India’s Act East Policy at a Crossroads as Geopolitical Shifts and Domestic Priorities Clash - Herald Express

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NEW DELHI — India’s flagship Act East Policy, a decade-old initiative to deepen economic and strategic ties with Southeast Asia, is facing its most significant test yet as geopolitical rivalries, regional instability, and shifting domestic priorities reshape its implementation. While security cooperation with ASEAN nations and the Quad has expanded, key infrastructure projects remain stalled, trade engagement has weakened, and India’s cautious approach to regional economic integration has left it struggling to match China’s growing influence in the Indo-Pacific.

Launched in 2014 as an upgrade to the 1990s Look East Policy, Act East was designed to transform India’s northeastern states into a gateway to Southeast Asia through enhanced connectivity, trade, and security partnerships. However, delays in critical infrastructure projects, India’s withdrawal from the Regional Comprehensive Economic Partnership (RCEP), and Myanmar’s ongoing civil conflict have exposed structural weaknesses in the policy’s execution. Meanwhile, China’s Belt and Road Initiative (BRI) and deepening economic ties with ASEAN nations have intensified competition for regional influence, forcing India to recalibrate its approach.

What Happened: Key Developments Undermining Act East’s Momentum

# 1. Infrastructure Projects Face Chronic Delays

Two of Act East’s most ambitious connectivity projects—the India-Myanmar-Thailand Trilateral Highway and the Kaladan Multi-Modal Transit Transport Project—remain far behind schedule, undermining the policy’s core objective of linking India’s northeastern region to Southeast Asia.

– Trilateral Highway: Intended to stretch 1,360 km from Moreh in Manipur to Mae Sot in Thailand via Myanmar, the project has missed multiple deadlines due to land acquisition disputes, funding gaps, and Myanmar’s internal instability. While India and Thailand have completed their sections, progress in Myanmar has been glacial, with only 16 of 71 required bridges built as of early 2026. A Ministry of External Affairs (MEA) official, speaking on condition of anonymity, confirmed that “geopolitical sensitivities” in Myanmar—where the military junta faces armed resistance—have made coordination difficult, though India remains “committed to the project’s completion.”
– Kaladan Project: Designed to connect Kolkata to Mizoram via Myanmar’s Sittwe port, this $484 million initiative has faced repeated setbacks since its 2008 inception. While the Sittwe port was inaugurated in 2016, the inland waterway and road components remain incomplete due to security concerns in Myanmar’s Rakhine State. In 2025, India’s Ministry of Development of North Eastern Region (DoNER) acknowledged that “unforeseen challenges” had pushed the project’s completion date to at least 2027, a decade behind schedule.

# 2. Trade Engagement Weakens After RCEP Withdrawal

India’s 2019 decision to exit RCEP, a 15-nation trade bloc that includes ASEAN, China, Japan, and Australia, has had lasting repercussions for its economic engagement under Act East. While New Delhi has since signed bilateral trade agreements with Australia (2022) and the UAE (2023), analysts argue that its absence from RCEP has diminished its leverage in regional supply chains.

– ASEAN Trade Growth Stalls: India’s trade with ASEAN grew from $71 billion in 2014 to $131 billion in 2022 but has since plateaued, reaching $138 billion in 2025—far below the $200 billion target set by Prime Minister Narendra Modi. Meanwhile, ASEAN’s trade with China surged to $975 billion in 2025, nearly seven times India’s figure.
– Protectionist Policies Limit Engagement: India’s 2020 imposition of import restrictions on electronics, solar panels, and steel—sectors where ASEAN nations are competitive—has further strained economic ties. A 2025 report by the Confederation of Indian Industry (CII) warned that India’s “selective engagement” with regional trade risked isolating it from Asia’s economic integration.

# 3. Security Cooperation Advances, But China’s Influence Looms Large

While Act East has made progress on the security front—through joint naval exercises (Milan), counterterrorism cooperation, and the Quad’s maritime security initiatives—China’s expanding footprint in the Indo-Pacific has complicated India’s strategic calculus.

– Quad Gains Traction: The 2024 Quad Leaders’ Summit in New Delhi saw the launch of the Indo-Pacific Maritime Domain Awareness (IPMDA) initiative, a satellite-based surveillance network to counter illegal fishing and maritime threats. India has also deepened defense ties with Vietnam, the Philippines, and Indonesia, supplying BrahMos missiles and patrol vessels.
– China’s BRI Dominates Southeast Asia: Despite India’s efforts, China remains the dominant economic partner for most ASEAN nations. A 2026 study by the Lowy Institute found that China accounted for 42% of ASEAN’s infrastructure financing in 2025, compared to India’s 3%. Projects like the China-Laos Railway and Jakarta-Bandung High-Speed Railway have strengthened Beijing’s influence, while India’s connectivity initiatives struggle to gain traction.

# 4. Domestic Priorities Shift Focus Inward

India’s Make in India and Atmanirbhar Bharat (Self-Reliant India) campaigns have led to a more cautious approach to regional trade, with the government prioritizing domestic manufacturing over economic integration.

– Pharmaceuticals and IT as Bright Spots: India’s $25 billion pharmaceutical exports to ASEAN and $15 billion IT services trade remain strong, but broader industrial collaboration has lagged. A 2025 NITI Aayog report noted that India’s “defensive trade posture” had limited its ability to capitalize on ASEAN’s manufacturing supply chains.
– Northeast Development Lags: Despite Act East’s focus on India’s northeastern states, infrastructure and industrial growth in the region remain slow. A 2026 parliamentary committee report found that only 38% of sanctioned projects in the Northeast had been completed, citing bureaucratic delays and funding shortfalls.

Why It Matters: The Stakes for India’s Regional Ambitions

India’s Act East Policy was never just about economic integration—it was a strategic bet to counterbalance China’s influence in Asia. However, the policy’s current struggles have three major implications:

1. Geopolitical Vulnerability: If India fails to deliver on its connectivity and trade commitments, ASEAN nations may increasingly view it as a secondary partner to China, undermining its Indo-Pacific strategy.
2. Economic Costs: India’s absence from RCEP and slow progress on infrastructure projects risk locking it out of Asia’s supply chains, where China and Vietnam are already dominant.
3. Strategic Autonomy at Risk: While India’s cautious trade policies aim to protect domestic industries, they may weaken its diplomatic leverage in Southeast Asia, where economic engagement is often a precursor to security cooperation.

Background and Context: How Act East Evolved

# From Look East to Act East

India’s engagement with Southeast Asia began in the early 1990s with the Look East Policy, launched by then-Prime Minister P.V. Narasimha Rao in response to the collapse of the Soviet Union and India’s economic liberalization. The policy focused on trade, cultural ties, and limited security cooperation with ASEAN.

In 2014, Prime Minister Narendra Modi rebranded it as Act East, expanding its scope to include:
– Infrastructure connectivity (highways, ports, digital links)
– Security cooperation (counterterrorism, maritime domain awareness)
– Economic integration (trade agreements, supply chain diversification)
– Cultural diplomacy (Buddhist circuit tourism, people-to-people ties)

# Key Milestones and Setbacks

Competing Claims and Uncertainty: What Analysts Disagree On

# 1. Is India’s Protectionism Justified?

– Government’s View: Officials argue that India’s cautious trade policies are necessary to protect domestic industries from unfair competition, particularly in agriculture and manufacturing. A 2025 MEA white paper stated that “India’s trade agreements must align with its development priorities.”
– Critics’ View: Economists like Dr. Arvind Subramanian (former Chief Economic Advisor) argue that India’s RCEP withdrawal was a strategic blunder, as it ceded ground to China in ASEAN markets. A 2026 Peterson Institute study estimated that India’s GDP could have been 1.5% higher by 2030 if it had joined RCEP.

# 2. Can India Compete with China in Southeast Asia?

– Optimists’ View: Some analysts, including Dr. C. Raja Mohan (Asia Society Policy Institute), believe India can leverage niche strengths—such as digital services, pharmaceuticals, and defense exports—to carve out a role in ASEAN. The 2025 India-Vietnam defense deal, which includes BrahMos missile sales, is cited as a model.
– Skeptics’ View: Others, like Dr. Rajiv Bhatia (Gateway House), warn that India’s slow infrastructure development and trade barriers make it difficult to match China’s economic clout. A 2026 Brookings Institution report noted that “India’s connectivity projects lack the scale and speed of China’s BRI.”

# 3. Is Myanmar’s Instability a Dealbreaker?

– Government’s Stance: Indian officials maintain that engagement with Myanmar’s junta is necessary to protect strategic interests, including the Kaladan and Trilateral Highway projects. A 2025 MEA statement argued that “India cannot abandon its northeastern connectivity projects due to Myanmar’s internal issues.”
– Human Rights Advocates’ View: Critics, including Amnesty International, argue that India’s continued engagement with Myanmar’s military regime undermines its democratic values. A 2026 UN report accused India of “prioritizing geopolitics over human rights” in its Myanmar policy.

What to Watch Next: Key Developments That Could Reshape Act East

1. Myanmar’s Civil War: If the conflict intensifies, India may face pressure to abandon connectivity projects or seek alternative routes through Bangladesh.
2. ASEAN-India Trade Negotiations:

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