Recalibrating India’s Act East Outlook | 10 Feb 2026

India’s engagement with Southeast Asia is no longer about diplomatic symbolism, but about strategic delivery. The Indian Prime Minister’s Malaysia visit marks a decisive shift from Act East to Grow East, anchoring ties in semiconductors, digital payments, and maritime security. By blending economic resilience, financial sovereignty, and Indo-Pacific stability, the partnership reflects India’s emergence as a credible regional rule-shaper. It also signals India’s intent to embed itself across the wider Eastern strategic ecosystem through supply-chain resilience, critical technologies, and security partnerships. 

How India’s Act East Policy Evolved over Time? 

• Phase I (1991–2000)- “Looking East”: India’s eastward engagement began as the Look East Policy under P V Narasimha Rao, driven by post-1991 economic liberalisation and the need to integrate with ASEAN-led growth networks.  
  • The focus was trade, investment, and market access, not security. 
  • India became a Sectoral Dialogue Partner of ASEAN in 1992 and a Full Dialogue Partner in 1996. 
• Phase II (2001–2013)- Institutionalisation through Trade, Dialogue, and FTAs:  The policy matured through institutional mechanisms like ASEAN–India FTA, embedding India into regional value chains while remaining largely non-strategic in orientation. 
• Phase III (2014–Present): Shift from “Look” to “Act”: In 2014, the policy was upgraded to "Act East". This marked a transition from "passive observation" to "active participation. 
  • As the policy matured, its scope widened beyond ASEAN. India’s deepening strategic ties with Japan, South Korea, and Australia have been equally important in shaping its Indo-Pacific strategy.  
  • 4 C's of India's Act East Policy are Culture, Connectivity, Commerce, and Capacity Building. 
  • The Indian Prime Minister officially designated 2026 as the ASEAN-India Year of Maritime Cooperation. 
    • Following the PM's visit to Malaysia in February 2026, both countries have fast-tracked the use of Rupee and Ringgit for bilateral trade to reduce dependency on the Dollar.

What Measures has India Undertaken to Operationalise the Act East Policy?   

• Strategic "Connectivity Architecture" to Bypass Choke Points: India is aggressively operationalizing "Multi-modal Economic Corridors" to bypass the Siliguri bottleneck, transforming the North East into a "strategic gateway" for seamless ASEAN integration and logistical dominance.  
  • This shifts the focus from mere land connectivity to a "continental-maritime mix," reducing dependence on the volatile "Chicken's Neck" corridor. 
  • The operationalization of the Sittwe Port (May 2023) in Myanmar and the expedited push to extend the India-Myanmar-Thailand (IMT) Highway to Vietnam demonstrate this pivotal shift. 
• Institutionalizing "Combat Diplomacy" & Defense Exports: Transitioning from a passive "Look East" stance to a "Net Security Provider" role, India is supplying lethal hardware and conducting complex maritime maneuvers to counter hegemonic assertiveness in the South China Sea.  
  • This strategy creates a "deterrence arc" by empowering friendly nations with kinetic capabilities rather than just diplomatic support.  
  • The delivery of the $375 million BrahMos missile batteries to the Philippines (April 2024) and the gifting of the active warship INS Kirpan to Vietnam (June 2023) solidify this strategic pivot. 
• "Digital Public Infrastructure" (DPI) Statecraft: Leveraging "Technological Sovereignty," New Delhi is exporting its fintech stack to create low-cost, sovereign financial rails that bypass western intermediaries and deepen economic interoperability with Southeast Asia.  
  • This "UPI Diplomacy" reduces currency conversion costs and offers a non-SWIFT financial alternative for remittance-heavy economies.  
  • The UPI-PayNow linkage with Singapore (Feb 2023) enables real-time cross-border remittances, with similar Local Currency Settlement talks currently underway with Indonesia and Malaysia. 
• Recalibrating Trade via "AITIGA Modernization": Addressing the "Asymmetric Openness" of past pacts, India has initiated a rigorous modernization of trade agreements to fix inverted duty structures and integrate into "China-Plus-One" resilient supply chains.  
  • The goal is to protect domestic manufacturing while ensuring Indian MSMEs get reciprocal market access in protectionist ASEAN sectors. 
  • The expedited review of the ASEAN-India Trade in Goods Agreement (AITIGA) aims to tackle the widening trade deficit, which reached a staggering US$44 billion in 2023. 
• "Sub-Regional Energy Grids" as Geopolitical Glue: India is constructing a "Hydro-Carbon Web" to bind neighbors through critical energy dependency, ensuring long-term geopolitical leverage and creating a unified South Asian energy market.  
  • This moves the relationship from transactional politics to "infrastructure lock-in," making disengagement economically prohibitive for partner nations.  
  • The commissioning of the India-Bangladesh Friendship Pipeline (March 2023) and the historic pact to import 10,000 MW of power from Nepal over the next decade exemplify this integration. 
• Institutionalizing the "Blue Economy" & Maritime Domain Awareness: India is transitioning from traditional naval patrols to a comprehensive "Ocean Governance" framework, aiming to secure vital Sea Lines of Communication (SLOCs) against non-traditional threats and assertive regional actors.  
  • By establishing 2026 as a dedicated year for maritime cooperation with ASEAN, New Delhi is embedding itself into the regional security architecture through shared surveillance and sustainable resource management.  
  • Also, New Delhi is successfully operationalising the "SAGAR" (Security and Growth for All in the Region) vision by institutionalising naval interoperability, moving from ad-hoc drills to complex war-fighting exercises that signal a unified front against grey-zone coercion. 
• "Critical Mineral Cooperation" for Green Energy Security: Recognizing the vulnerability of concentrated supply chains, India is forging "Resource Diplomacy" in Southeast Asia to secure the raw materials essential for its EV and semiconductor ambitions.  
  • This move seems to integrate Act East with the "National Mission on Transformative Mobility," positioning India as a downstream processing alternative to the existing monopoly in the rare-earth sector. . 
  • KABIL signed an MoU with Australia’s Critical Minerals Office (CMO) to jointly evaluate and invest in lithium and cobalt mining assets. 
• "Extended Act East" via Pacific Island Engagement (FIPIC): India is expanding its strategic horizon beyond the Malacca Strait to the "Second Island Chain" by positioning itself as the "Voice of the Global South" for small island developing states.  
  • This approach uses demand-driven developmental assistance and climate resilience projects to build political capital in a region traditionally contested by major powers. 
  • In August 2025, India cemented this strategy by signing the 100-bed Super Specialty Hospital deal in Fiji to serve as a regional hub.

What are the Constraints in Translating Act East Vision into Outcomes?  

• Implementation Deficit: The "Over-Promise, Under-Deliver" Syndrome: India suffers from a chronic credibility crisis due to bureaucratic lethargy and lack of coordination between central agencies and state governments.  
  • While announcements are grand, the execution gap allows competitors like Japan and China to capture the infrastructure market, leading ASEAN nations to view India as a "talking partner" rather than an "acting partner" in development. 
  • For instance, the IMT Trilateral Highway was conceived in 2002 but remains incomplete.  
    • In contrast, China completed the China-Laos Railway (1,035 km) in just 5 years (2016-2021), transforming regional logistics. 
• The "Gateway" Blockade- Myanmar’s Unrest: The 2021 coup and subsequent intensification of the civil war have turned Myanmar from a land bridge into a strategic cul-de-sac (passage that is closed at one end).  
  • The loss of junta control over border towns to ethnic armed groups has rendered bilateral agreements void, effectively freezing India’s physical access to ASEAN and forcing a costly recalibration of security over connectivity.  
    • For instance, the Kaladan Multi-Modal Transit Transport Project is indefinitely stalled due to the Arakan Army capturing the Paletwa township in early 2024, further the Trilateral Highway has missed its deadline with no new completion date in sight. 
• Trade Asymmetry- Widening Deficit: India’s trade relationship with ASEAN is defined by a "low-value export, high-value import" trap, where India exports raw materials but imports finished goods.  
  • The reluctance to join RCEP (Regional Comprehensive Economic Partnership) has further isolated India from the region’s friction-less manufacturing supply chains, making its exports uncompetitive against Chinese alternatives. 
  • India’s trade deficit with ASEAN skyrocketed to $44 billion in FY23, a drastic increase from $7.5 billion in 2010. 
• Internal Instability- The Manipur Crisis: The ongoing ethnic conflict in Manipur (since May 2023) has shattered the "peace dividend" essential for the Northeast to function as the Act East launchpad.  
  • This internal volatility has forced the Centre to rethink Free Movement Regime (FMR), signaling a shift from "open borders for trade" to "hard borders for security," fundamentally contradicting the policy’s integrationist spirit. 
  • The Ministry of Home Affairs decided in 2024 to fence the entire 1,643 km India-Myanmar border, severing historic tribal economic ties. 
• The "Bangladesh Shock": The sudden regime change in Bangladesh (August 2024) and the ouster of the pro-India Sheikh Hasina government has endangered the eastern connectivity architecture.  
  • India’s reliance on Bangladesh for transit (via Chattogram and Mongla ports) to bypass the Siliguri Corridor is now vulnerable to political hostility, potentially isolating the Northeast again and stalling the BBIN (Bangladesh-Bhutan-India-Nepal) motor vehicles agreement. 
  • Compounding these strategic uncertainties are rising concerns over the safety of religious and ethnic minorities in Bangladesh, particularly Hindus, amid reports of targeted violence, forced displacement, and institutional apathy in the post-transition phase.  
    • Such developments strain people-to-people ties, fuel domestic political sensitivities in India, and limit New Delhi’s diplomatic bandwidth to deepen engagement. 
• China’s Omni-Presence- The Debt & Infrastructure Trap: Beijing has effectively encircled India’s eastern periphery by embedding itself into the critical infrastructure of Laos, Cambodia, and Myanmar through the Belt and Road Initiative (BRI).  
  • While India offers "demand-driven" development, it cannot match China’s speed, capital, or risk appetite, leading to a loss of strategic leverage in ASEAN forums where members are increasingly wary of antagonizing their largest economic patron. 
  • China’s Ream Naval Base upgrade in Cambodia and the Kyaukpyu Deep Sea Port in Myanmar gives it enhanced access, directly outflanking India’s Andaman and Nicobar Command and maritime influence in the Bay of Bengal. 
• Maritime Insecurity- The South China Sea Tightrope: While India advocates for "Freedom of Navigation," its hesitation to form hard security alliances in the South China Sea (SCS) that limits its utility as a security provider for ASEAN claimants (Philippines).  
  • As China aggressively uses "grey zone" tactics (water cannons, lasers), ASEAN nations are forced to seek US protection, leaving India’s "SAGAR" vision as militarily insufficient for their immediate survival needs. 

What Measures are Needed to Strengthen India’s Act East Policy? 

• Institutionalize a "Special Purpose Vehicle" (SPV) for Project Execution: To tackle the chronic delay in infrastructure projects like the Trilateral Highway, India must move beyond standard bureaucratic channels and establish a dedicated, autonomous Special Purpose Vehicle (SPV) empowered with financial autonomy and cross-ministerial authority.  
  • This entity would bypass red tape, enable faster decision-making like the "Metro Rail" corporations, and directly coordinate with host governments in Myanmar or Vietnam to expedite land acquisition and regulatory clearances.  
  • This shifts the approach from "diplomatic negotiation" to "corporate-style execution," ensuring deadlines are met and credibility is restored. 
• Pivot from "Land Bridge" to "Maritime Arc" Strategy: Given the instability in Myanmar blocking land connectivity, India needs to operationally pivot towards a "Maritime Arc" strategy that prioritizes direct shipping lanes and port-to-port linkages between India’s Eastern seaboard (Chennai, Vizag) and key ASEAN hubs (Jakarta).  
  • This involves incentivizing coastal shipping lines, creating a "Green Channel" for customs at ports for ASEAN-bound goods, and upgrading the Andaman and Nicobar Command into a commercial trans-shipment hub.  
  • This measure effectively "leapfrogs" the continental blockade to maintain economic integration through the maritime domain. 
• Integrate Northeast India into "Regional Value Chains" (RVCs): Instead of viewing the Northeast merely as a "transit corridor," policy must focus on transforming it into a "production node" integrated with Southeast Asian value chains, particularly in bamboo, agro-processing, and pharmaceuticals.  
  • This requires harmonizing quality standards with ASEAN nations and setting up "Export-Oriented Units" (EOUs) in border states that specifically cater to demands in Myanmar and Thailand.  
  • By aligning the "Make in Northeast" initiative with ASEAN’s import needs, India can create economic stakeholders in the border regions who will drive the policy from the bottom up. 
• Aggressive "Digital Diplomacy" and Fintech Integration: India should leverage its dominance in Digital Public Infrastructure (DPI) to create a "Digital Act East" framework, aggressively pushing for the interoperability of UPI (Unified Payments Interface) with ASEAN payment systems like PayNow and PromptPay.  
  • By offering India’s open-source technology stack for identity and payments as a "developmental partnership" tool, India can bypass physical barriers and integrate financially with the region's booming internet economy.  
  • This creates a low-cost, high-impact soft power footprint that China’s hard infrastructure cannot easily replicate. 
• Operationalize "BIMSTEC" as the Primary Delivery Mechanism: With SAARC defunct and ASEAN-India mechanisms often slow, India must shift its diplomatic weight to make BIMSTEC the primary engine for the Act East Policy's connectivity and security pillars. 
  • This entails finalizing the BIMSTEC Free Trade Agreement and the Coastal Shipping Agreement to create a legal framework that binds the Bay of Bengal community together.  
  • By treating BIMSTEC  as the "inner circle" of the Act East Policy, India can foster a tighter, more manageable economic zone that is less susceptible to the wider geopolitical tensions of the South China Sea. 
• Expand "Defense Diplomacy" to "Capacity Building": India needs to graduate from occasional naval exercises to becoming a sustained "net security provider" by offering institutionalized capacity building, such as training ASEAN navies in submarine operations, hydrography, and disaster response.  
  • Establishing permanent "Military Training Teams" in friendly ASEAN nations and offering "Lines of Credit" specifically for defense procurement (like the BrahMos deal) will entrench India as a reliable security partner.  
  • This creates deep strategic dependencies that serve as a counterbalance to external coercion in the region. 
• Leverage "sub-national Diplomacy" with Sister-City Frameworks: The central government should formally empower state governments in the Northeast and Eastern India to conduct "para-diplomacy" with their counterparts in Southeast Asia through a robust "Sister-City" framework.  
  • This involves delegating powers to states to sign specific MoUs for tourism, cultural exchange, and local border trade without needing constant Delhi clearance. This decentralization fosters organic, people-to-people connectivity and allows states to tailor their engagement based on specific cultural and economic synergies, making the policy more resilient and locally owned. 

Conclusion 

Revitalizing the Act East Policy demands a decisive shift from "declaratory diplomacy" to "delivery-based pragmatism," focusing on institutional agility and maritime workarounds to bypass continental bottlenecks. By embedding the Northeast into regional production networks and leveraging digital prowess, India can create an interdependent economic architecture that is resilient to geopolitical shocks. Ultimately, the policy’s success hinges on India’s ability to project itself not just as a market, but as a reliable engine of regional growth and stability.