India’s East Asian push mutually beneficial

India has seen a strong standalone performance in its growth in the recent past as compared to the other BRICS economies. This is partly due to the external environment and partly to the push for the right set of policies post the Modi government coming to power in May 2014.

The external environment includes the low commodity prices (due to falling Chinese demand), particularly of crude oil, of which India has been a major importer. On the internal policy front, several schemes and reforms have been initiated and results of some of them are beginning to show – most notably in the power and coal and roadways development sector.

Modi has tried to pursue on India's external front what many observers regard as 'economic diplomacy'. It includes, among other things, drawing investments for economic growth. In the process, what is required is improving trade ties and deepening economic relationship with other economies.

Also required is wooing investors and the diaspora, which are a major source of FDI flows and remittance flows to the Indian economy. However, all of this will function in the long-term only when there is trust and a continual push for reforms (either legislative or through directives) by the government and implementation on the ground.

A recent Peterson Institute for International Economics (PIIE) briefing report by C Fred Bergsten rightly points to India's improved chances for trade-led growth, particularly by focusing on benefiting from the emerging international architecture on trade-led growth and economic development.

It is because several countries' experience in the past especially Japan, South Korea, Singapore (from 1960's onwards) and most recently China post 1980s indicates that economic growth is possible by being in the global value chains of goods and services.

Modi's visits to Malaysia and Singapore must be seen against this backdrop of the need for India to engage more openly with the world but at the same time keeping its strategic and national interests in mind.

From India's point of view, another reason to 'Act East' now is that these economies share close cultural and historical links with us, apart from having a long experience of trade-led development and economic growth.

These countries can and are willing to help India in leveraging their expertise on smart urbanisation and economic development. These are steps in the right direction for India to take learning and experience of societies that have been successful in addressing crucial problems of their times and fostering peace and prosperity.

Also, India needs to play a proactive role within the South Asian region. India's push in the ASEAN and APEC must certainly increase, but what must also increase are the benefits that trade brings within the South Asian region.

By cooperation and sharing of experience and resources at the international level, India along with the other countries in Southeast Asia, Central Asia, Russia, China and Japan can certainly hope to make the coming century as a truly Asian one.