Can India’s ‘Look East’ Policy Serve as a Catalyst for the Development of a Common Asian Market, and How Does This Aspiration Compare with the Evolution of the European Common Market?
Introduction
India’s ‘Look East’ Policy—launched in the early 1990s in response to the post-Cold War realignment and economic liberalization—has gradually evolved into the ‘Act East’ Policy. The primary objective of this policy framework is to integrate India more deeply with East and Southeast Asia, promoting economic engagement, connectivity, and strategic cooperation with the ASEAN region and beyond. This raises a pertinent question: Can this growing regional integration, under India’s leadership, serve as a catalyst for the development of a common Asian market? And how does this vision compare with the institutional and normative evolution of the European Common Market, which eventually became the European Union (EU)?
This essay critically examines the prospects and constraints of India’s regional outreach as a catalyst for Asian economic integration. It offers a comparative assessment of Asia’s integrative trajectories vis-à-vis the European experience and argues that while India’s policy offers significant potential for regional economic synergy, the absence of institutional convergence, political will, and normative cohesion poses serious obstacles to realizing a common Asian market in the image of Europe.
I. India’s Look East Policy and Aspirations for Regional Economic Integration
1.1 Strategic Economic Rationale
The ‘Look East’ Policy was driven by India’s recognition of East and Southeast Asia as dynamic growth hubs:
- ASEAN is India’s fourth-largest trading partner, with trade exceeding $100 billion in 2022–23.
- India is party to the ASEAN–India Free Trade Agreement (AIFTA) in goods and services, and has signed multiple bilateral Comprehensive Economic Cooperation Agreements (CECA) with countries such as Singapore, Malaysia, and Thailand.
- India promotes connectivity initiatives such as the India–Myanmar–Thailand Trilateral Highway and the Kaladan Multimodal Project, aiming to link its northeastern states with ASEAN supply chains.
India’s engagement thus represents a multifaceted economic pivot, aimed at integrating with East Asia’s industrial and trade networks.
1.2 Catalytic Role in a Fragmented Regional Landscape
India seeks to position itself as a bridging power within Asia’s fragmented economic geography:
- Through forums like ASEAN-led RCEP negotiations (which India exited in 2019), BIMSTEC, and East Asia Summit, India engages in economic and trade diplomacy that links South, Southeast, and East Asia.
- The ‘Act East’ policy expands India’s vision beyond ASEAN to encompass Indo-Pacific economic engagement, suggesting a broader integrative ambition.
However, India’s non-membership in key mega-regional pacts, especially RCEP, and its protectionist impulses, undermine its ability to lead or catalyze a unified Asian market.
II. European Common Market: A Benchmark of Economic Integration
2.1 Institutional and Legal Evolution
The European Common Market, established by the Treaty of Rome (1957), was built upon explicit institutional commitments:
- Creation of four economic freedoms—movement of goods, services, capital, and people.
- Supranational institutions like the European Commission, European Parliament, and Court of Justice, endowed with enforcement and regulatory powers.
- The later evolution into the European Union (EU) and the Economic and Monetary Union (EMU) introduced a single currency, harmonized policies, and deep fiscal integration.
This model was premised on normative convergence, political commitment to shared sovereignty, and the trauma of historical conflict that necessitated binding integration.
2.2 Normative Cohesion and Functional Spillover
The European Common Market succeeded due to the spillover effect—economic integration generated pressures for political coordination, legal harmonization, and security collaboration. This was sustained by:
- Democratic political systems, which facilitated compromise and rule adherence.
- Historical reconciliation (e.g., Franco-German rapprochement), which reduced security dilemmas.
- A sense of pan-European identity, fostered through institutions and education.
In contrast, Asia lacks such normative and political cohesion, making emulation of the European model a conceptual stretch.
III. Structural and Normative Challenges in Building a Common Asian Market
3.1 Political Fragmentation and Sovereignty Sensitivities
Asia is marked by a multiplicity of political systems—democracies, authoritarian regimes, and military juntas:
- Strategic rivalries (e.g., India–China, China–Japan, North–South Korea) impede regional trust and cooperation.
- Territorial disputes and nationalistic foreign policies hinder long-term binding economic agreements.
- Unlike the EU, there is no supranational institutional mechanism capable of enforcing economic rules or resolving inter-state disputes.
India, while advocating for open regionalism, remains reluctant to concede economic sovereignty, as evidenced by its exit from RCEP over fears of trade imbalances, particularly with China.
3.2 Uneven Development and Trade Asymmetries
The Asian region is highly asymmetrical in terms of development levels, institutional capacity, and market openness:
- India and several ASEAN members remain low- to middle-income economies; in contrast, countries like Japan, South Korea, and Singapore are high-income industrial states.
- Non-tariff barriers, logistical bottlenecks, and weak digital infrastructure in many South Asian and Southeast Asian states hinder seamless economic integration.
- There is no shared currency, nor is there a framework for fiscal transfers or regional investment equalization akin to the EU’s Cohesion Policy.
Without mechanisms to offset asymmetries, a common market in Asia would risk deepening economic dependence on dominant powers, especially China.
3.3 Absence of Regional Identity and Social Integration
Asia lacks a shared regional consciousness or civic identity that can support market integration:
- Unlike Europe, which invoked a post-war community of values, Asia remains civilizationally diverse and ideologically divided.
- Migration flows are limited, and visa liberalization across Asia is minimal.
- Language, legal systems, and historical animosities further impede normative integration.
In this context, India’s leadership in forging a common Asian market would require not just trade diplomacy but also norm entrepreneurship, which it has yet to fully articulate.
IV. Prospects for India-Led Economic Regionalism: A Realist Recalibration
4.1 Functional Regionalism over Institutional Union
Instead of emulating the European Common Market, India may pursue functional economic regionalism focused on:
- Sectoral integration (e.g., pharmaceuticals, digital trade, clean energy).
- Multimodal connectivity linking India’s Northeast to Southeast Asia.
- Investment facilitation platforms, especially in the BIMSTEC and Bay of Bengal economic corridor frameworks.
This would reflect an Asian model of regionalism—pragmatic, flexible, and sovereignty-sensitive.
4.2 Building Coalitions within Minilateral Platforms
India could spearhead issue-specific coalitions within QUAD, IPEF, and Indo-Pacific Economic Frameworks to:
- Harmonize standards in digital trade, cybersecurity, and sustainable development.
- Promote infrastructure standards, financing norms, and capacity building among emerging economies.
Such engagements offer India a platform to shape the norms of regional integration without the rigidity of treaty-based commitments.
Conclusion
India’s ‘Look East’ (and subsequently ‘Act East’) policy embodies a strategically significant and economically logical initiative to deepen integration with Southeast and East Asia. However, serving as a catalyst for a common Asian market on the model of the European Common Market would require normative convergence, institutional design, and political commitment far beyond current capacities and preferences of Asian states.
Rather than replicate the European model, India’s best prospect lies in leading a pragmatic, flexible, and plurilateral integration framework, grounded in functional cooperation, economic complementarity, and soft-norm construction. In this realist recalibration, India can still shape the contours of Asian economic regionalism—not through supranational architecture, but by building connectivity, trust, and sectoral interdependence suited to Asia’s political mosaic.
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