The Indian government, hoping to give more teeth to its “Act East Policy,” has decided to expand the country’s economic links with Cambodia, Laos, Myanmar and Vietnam by promoting private sector investments in these countries through a project development company, reports the Economic Times on March 2.
Indian Finance Minister Arun Jaitley made the announcement while presenting the annual budget at the end of February. "The 'Act East' policy of the government of India endeavours to cultivate extensive economic and strategic relations in Southeast Asia .. [therefore] a project development company through separate special purpose vehicles [will] set up manufacturing hubs in [these countries],” Mr Jaitley said.
Indian Prime Minister Narendra Modi has reignited his country’s “Look East” policy through a change of name – “Act East” policy – and more interaction with Southeast and East Asia.
Part of the push is economic and diplomatic, part to offset China’s growing influence in the region.
With China undertaking infrastructure projects at strategic locations in South Asia and simultaneously increasing its naval presence in the Indian Ocean, India too has been seeking closer ties with several of China's neighbours, particularly Vietnam with which New Delhi now has growing defence and security relations. Experts point out that China has also been deepening its economic links and expanding its presence particularly in Laos and Cambodia.