How India's Act East Policy Works
India's Act East Policy — launched by Prime Minister Modi in 2014 as an update to Narasimha Rao's 1992 "Look East" policy — reflects India's recognition that its strategic and economic future is integrally connected to Southeast Asia and the broader Indo-Pacific. "Look East" was primarily economic in orientation: seeking trade and investment from ASEAN and East Asia to complement India's post-1991 liberalisation. "Act East" maintains the economic orientation but adds security, connectivity, and civilisational dimensions: engaging ASEAN on maritime security; deepening the India-Japan "Special Strategic and Global Partnership"; strengthening India-Vietnam defence cooperation; pursuing the Free Trade Agreement with ASEAN; and anchoring India's Indo-Pacific strategy in its northeastern land connections to Southeast Asia.
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| Representational Visualisation: How India's Act East Policy Works |
The Act East Policy operates on three geographic tracks
simultaneously. The first is the ASEAN relationship — India's most
institutionalised Southeast Asia engagement, through the India-ASEAN Summit
(annual), India-ASEAN Free Trade Area (AIFTA, 2010), and bilateral engagements
with each ASEAN member. The second is the East Asia relationship — Japan as
India's largest development aid partner and most important security co-partner
in the Indo-Pacific; South Korea as a significant trade and technology partner;
Australia as a Quad member and increasingly important economic partner. The
third is the connectivity track — India's northeast as the land bridge between
South Asia and Southeast Asia, through BIMSTEC frameworks, the Kaladan
Multimodal Transit Transport Project (India-Myanmar), the
India-Myanmar-Thailand Trilateral Highway, and the planned
India-Myanmar-Thailand Trilateral Railway.
What You Need to Know
- Act
East vs Look East: Look East (1992, Narasimha Rao) was primarily economic
— trade, investment, technology from ASEAN; Act East (2014, Modi) adds
security (maritime cooperation, defence agreements), connectivity (land
bridges to Southeast Asia), civilisational (Buddhist heritage
connections), and political leadership dimensions.
- ASEAN-India
relations: India and ASEAN established full dialogue partnership 1992;
ASEAN-India Summit annual since 2002; India-ASEAN Free Trade Agreement in
Goods (2010); ASEAN-India Comprehensive Economic Partnership (RCEP — India
withdrew in 2019, citing China trade imbalance risk); India-ASEAN FTA
review underway 2024–2025 to address imbalances.
- India-Japan
Special Strategic and Global Partnership: Japan is India's largest
bilateral ODA (Official Development Assistance) donor — $29 billion in
committed projects including Mumbai-Ahmedabad High Speed Rail (Bullet
Train), Delhi-Mumbai Industrial Corridor, North-East connectivity; both
are Quad members; Japan and India have a Reciprocal Access Agreement
(defence) signed 2024; PM Modi and PM Kishida/Fumio met multiple times.
- India-Vietnam
strategic partnership: Vietnam is India's most significant Southeast Asian
security partner; India has provided BrahMos missile system and naval
patrol vessels; defence cooperation includes training; economic
relationship is growing; Vietnam's South China Sea disputes with China
create convergent interests with India; both have continental shelf
disputes with China.
- BIMSTEC
2025 summit: PM Modi visited Thailand for the BIMSTEC
(Bangladesh-India-Myanmar-Sri Lanka-Thailand-Nepal-Bhutan) summit in April
2025; BIMSTEC serves as both Act East and Neighbourhood First forum; the
summit focused on: maritime security, connectivity, trade,
counter-terrorism; Modi's attendance signalled the importance of this Bay
of Bengal grouping as SAARC's effective replacement.
How It Works in Practice
1. India's northeast as the Act East gateway: India's
northeastern states (Mizoram, Manipur, Nagaland, Arunachal Pradesh, Meghalaya)
share borders with Myanmar, Bangladesh, Bhutan, and China; they are culturally
connected to Southeast Asia; the Act East Policy conceptually makes the
northeast a bridge rather than a periphery. The Kaladan project (connecting
Mizoram to Myanmar's Sittwe port, giving India a non-Bangladesh maritime access
route) and the India-Myanmar-Thailand Highway are the physical expressions of
this gateway concept. The Manipur ethnic conflict (2023–2025) and continuing
Northeast insurgency complicate the Act East narrative by making the gateway
states themselves internally unstable.
2. India in the Quad framework: The Quad
(Quadrilateral Security Dialogue: India, US, Japan, Australia) revived at
leader level in 2021 provides India with a maritime security cooperation
framework for the Indo-Pacific. Quad meetings, Malabar naval exercises
(India-US-Japan maritime exercise), and technology-sharing agreements give
India a security partnership that supplements bilateral defence agreements.
India's Quad participation is calibrated — it supports the "free and open
Indo-Pacific" framework while resisting any Quad characterisation as an
"Asian NATO" that would make China-India normalisation more
difficult.
3. RCEP withdrawal — the trade-off decision: India's
October 2019 withdrawal from the Regional Comprehensive Economic Partnership
(which includes China, ASEAN, Japan, South Korea, Australia, New Zealand) was
the most significant Act East policy reversal: India withdrew citing concerns
about Chinese import floods through RCEP; the withdrawal left India outside
Asia's most significant trade agreement; RCEP came into force in 2022 without
India; India's trade relationship with ASEAN has suffered from the absence of
competitive terms. The RCEP withdrawal illustrates the tension between Act
East's connectivity ambitions and India's domestic economic protection
instincts.
4. India's Indian Ocean Region (IOR) strategy: Act
East connects to India's broader Indian Ocean strategy: the "SAGAR"
doctrine (Security and Growth for All in the Region); IOR connectivity through
port development in Sri Lanka, Bangladesh, Myanmar, Maldives, Mauritius,
Seychelles, and Madagascar; maritime domain awareness through
information-sharing with island states; and counter-piracy,
counter-trafficking, and humanitarian assistance (HADR) operations. India
frames itself as the "net security provider" in the Indian Ocean — a
claim that the 2025 BIMSTEC summit reinforced.
5. India-Australia comprehensive strategic partnership:
Australia has emerged as India's most transformed bilateral relationship in the
Act East framework: the ECTA (Economic Cooperation and Trade Agreement, signed
April 2022, India's first FTA with a developed country in a decade) covers
goods and services; both are Quad members; India-Australia 2+2 dialogue
(Defence + Foreign ministers) was established; Australian investment in Indian
manufacturing and Indian IT workers in Australia have deepened the economic
relationship.
What People Often Misunderstand
- RCEP
withdrawal was a strategic mistake by most trade economists' assessment:
India's decision to stay out of RCEP has left it outside the world's
largest trading bloc; the stated justification (China trade imbalance
through RCEP) was partly valid but overestimated; India has been
negotiating re-entry or a modified RCEP relationship since 2021 without
conclusion.
- The
India-ASEAN relationship is primarily trade, not security: Despite the
Act East Policy's security dimensions, India-ASEAN cooperation is
primarily economic and the trade relationship is unbalanced in ASEAN's
favour; ASEAN sees India as a large market but also as a country that has
been slow to liberalise services and rules of origin; the Act East
security dimension (maritime cooperation, counter-terrorism) is real but
secondary to trade in ASEAN's India calculus.
- India's
northeastern connectivity projects face implementation delays: The
Kaladan project, India-Myanmar-Thailand Highway, and BIMSTEC connectivity
projects have experienced significant delays due to: Myanmar's civil war
(post-2021 coup) disrupting India-Myanmar projects; India's northeastern
infrastructure construction challenges; and the complexity of
multi-country coordination.
- Japan's
ODA to India is loans, not grants: Japan's $29 billion committed
development assistance is predominantly soft loans (ODA loans) at very low
interest rates — not grants; India repays these loans over decades; the
headline figure suggests more Japanese generosity than the actual grant
element of Japan's ODA.
- "Indo-Pacific"
as a concept is partly a US framing that India has adopted selectively:
The US, Japan, and Australia use "Indo-Pacific" to frame China
containment; India uses "Indo-Pacific" for its own purposes —
emphasising Indian Ocean primacy and ASEAN centrality rather than China
containment; India resists "Indo-Pacific" readings that would
make it a China-containment instrument.
What Changes Over Time
Myanmar's civil war (ongoing since the February 2021 coup)
has severely disrupted India's Act East connectivity corridor investments
through Myanmar; the Kaladan project's completion depends on stability that
doesn't currently exist. India-Australia ECTA's full implementation — with
mutual recognition of qualifications and expanded services trade — will be the
most consequential Act East bilateral development of 2025–2027.
Sources and Further Reading
- Insightsonindia
— Neighbourhood First and Act East: https://www.insightsonindia.com/2025/04/16/upsc-editorial-analysis-indias-strategic-convergence-of-neighbourhood-first-and-act-east-policies/
- CSIS
— India's strategic choices: https://www.csis.org/analysis/indias-future-strategic-choices-complications-mass
- Chatham
House — BRICS Quad: https://www.chathamhouse.org/2025/07/back-back-brics-and-quad-meetings-highlight-indias-increasingly-difficult-balancing-act
- Khan
Global Studies — India's foreign policy: https://www.khanglobalstudies.com/blog/indias-foreign-policy-2025/
- Stimson
Center — BRICS, Quad, multi-alignment: https://www.stimson.org/2022/brics-quad-and-indias-multi-alignment-strategy/