Thai firms urged to invest in India

Thai firms urged to invest in India

Eight northern states ripe for the picking

Indian Prime Minister Narendra Modi's 'Act East' policy is a revamp of the decades-old 'Look East' strategy of former governments, designed to strengthen economic and strategic relations in Southeast Asia. File photo shows Mr Modi opening last month's IISS Shangri-La dialogue in Singapore. (Handout via AFP)
Indian Prime Minister Narendra Modi's 'Act East' policy is a revamp of the decades-old 'Look East' strategy of former governments, designed to strengthen economic and strategic relations in Southeast Asia. File photo shows Mr Modi opening last month's IISS Shangri-La dialogue in Singapore. (Handout via AFP)

NEW DELHI: Thai businessmen are being encouraged to "Act West", and become the first investors in eight northern states of India which are set to receive a share of 6.2 trillion baht as part of a project to boost India's economic connectivity with the Southeast Asian region.

This proposal was made by Thai ambassadors at the 10th Delhi Dialogue Summit held in New Delhi during 19-20 July in which Indian deputy foreign minister VK Singh reiterated his government's "Act East" initiative which aims to strengthen economic ties with the 10 members of Asean.

The high-level summit was attended by regional foreign dignitaries and business luminaries including Thai billionaire and CP chairman Dhanin Chearavanont.

Act East is touted as New Delhi's attempt to reckon with the predominance of China and its ambitious Belt and Road Initiative which intends to link the world's second-largest economy with Southeast Asia, Africa and Eurasia by developing land and maritime infrastructure.

In China's Belt and Road Initiative, Beijing picked Bangladesh as the location for aspects of the project -- which was perceived as a deliberate attempt to bypass India.

Act East is part of the apparatus that India, which is expected to be the world's third-largest economy by 2030, is employing to make its own economic mark on the region.

Under Act East, the government of India is set to spend 6.2 trillion baht on developing maritime infrastructure and economic and industrial zones over the next 10 years.

Mr Singh told attendees of the summit that he believes the country will reap the benefits when infrastructure projects such as investment in 27 key industries as well as transport infrastructure bear fruit.

Under Act East, the Indian government is implementing two major projects to promote economic connectivity. One is "Sagarmala", a project to boost maritime connectivity by developing seaports and another is a new regional economic zone in the eight states of the northeast.

Mr Modi announced Sagarmala in 2015 as an initiative to develop ports along 14,500 kilometres of coastline to reduce transportation costs and facilitate shipping.

The term "Sagarmala" also matches the concept as, in the Hindi language, "sagar" means ocean and "mala" refers to strings of beads, thus fostering the image of a network of links across the sea.

The other initiative a is a special economic zone in eight states of the northeast, bordering Bangladesh, Bhutan, Nepal and Myanmar.

The region is a political stronghold of Indian Prime Minister Narendra Modi, who has long been active in forging ties with Asean. Mr Modi also believes the Indian Ocean will become a major key to "bridging" the Indian and Asean economies.

"Thai businessmen should be among the first pioneers there," Pradap Pibulsonggram, adviser to the Thai Department of Asean Affairs said, adding that the Act East policy is a great opportunity for Thailand too.

"It's too late if we get in when it is already booming."

The region is known for its rich resources and high potential in farming and tourism, added Piti Srisangnam, who is an expert in East Asian studies at Chulalongkorn University.

"We should be first in to enjoy first-mover advantage, in a market that caters to a population of over 1.4 billion people," said Mr Piti.

The state of Assam would be a good choice for Thai businessmen to seek opportunities in, he said, due to the area's shared historical Buddhist roots.

In fact, Thai and Assam business leaders have already met several times during special trips organised by the Thai Commerce Ministry.

Thai Prime Minister Prayut Chan-o-cha announced in 2016 his government would adopt an "Act West" policy to tighten economic cooperation with India.

Mr Pradap said the northeastern Indian region "is not just a gateway for Asean, but also the Indian hub for contacting its Asean counterparts", Mr Pradap said.

In terms of geopolitics, Mr Pradap said Act East will provide necessary competition to the larger-scale Belt and Road initiative. With the ongoing territorial disputes over the Spratly Islands in the South China Sea between China and some Asean members, other trade linkages should not be ignored, he believes.

"This is not a move to block China," Mr Pradap said. But more engagement with new economic opportunities is needed, "otherwise only China will take centre stage," he said.

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