February , 2020
Where India stands in the Eastern Union
16:14 pm

Kuntala Sarkar

The Eastern Union region is being conceptualised as the future alliance of Indo-Pacific nations that will bring integrity to the region. The Indo-Pacific region is strategically significant as 60% of the global maritime trade is done through this region. The idea of the Eastern Union is to create the largest economic bloc with multi-lateral trade relations.

The Centre for East and North East Regional Studies, Kolkata (CENERS-K) and The Bengal Chamber of Commerce and Industry (BCC&I) recently organised the ‘Economic Summit 2020’ on ‘A brave new world - The Eastern Union’ where the concept of the Eastern Union was viewed through the prism of economic potentialities.

India’s relation with major countries in the region

India has put in much effort to develop trade relations with three major countries of Indo-Pacific region, namely, Japan, Russia and China in 2019. Bilateral trade of India with Japan amounted to $17.63 billion in FY 2019. A survey of Japanese manufacturing companies that was conducted by the Japan Bank for International Cooperation (JBIC) informs that India has been one of the most attractive investment destinations in recent years. India and Russia has also focused on advanced technology areas with an aim to escalate bilateral trade to $30 billion by 2025. New Delhi has also succeeded to lower the trade deficit down with Beijing by $10 billion as compared to the previous fiscal. The trade increased to around $53 billion in 2019. However, India’s unwillingness to join the Regional Comprehensive Economic Partnership (RCEP) remains a bone of contention.


The South-East Asia, East Asia and Asia-Oceania region covering 16 countries are witnessing the formation of the RCEP – the world’s largest regional trading group – under the leadership of China. This region accounts for 47.4% of the global population and 29.1% of total global trade. After India refused to join this partnership to encourage the country’s domestic production and trade, the existing partners have requested India to rethink. Many of the important stakeholders in RCEP feel that if India joins, it will strengthen both India and the region economically.

Aniruddha Lahiri, Vice President CENERS-K and Former President, BCCI, present in the economic meet said, “To bring in security and stability, the proposed Eastern Union needs to be more than an international development conglomerate or an economic partnership. Multi-lateral engagements in the region are of critical importance to maintain stability. Have domestic industries in Asian countries developed to a level that partnerships like RCEP would not result in a flooding of imported goods in the markets?” 

Lt. General J. R. Mukherjee, PVSM, AVSM, VM (Retd.), said, “Joining RCEP is a must for India. Indian companies are afraid of international challenges and competition. India needs to improve its relations with China in order to enhance trade through the north eastern region.”

Sanjaya Baru, writer and policy analyst said at the meet, “We are still not enjoying a level playing field. No industrial nation in the world has grown without 80% literacy. There has to be investment in education and toward creating a skilled work force.”

Indian Ocean as a bridge factor

The Indian Ocean plays a major role in India’s policy shift from ‘Look East’ to ‘Act East’. The focus of ‘Look East’ was to increase economic incorporation with the South East Asian countries. The focus of ‘Act East’ is on economic and security integration in South East and East Asian countries. The Indian Ocean is largely aligned with both trading and security issues for these countries; many of them share their coastlines with the Indian Ocean.

The ‘Look East’ policy, using India’s access to the Indian Ocean has been a great success. 95% of India’s trade by volume and 68% of its trade by value comes through the Indian Ocean. Additionally, about 80% of India’s oil and 45% of its liquefied natural gas is imported by sea through the Indian Ocean. Taking into account India’s offshore oil production and petroleum trading, India’s sea dependence for oil is about 93%.

Dhruva Jaishankar in his paper ‘Acting East: India in the Indo-Pacific (2019)’ mentioned that India’s Act East policy is based on preserving a balance of power along with security measures in the Indo-Pacific region. The paper states, “From ‘Look East’ to ‘Act East’, the policies are majorly dependent on four pillars namely, securing the Indian Ocean, integrating with South East Asia, managing relations with China and future policy priorities. The priority for future policy will be given on accelerating naval acquisitions, facilitating regional trade, enhancing overseas project implementation, boosting defense exports, improving air connectivity and attracting scrutinised investments.”

India might have certain domestic obligations to sidestep the China-led RCEP but it must look to enhanced trade and economic relations with the countries of the Eastern Union region in order to emerge as a formidable regional and global economy.


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