development, tourism, agriculture, energy, and infrastructure and transportation.6 At the Second Ministerial Meeting in Dhaka on November 19, 1998, six areas of cooperation were identified: trade and investment, technology, transport and communications, energy, tourism, and fisheries. India promotes BIMSTEC to establish economic links with peninsula member countries of ASEAN to boost the development of its seven Northeastern states.7

India is also a member of the Mekong Ganga Cooperation (MCG) Project, which also includes Myanmar, Thailand, Laos, Cambodia and Vietnam. It came into being on November 10, 2000 where the representatives of the six member states met at Vientiane and came up with a set of guidelines known as the ‘Vientiane Declaration’. The declaration outlined the areas for institutional interaction based on assessment of the capabilities of its member states. In order to give a well-structured outlook to the initiative, a concept paper was worked out which outlined the agenda for cooperative efforts, where the project is primarily aimed at the development of three main areas for cooperation: tourism and culture, infrastructure and information technology as envisaged by the Vientiane Declaration. The MGC is an extension of India’s Look East policy and a reminder of its constant cultural interaction with Southeast Asian countries.

The Bangladesh-China-India-Myanmar Regional Economic Forum (BCIM Forum) is a Track II initiative, which advocates sub-regional cooperation on infrastructure development, enhancing economic integration and people-to-people contact by the four countries. This sub-region constitutes geographically contiguous units comprising the Northeastern states of India, Southern provinces of China, Bangladesh and Myanmar. The underlying object behind BCIM cooperation is the integration of these strategically located sub-regional areas, particularly Northeast India, Bangladesh, Myanmar and South West of China in the areas of trade, investment, energy, transport and tourism. The BCIM initiative has the potential to bring three of India’s most important neighbors closer in a joint pursuit of common prosperity through the increasing use of mechanisms of regional integration. Taking note of the importance of such initiative Rajiv Sikri noted that, ‘It is not just that we are neighbors sharing common borders; all of us also face similar opportunities and challenges in our respective quests for rapid economic growth, national development and prosperity of our people.

In our mutual relationships, there is increasingly greater focus on economic issues, which will enable us to realize the untapped potential of our economic cooperation and make it commensurate with the level of our political relationships.’8 Proper implementation of this sub-regional cooperation could combine the resources of the constituent members in 2 order to gain competitive edge in attracting both domestic and foreign investments and promoting export for the mutual benefit of the members involved. Therefore, there is an enormous potential for following up on the Kunming Initiative, especially the proposal to rebuild the Stilwell Road-the road from Ledo in Assam to the Myanmar Road that connects to Kunming-which was constructed during Second World War.

After eighteenth years, the Look East policy has yielded many benefits and supported India’s economic development with increasing bilateral trade between India and Southeast Asian countries and increased people-to-people contacts. The share of developing counties in India’s trade has doubled to about 30%, while Asia’s share has doubled to 24.2%. With outward looking policies India’s foreign trade, which was below $40 billion in the early 1990s, has risen dramatically to US$ 140 billion by 2003.9 Trade with ASEAN countries increased from US$ 15 billion in 2004 to US$ 30 billion in 2007 and further to more than US$ 40 billion in 2009. A need is felt to focus the benefits of the Look East policy more sharply on India’s Northeastern region.

Look East policy and the Northeastern region

While colonial rulers built railways and roads mostly to take tea, coal, oil and other resources out of Assam, the disruption of old trade routes remained. Sanjib Baruah called termed it as ‘colonialism’s most enduring negative legacy’.10 In this post-Cold War globalised world there is a prospect of undoing the effects of colonial legacies. Since Northeast India is a natural bridge between India and Southeast Asia, economic integration with its transnational neighbors is expected to open up new opportunities for the region. According to Rajiv Sikri, India’s Look East policy ‘envisages the Northeast region not as the periphery of India, but as the centre of a thriving and integrated economic space linking two dynamic regions with a network of highways, railways, pipelines, transmission lines crisscrossing the region.’11

In the second phase, which begin in 2003, the Look East Policy has been given a new dimension wherein India is now looking towards a partnership with the ASEAN countries, both within BIMSTEC and the India-ASEAN Summit dialogue as, integrally linked to economic and security interests of the Northeastern region.12 The first outcome of India’s conscious efforts is the Indo-Myanmar Trade Agreement signed on January 31, 1994 for the establishment of trade based on equality and mutual benefit. The agreement specified that trade should be conducted through the designated custom posts, viz, (a) Moreh in Manipur and Tamu in Myanmar, (b) Champhai in Mizoram and Rih in Myanmar and (c) other places that may be notified by mutual agreement between the two countries. The border trade at Moreh and Tamu was formally opened on April 12, 1995.

The agreement initially provided for cross border trade in twenty-two products, mostly agricultural/primary commodities produced in the trading countries. In 2001, some more products were added to the list of tradable items. There are also efforts to open new trade route or reviving the ancient land trade route through Northeast, which would lead to economic development of the northeastern region. In practice, the agreement actually does not go much beyond according a formal sanction to exchanges traditionally going on between the local populations in the border areas of the two countries.13

Though these initiatives were the product of changing global scenario since the end of Cold War, it is also a step towards the fulfillment of the Mizo Accord, which promised to promote Indo-Myanmar border trade. The agreement also made cross-border trade and contacts legal which is, as Prabhakara observed, ‘a feature of daily experience, indeed a necessary condition of the people’s existence on both sides of the border.’ Outside the world of formal trade, he said, there are regular exchanges of goods and3 services of many kinds. Apart from the flourishing border towns, such traffic goes on even in the ‘obscure, almost invisible little settlements that dot the border.’14

To achieve the objectives of the Look East policy India is negotiating bilateral FTAs with East and Southeast Asian countries and has entered into a number of pacts and FTAs with Thailand and Singapore. There are also plans to create a free trade area with Brunei, Indonesia and Malaysia by 2011 and with the remaining ASEAN countries – the Philippines, Cambodia, Laos, Myanmar and Vietnam – by 2016. India’s trade with countries bordering the Northeast has seen the most dramatic expansion, with the share going up more the five times from 1.7% in 1992-93 to 8% in 2003-04. However, trade between Northeast India and its neighboring countries has been declining.

To facilitate trade and improve infrastructure in the region, India has concluded a number of bilateral and multilateral projects, aimed at enhancing connectivity between the Northeast and Southeast Asia. In this regard India built the 165-km long Indo-Myanmar Friendship Road connecting Tamu and Kalaymyo-Kalewa, which was inaugurated by the then External Affairs Minister Jaswant Singh on February 13, 2001.The other important ongoing and potential infrastructure projects are India-Myanmar- Thailand Trilateral Highway, Trans Asian Highway, India-Myanmar rail linkages,Kaladan Multimodal project, the Stilwell road, Myanmar-India-Bangladesh gas and/or oil pipeline and Tamanthi Hydroelectricity project. The optical fiber network between

Northeast India and Southeast Asia has been operationalised in 2009. India and Myanmar also recently agreed on the Kaladan Multi-Nodal Transit Transport Facility, which envisages connectivity between Indian ports on the eastern seaboard and Sittwe Port in Myanmar and then through riverine transport and by road to Mizoram, thereby providing an alternate route for transport of goods to Northeast India. Efforts are also underway to improve infrastructure, particularly road links, at the second India-Myanmar border trade point at Rih-Zowkhathar in Mizoram sector by upgradation of the Rih-Tidim and Rih-Falam road segments in Myanmar. Apart from developing road links, efforts are underway to have a rail link from Jiribam in Manipur to Hanoi in Vietnam passing through Myanmar.

The then Indian Prime Minister Atal Bihari Vajpayee proposed holding of an India-ASEAN car rally at the ASEAN-India summit in Bali 2003 to draw dramatic attention to India’s geographical proximity with ASEAN countries. The ASEAN-India car rally became a reality in November 22, 2004, which was flagged off in Guwahati. In his speech Prime Minister Manmohan Singh referred to India’s Northeast as a gateway to ‘Asian Century’. The ASEAN-India Car Rally clearly reflects the existence of land route connectivity that could facilitate free flow of trade, investment and tourism between ASEAN and India. It could initially involve Cambodia, Laos, Myanmar, Viet Nam and Thailand, and the Northeastern region. This form of sub-regional cooperation could serve as building blocs for greater economic interaction and integration between ASEAN and India.15 Through these efforts; the government of India is showing its keenness in developing the Northeast.

The Indo-Myanmar border is inhabited by a host of ethnic communities, the Singphos, Kukis, Nagas, Mizos, etc., who were separated by the division of British India and the then Burma in 1937. At that time, the transborder tribes in India and Burma were too illiterate and ignorant to have a conception about their future political destiny. These ethnic communities have more in common with the population living across the boundary than with their own nationals. So long as the national boundaries which separated the different civilizations were relaxed the ethnic communities in the region lived a peaceful coexistence with each other and acted as a buffer against the intrusion of people from the other side.16 The affinity of groups with their kin groups across the border and the sense4 of support (both material and non-material) they derive from them, have had serious implications.17 The Partition of British India in 1947 and subsequent political events brought the cutting and restriction of old routes of mobility in the Northeastern region, as well as major demographic mobility shifts; together these two forces give Northeast India the shape and location we see today. Further, there are popular movements after 1947, which attempts to close off and regulate national borders more rigorously than ever before with a goal to defend national territory against foreign threats and to secure national territory against internal disruption that might be fed by forces across the border.18 All these forces worked against the interests of these transborder tribes. Despite these divisions and restriction of movements, the transborder tribes continue to maintain their age-old ties. According to Karin Dean, these communities have ‘creatively adjusted to the dominating international system of the states’ and despite being citizens of different states they are ‘united through a tight unique kinship lineage network of various spatial trajectories and social bonds, a commonly recognized lingua franca and a variety of tangible ethnic features.’19

The end of Cold War and globalization resulted in the softening of national borders and the resultant proposition for a borderless world, enabling the formation of transnational economic regions. In this backdrop there is hope for the transborder communities in Northeast India and Myanmar for the re-establishment of the age-old relations between their own communities and a brighter prospect for development. The Look East policy must provide a space for such proposition.


Though India’s trade with countries bordering the Northeast has seen the most dramatic expansion, this expansion has had little or no impact on Northeast economy as most of this trade expansion is through seaports. In spite of huge potential, the Indo-Myanmar trade remained insignificant, amounting to few crores per year. The traded items between India and Myanmar are mostly third country products and there is no concerted effort on the part of the government to develop the border regions and expand the tradable items.

Following their research on India, Goldman Sachs and Co. economists Jim O’Neill and Tushar Poddar have come up with a report on ‘Ten Things for India to

Achieve its 2050 Potential.’20 Some of the findings like improve governance, increase trade with neighbors, increase agricultural productivity and improve infrastructure are very much needed in this region. In order to reap the benefits of this policy and from FTAs with the economies of the east, the key variables are transit arrangements, proliferation of trade routes and custom check post, easy visa regime making it possible for traders, businesspersons and transport operators to move in and out of the region.21 Therefore, it requires massive investments in infrastructure: construction of roads, railways, air transport and communication facilities, which are largely absent. Hotels, restaurants and resorts needs to be built for tourists. The Shukla Commission on ‘Transforming the Northeast’, estimated that such investment would exceed Rs. 25,000 crores.22 As envisaged in North Eastern India Vision 2020, a substantial increase in investments as well as a significant improvement in productivity is required for the Northeastern region to catch up with the rest of the country by 2020. This huge investment cannot come from the government alone. As a result, private investment and loans from Asian Development Bank and World Bank is needed. However, the present political and security environment cannot attract private investors. The government needs to create a secure environment by initiating dialogue with radical elements to bring peace and stability in this conflict-ridden region.5

Industries in the northeastern region need to develop goods, which can be exported to the neighboring countries. Processing industries have to be set up to manufacture quality goods, which can be offered in international markets at acceptable prices. Agriculture has to be improved both in terms of production and in terms of productivity. The new North East Industrial Policy 2007 has practically made the whole region a special economic zone. The industry departments of various states of the region have only benefited the ‘subsidy eaters’ till now.23 Otherwise; the region would just be a corridor between mainland India and Southeast Asia.

India’s policy of strengthening its ties with eastern neighbors has been limited to counter insurgency efforts as seen in Bhutan and Myanmar.24 The Look East policy is used as a means to convince the neighboring countries to drive out insurgents taking shelter in these countries. Sincere and political negotiations and not militaristic approach to insurgency will bear lasting solution. However, such negotiations should also involve, as Samir Kumar Das points out, civil society and all the contending parties as one negotiation may antagonize the other group/groups.25

The role of Northeastern states in the Look East policy is negligible till date. So far, it seems to be a dictated policy of the central government. This is in sharp contrast to the role played by Yunnan province of China in search of closer relationship with its Southeast Asian neighbors. The Yunnan province plays a role in the institutions of the Greater Mekong sub-region. However, there is little room for India’s Northeastern states in the Mekong Ganga Cooperation or in BIMSTEC. It is through concentrated efforts in various thrust areas that Northeast India will be able to stand not only the challenges of the Look East policy but also to fully participate in the new milieu. Only then, Northeast can hope to be a part of the bridge connecting India and Southeast Asia.26 Giving the Northeastern states a direct role in this policy by taking advantage of the region’s history and shared cultural ties with East and Southeast Asia can ensure a successful Look East policy.


The Look East policy is expected to usher in a new era of development for the Northeast through network of pipelines, road, rail and air connectivity, communication and trade. However, several hurdles need to be overcome of which the region is embroiled for the past several decades before any meaningful activity can take place. Starting from various forms of insurgent activities to the problem of illegal migration and drug trafficking, which are all transnational in character, the Government of India need to forge cooperation from the neighboring countries. Such cooperation with the neighboring countries should not antagonize the people of this region. The transborder communities can be restored through border trade and inter-country trade which the border region should not act merely as a transit corridor but as a source of local manufacture and enhancing people-to-people contact. The emphasis should be on industrialization and growth. The Indian government and the northeastern states must adopt proactive role and provide not only infrastructures but also political stability and good governance. Greater participation of the local people in production and distribution activities and raising agricultural productivity should be given prime importance. Trade alone will not be sufficient to transform the region into a sustained development path. In addition, growth in trading activities will only benefit those people who possibly are from outside the region and who are economically more powerful to exploit the resources of the region.

India’s Look East policy should include goals such as encouraging public debate and participation as well as opening doors and windows in the political and economic 6 arena. In this regard the creation of Public Diplomacy Division of the Ministry of External Affairs and the opening of its branch office in Guwahati is a welcome move which would assist in redressing the aspirations of the people of this region in having better liaison with the External Affairs Ministry on issues concerning foreign trade, foreign direct investment and cultural exchanges. Thus, the success of the policy depends on the commitment of the government to implement the policy and to give role for the Northeastern states in this policy.


Notes and References

1Prime Minister Manmohan Singh’s keynote address at special leaders dialogue of ASEAN Business Advisory Council, December 12, 2005, Kuala Lumpur.

2Sandy Gordon. India’s Rise to Power in the Twentieth Century and Beyond. New York: St.Martin’s Press, 1995, p. 299.

3Press statement by Pranab Mukherjee, Minister of External Affairs after the Meeting on Look East policy, 31-10-2007.

4Sinha, Yashwant, ‘Resurgent India in Asia’, Speech at Harvard University on 29 September 2003, http//

5Address of the External Affairs Minister, Pranab Mukherjee, at the Institute of Foreign Affairs and National Security, Republic of Korea on ‘India’s Look East Policy’ 17/09/2007

6Declaration on the Establishment of BIST-EC, Bangkok 6 June 1997.

7Dong Zhang, ‘India Looks East: Strategies and Impact’, AUSAID Working Paper, September 2006, p. 19.

8Address by Mr. Rajiv Sikri, Secretary (East), Ministry of External Affairs, at the Sixth Bangladesh-China- India-Myanmar Forum, New Delhi.

9Sushil Khanna, ‘Economic Opportunities or Continuing Stagnation’ Gateway to the East: a symposium on Northeast India and the Look East Policy, Seminar, June 2005.

10Sanjib Baruah, ‘The Problem’, Gateway to the East: a symposium on Northeast India and the look east policy, Seminar, June 2005.

11Rajiv Sikri’s lecture ‘˜Northeast India and India’s Look East Policy’, in CENISEAS Forum ‘˜Towards a New Asia: Transnationalism and Northeast India.’

12’Year End Review 2004’, Ministry of External Affairs, Government of India. New Delhi.

13M. P. Bezbaruah, ‘Indo-Myanmar Border Trade: The Stakes for North East India’, Dialogue July- September 2007, Volume 9 No. 1.

14M.S. Prabhakara, ‘Is Northeast India Landlocked?’ Economic and Political Weekly, 16 October 2004.

15Secretary-General of ASEAN address in the Conference on ‘North East – India’s Gateway to ASEAN’ 22 November 2004, IIT Guwahati.

16T. Nongbri, ‘Ethnicity and Political Activism in North East: Tribal Identity and the State policy’, in P.S. Datta (ed.). The North-East and the Indian State: Paradoxes of a Periphery. New Delhi: Vikas, 1995, p. 53.

17Sreeradha Datta, ‘Security of India’s Northeast: External Linkage’, Strategic Analysis, Vol. XXIV, No.8, November 2000.

18David Ludden. Where is Assam? Using Geographical History to Locate Current Social Realities.CENISEAS Papers 1, OKDISCD, Guwahati, 2003. p. 12.

19Karin Dean, ‘Territories yet unaccounted’, Seminar, #550, June 2005.

20Jim O’Neill and Tushar Poddar, ‘Ten Things for India to Achieve its 2050 Potential’, Global Economics Paper No. 169, Goldman Sachs, 16 June 2008.

21Sushil Khanna, op. cit.

22Shukla Commission Report on Transforming the Northeast-High Level Commission Report to the Prime Minister, March 7, 1997.

23B.B. Kumar, ‘India Looking East’, Dialogue, Jul-Sept. 2007, Vol. 9, No. 1.

24Sushil Khanna, ‘Look East, Look South: Backward Border Regions in India and China’,

25Samir Kumar Das, ‘Conflict and Peace in India’s Northeast: The Role of Civil Society: Policy Studies 42

26H. N. Das, ‘Preparing North-East for Look East Policy’ Dialogue, Jul-Sept. 2007, Vol. 9, No. 1.


*The paper is written by Thongkholal Haokip

*The Paper was presented at the North East India Council of Social Science Research’s national seminar on India’s Look East Policy and North East India: Achievements and Constraints, Shillong, 26-27th March 2010

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