National Attributes on Foreign Policy: India Act East Policy

Satryatama Ekaputra and Citra Hennida

Department of International Relations, Faculty of Social and Political Sciences, Universitas Airlangga

Keywords: AEP,Energy, Narendra Modi, India, national attributes

Abstract: The Act East Policy (AEP) is a policy initiated by Prime Minister Narendra Modi in 2014. This policy is an

improvement of Look East Policy formed by Narasimha Rao in the early 1990s. The aim of this policy is to

make India a strong country not only in the economic field but also in the military and in technology. The

establishment of the AEP is allegedly to keep pace with China's growing strength not only in Asia but also in

the world. In its development India has relations with countries such as China, Japan, Vietnam, Indonesia,

ASEAN and Australia in order to implement AEP. This AEP can be analyzed through national attributes level

of analysis, especially energy needs. it argues that the energy needs of a country can be a factor in shaping

the country's policies.

1 INTRODUCTION

The availability of energy becomes absolutely

necessary when a country wants to compete with

other countries in order to obtain the desired power.

The desire to gain this great power is applied by India

through the Act East Policy (AEP). But the AEP does

not come out of nowhere. The AEP is initiated by

Look East Policy (LEP) which has been part of India's

international involvement especially since the

opening of the economy in 1991. After receiving

support from the Indian government, the policy

evolved from what was originally only covering

economics and diplomatic with Southeast Asia into

security coverage and defense throughout Asia

Pacific. A few years before 2014, India has hinted at

playing a more strategic role in the region and

deepening ties with Japan, Vietnam and Australia.

This policy is also driven by a balancing strategy with

external forces that is China. Not only limited to the

power of China, India is also motivated for a larger

global role and shows its rise as a world trade

orientation (Rajendram, 2014).

In 2014, this policy changes during the leadership

of Prime Minister Narendra Modi to become AEP.

The AEP was formed by Modi at the Summit in

Myanmar in 2014. Analysts see that this policy is just

a change of name from Look East because both

policies are pursuing the same goal. It can not be

denied, however, that there are some areas that have

made significant progress through AEP compared to

LEP. Sajjanhar (2016) argues that this change is due

to India today is not the same as India in 1992. At that

time, India experienced periods that are not clear

primarily after the collapse of the Soviet Union.

These indefinite periods resulted in a sharp decline in

India's foreign exchange reserves so that the country

should provide sufficient protection against imports

even for only 10 days.

The real steps made by Modi shown following

AEP's establishment when visiting Singapore a year

later. Modi reiterated his promise to deepen relations

with ASEAN countries and ensure freedom of

navigation in the waters of Asia. India tries to expand

and deepen its relationship with the western countries

of its territory. But the problem is India is facing

Pakistan and the poor and small countries around it

who consider India a threat. India is therefore more

focused on finding partners in Asia-Pacific countries

and finding Australian and Japanese. India's

advantage when it comes to cooperation with Asia-

Pacific countries is facing Beijing that continues to

increase (Kugelman, 2016).

It can not be denied that India needs energy in

order to match China's strength. China has obtained

energy supplies from Sudan. This makes India look

for energy supplies. Australia and Indonesia were

later made India as partners in particular importing

energy from both countries. Kugelman (2016) implies

that this energy fulfillment requirement is the fuel of

industry in India. Therefore it can be said that the

search for energy sources became an important factor

forming AEP by India. India takes advantage of this

cooperation as well as possible to push it into a

Ekaputra, S. and Hennida, C.

National Attr ibutes on Foreign Policy: India Act East Policy.

DOI: 10.5220/0010280500002309

In Proceedings of Airlangga Conference on International Relations (ACIR 2018) - Politics, Economy, and Security in Changing Indo-Paciﬁc Region, pages 575-580

ISBN: 978-989-758-493-0

575

country that has double-digit economic growth over

the next decade. Australia became a natural gas

supplier because India did not have direct access to

Central Asia so that Australia emerged as a promising

figure of exciting opportunity. While the relationship

with Indonesia is to provide coal. This is evidenced

by 60% imports of Indian coal originating from

Indonesia (Kugelman, 2016).

2 NATIONAL ATTRIBUTES AND

FOREIGN POLICY ANALYSIS

In a paper entitled Foreign Policy Analysis, Classic

and Contemporary Theory, Hudson (2014) gives five

level of analysis in foreign policy namely, individual,

group, culture and national identity, domestic politics,

national attributes, and international system. These

national attributes become elements of the power of a

country. Hudson (2014) then added that national

attributes are a consideration in formulating foreign

policy.

The first national attribute is the size of the

territory. Hudson (2014) explains that the size of the

region affects the behavior of the state. Small

countries tend to play a passive and pragmatic role in

global politics, while large countries will act actively

and aggressively in the face of the same situation.

Therefore the way in which the small country is to

voice its opinions in multilateral forums and to avoid

bilateral practices. The second attribute is the

ownership of natural resources and geographical

location. If the country experiences a scarcity of

natural resources then the country will direct its

policy for the fulfillment of natural resources. This is

what applies to AEP by India which has a coal energy

and natural gas deficit that imports from Indonesia

and Australia. While geographical location is more

focused on climate or weather owned by the country.

The third attribute is the demographic. This third

attribute can be exemplified through China which has

a large male population. Therefore China is

progressing in the military field. The fourth national

attribute is power in the form of military power.

Major states tend to use their military power as a

means of pressuring other nations and acting in their

interests (East, 1973).

In the case of India, the authors emphasize the

second attribute of natural resource ownership. This

is supported by a statement by Indian researcher Vaid

(2016) who said that on May 5, 2016, India's Oil

Minister Dharmendra Pradan, which suggests India is

seeking to increase the market share of natural gas in

order to support increased domestic production at

competitive prices. India itself according to Vaid

(2016) is the fourth largest natural gas importer in the

world by taking 5.7% of global volume in 2014. The

scarcity of coal in India is increasingly apparent when

the newly renewable and new Minerals for Coal,

Power and Energy state that the Indian government

willing to consider long-term contracts for gas

supply. As the world's fourth largest coal importing

country, India develops adequate infrastructure for

pipeline transportation, as well as upgrades of gas-

based power plants. This facility allows the

consumption of about 300 Million Metric Standard

Cubic Meters per Day (MMSCMD). Current world

consumption is less than 50%. India therefore offers

an attractive offer for countries with natural gas

surplus provided at an affordable price.

Energy scarcity in India also occurs in coal

energy. India makes Indonesia a coal supplier

country. This is evidenced by the 37% export of

Indonesian coal delivered to India, while China,

which previously became the largest coal supplier in

Indonesia, only gets a share of 20% (Kurniawan,

2016). This shift in position due to the Chinese

government reduces the consumption of low-calorie

coal. Both of the above are coal and natural gas

become national attributes as forming foreign policy.

These two energies are the basis for the establishment

of India's foreign policy, the AEP. Without these two

energies India will find it difficult to implement AEP.

3 INDIA ENERGY DYNAMICS

One of the indicator in the level of analysis of national

attributes is demographics. The Office of the Chief

Economist (2015) states that India is the second most

densely populated country in the world after China.

This situation is a blessing for India to achieve

economic progress because of it has a great human

resources. Therefore getting quality human resources

is not a difficult thing. But in this paper the author

focuses more on the level of analysis of national

attributes in terms of energy ownership. When the

country needs a large supply of energy supply then

the country will direct its policy-making to gain

energy. This is what India does in AEP.

As the world's second most densely populated

country, India needs enormous energy needs. India's

total energy supply is dominated by coal which is

about 45% in 2013 followed by bio-energy and oil.

This does not make India ignore the need for natural

gas. This is evidenced by the proportion of natural gas

that increased up to 8% in 2011. However, this

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576

situation has changed that is down to 6% as a result

of the high price of Liquid Natural Gas (LNG) (Office

of the Chief Economist, 2015).

Energy security is a major policy concern in India

given the enormous influence on the energy sector

and increased dependence on imports to meet its

energy supply. The Office of the Chief Economist

(2015) states that India has a substantial supply of

coal, oil and gas but these three resources are limited

by inefficient regulation. Therefore there is a growing

gap between oil and gas demand and domestic

availability. This is then seen as bringing the burden

on the Indian economy itself, especially when the

three commodities are at a high point. Under these

circumstances the Indian government has made a

commitment to reduce its dependence on imports in

the medium term. Although the price of imported

fossil fuels is low, there is still an incentive to ensure

that India can maximize domestic production and its

dependence on imports be minimized (Office of the

Chief Economist, 2015).

The above statement indicates that India wants to

escape from dependence on imports, but India needs

to pay attention to the availability of its energy. As a

country that needs energy to boost its economy, India

also needs to pay attention to its country's electricity.

The per capita electricity usage in India is lower than

in other developing countries in 2011. Almost a

quarter of India's population or about 300 million

people have no access to electricity. 250 million of

them only get electricity three to four hours per day.

This has resulted in many Indians who still rely on

generators and diesel reserves. The issue is

increasingly highlighted when in the summer of 2012

there are about 600 million people who do not get

electricity at all in a few days (Office of the Chief

Economist, 2015). This problem is then viewed as a

result of low electricity prices in India which makes

incentives for investment too low. Another cause is

the large number of debt-induced firms under

pressure from governments that continue to maintain

low electricity prices. It is also what makes fraudulent

practices like electricity theft happen. Therefore, the

national attribute of energy availability becomes the

AEP form factor. This is evidenced during the

leadership of Prime Minister Narendra Modi who is

committed to ensuring the availability of electricity in

every household in India by 2019. The struggle to

reach up to that stage takes time. Therefore Modi also

emphasized to build power transmission

infrastructure and infrastructure (Office of the Chief

Economist, 2015).

Gas and electricity become two inseparable

commodities. Much of India's natural gas is used as a

powerhouse. Gas is also used for industrial raw

materials fertilizer manufacture. Another factor

limiting gas consumption in India is infrastructure.

India has a pipeline of more than 15,000 km, but it

only covers a small proportion of India's total

population. Therefore there is a lack of gas

infrastructure. There are areas that can consume gas,

but there are other areas that can not enjoy the gas

infrastructure. The Indian government does not

remain silent. Many planned but pending expansions

for not obtaining approval include grounds related to

land rights. Another thing that adds to the complexity

is the fact that the pipeline crosses some countries that

keep the burden of regulation increasing (Office of

the Chief Economist, 2015).

While Cornot-Gandolphe (2016) emphasizes the

condition of coal owned by India. Cornot-Gandolphe

publicly pointed out that India's coal is of low quality.

The poor quality of coal owned by India is a big

problem for companies and the environment. Coal in

India is obtained by mined, therefore Indian coal has

high ash content and contains foreign materials such

as sandstone and debris. This results in low coal

prices due to the mixing of such foreign materials.

This high level of ash also causes some problems such

as power plants to operate ineffectively because the

ash inhibits transmission, operation and maintenance

of the plant becomes more difficult due to corrosion,

high ash levels cause higher pollutant emissions of

higher CO2 (Cornot- Grandolphe, 2016).

Eco-friendly coal is coal that underwent washing

process. But the problem is that eco-friendly coal

isrelatively scarce in India. This is due to the high

price of laundering. Coal washing in India itself is

still considered bad because of the high content of ash

attached to coal. Cornot-Grandolphe (2016) explains

that currently only about 20% of coal is washed in

India. Lower 30% than the global average. But the

Indian government still believes that proper coal

washing can be done in the future to cope with climate

change and air pollution.

4 INDIA QUEST FOR ENERGY

IN AEP

India's need for natural gas and coal energy is seen by

the author as a factor that shapes AEP by Prime

Minister Narendra Modi. Rajendram (2014)

considers that AEP is a policy that can make India a

great power in Asia other than China even in the

world. Therefore, in order to achieve that goal, India

has relations with China, Japan, ASEAN, Vietnam,

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577

Indonesia, to Australia. But to establish relationships

with other countries, India must address its energy

needs to attract the attention of other countries. India

made Australia and Indonesia a close ally to tackle its

energy problems as part of the AEP.

Pandya and Chakraborty (2016) explain India's

long-term purchase of Australian natural gas is for the

benefit of low prices. While visiting Brisbane for an

energy-security meeting between India and Australia,

India's energy minister Piyush Goyal said that chAEP

gas prices can increase many activities making it

easier to achieve national goals. The search for

natural gas energy to Australia is also inseparable

from the price decline of up to 75%, making India

look for chAEPer energy supply. Prime Minister

Narendra Modi also targets to extend renewable

power capacity fivefold to 175 gigawatts in seven

years (Pandya and Chakraborty, 2016). The statement

was also reinforced by Prasad (2016) who explained

that Australia's selection as a gas supplier country is

reinforced by the fact that Australia is a country with

2% world natural gas reserves or about 2.8 trillion

cubic meters. Australia can therefore become a

country of gas and uranium exporters of up to $ 71

billion in 2013-2014. Prasad (2016) also stated that

Goyal itself urged Australia to supply gas at an

affordable price given the fact India wants to replace

coal energy into natural gas.

The Indian government's desire to replace coal

energy is not proven. This is because India makes

Indonesia a coal supplier country. Kurniawan (2016)

stated that the direction of Indonesia's coal exports

has changed. China, which in the past has been the

largest coal export site has been replaced by India.

This can not be separated from China's decision to

reduce the use of coal that is using renewable energy.

This renewable energy is used to be a powerhouse.

By 2015, China's position shifting from the top of the

largest coal importing country is evidenced by India's

37% import of coal, while China is only about 20%.

Kurniawan (2016) goes on to say that this change of

China and India's position has been predicted earlier.

The Chinese government decided to use low-calorie

coal energy. On the other hand, India's consumption

of coal is still high. The decline in demand from

China then makes Indonesia's coal production down

14.4% by 2015. The Ministry of Energy also shows

that coal exports in 2015 fell 22.65% to 295.450.000

tonnes. This decline is expected to continue for the

Indonesian government as China continues to reduce

its coal consumption. India itself experienced peak

levels on coal imports by mid 2015 (Kurniawan,

2015).

Kugelman (2016) states that when India can meet

its energy needs, in the coming decade India can

achieve double-digit economic growth. This is what

is contained in the AEP. Rajendram (2014) also

expressed that Prime Minister Modi is continuing to

improve its energy economy in order to gain

cooperation with countries such as China, Japan,

Vietnam, Indonesia, ASEAN and Australia. The first

country is China. China is a country that has great

influence for India not only in economy but also in

security. The presence of China in the Indian Ocean

has also been significant in recent years, due to the

growing relationship with Pakistan, Sri Lanka and the

Maldives. The Indian Ocean is also an important

route in the field of energy and trade in China. 70%

of oil supply and 80% of the trade is sent through the

ocean (Rajendram, 2014). Seeing the growing

potential of China in the future, India considers that

establishing relations with China is a strategic move.

India therefore requires a sufficient supply of energy

to offset the Chinese economy. There are 63% of the

people who have confidence that the relationship

between China and India will be more intense in the

future (Rajendram, 2014).

The second country is Japan. The relations

between India and Japan are shown with an emphasis

on technology and economics. Bilateral relations

between the two countries can also be viewed as

minor as the trade rate of both countries only reaches

$ 16 billion by 2014 (Rajendram, 2014). The third

country is Vietnam. The interaction between India

and Vietnam focuses on cooperation to compensate

for China's strength, especially in the case of the

South China Sea. No doubt the energy problem of

petroleum is a contested issue between Vietnam and

China. Indian companies have also started investing

in the oil sector, mineral exploration, sugar

manufacturing, and agrochemicals in Vietnam with

total registered capital of $ 252 million (Rajendram,

2014). The fourth country is Indonesia. Indonesia is

the country that became the biggest coal supplier for

India. India and Indonesia relations have been

established when India joined Indonesia in the Non-

Aligned Movement. Rajendram (2014) even

explained that Indonesia has become the largest

bilateral partner for India with a total value of more

than $ 19 billion. Of the total value 37% of which are

allocated for coal (Kurniawan, 2016). India's relations

with ASEAN focus more on cooperation in security.

The last country is Australia. The relationship

between India and Australia is not solely on the field

of imported natural gas energy, but also emphasizes

the free trade agreement and the development of

defense and security (Rajendram, 2016).

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In the end regardless of the country that India is

working for, the energy requirement is a necessity to

be solved by India. This is because both natural gas

and coal are important components of the global

energy mix considering the two components are

chAEP, plentiful, and widely available. Coal is the

main fuel used in power generation. During 2013,

coal use in the world increased by 50%, almost closer

to the world's total energy demand in terms of energy

(Office of the Chief Economist, 2015). Coal

enthusiasts themselves vary. In the late 1980s the EU

was at the peak of coal users. While in 2005, the

United States became the largest coal consuming

nation in the world. In 2012, China shifts America

from the peak of coal consumption. But things

changed again when India decided to consume large

amounts of coal to shift China from the peak

consumption of coal (Office of the Chief Economist,

2015). With regard to its own natural gas

consumption, the Australian company declares no

objection to working with India. This is due to

technological advances to facilitate natural gas

production and delivery routes. With the huge amount

of Australian natural gas exports, Australian

companies also provide Coal Bed Methane (CBM)

technology to India. This collaboration between India

and Australia makes it easier for India to achieve its

goal of providing affordable and clean energy for its

people and certainly implementing AEP (Press

Information Bureau Government of India Ministry of

Power, 2016).

5 CONCLUSION

Energy availability becomes an important factor for

the country when it wants to compete with other

countries especially to get the desired power. India

has made the need for the main energy of coal and

natural gas to form the AEP policy. The formation of

foreign policy from the side of national attributes is

not only limited to energy needs, but also the size of

the country size, geography, and demography. In the

case of AEP this time the authors argue that energy

demand factor becomes the biggest factor forming

AEP. The author also argues that energy demand in

India is a driving factor for India to compete with

other Asian powers such as China.

There are two kinds of energy needed by India

that is natural gas and coal. India needs natural gas to

meet the electricity needs of its entire population.

Almost a quarter of India's population or about 300

million people have no access to electricity. 250

million of them only get electricity three to four hours

per day. This has resulted in many Indians who still

rely on generators and diesel reserves. The issue is

increasingly highlighted when in the summer of 2012

there are about 600 million people who do not get

electricity at all in a few days. India's coal-related

needs arise due to poor quality coal owned by India.

Therefore departing from these two circumstances

India decided to cooperate with Australia and

Indonesia in fulfilling its energy needs.

The author has finally argued that this AEP is a

means of demonstrating Indian power in the

international eyes. Therefore, in the implementation

of this AEP, India embraces China, Japan, Vietnam,

Indonesia, Australia and ASEAN as partners.

Although India views China as a threat but people

believe that China can be a good partner. Before

reaching that goal, India must think about its needs.

Without adequate energy then India can not compete.

Energy in this regard can be seen as India's main fuel

economy in order to compete with major Asian

countries.

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