Beijing march into Asean is homework for New Delhi

Led by their Prime Minister Wen Jiabao, the Chinese delegation let everyone in Vientiane know that it might be on track to achieving its target of a 100 billion trade with Asean nearly a year ahead of schedule. Considering that Laos8217; own GDP stands at less than 2 billion, the statistic evoked some awe. It certainly overshadowed India8217;s more modest trade of 15 billion.

Other numbers reinforced the point. India may have attracted a total investment of 620 million from Asean between 1991 and 2002 against approvals to the tune of 4 billion, but investments from Asean into China had already crossed 34 billion by June this year.

Now, as the two Asian giants rush to bring down barriers to investment and trade with this region for the real Big Bang, Singh again finds himself playing catch-up.

The comparison irritates Indian officials, who point repeatedly to China8217;s headstart. But the big league is a harsh place and since investors keep mentioning both countries in the same sentence, India has no choice but to rid itself of its somewhat patchy reputation as a place that does not keep its promises.

China unveiled its plans to create what it calls, with some hyperbole, the world8217;s largest free trade area with Asean by 2010. As part of its early harvest programme, duties on more than 150 products have already been eliminated in trade with the region.

Contrast this, as one Asean official pointed out, with Atal Behari Vajpayee8217;s promise that by 2005, Indian tarrifs would be down to South-East Asian levels. That date is just a month away but tarrifs in India still stand at around 25 per cent while tarrifs in the Asean hover around 8 per cent.

Again, India has its compulsions. As it strives for its own FTA with Asean, it points out that it wants the 8216;8216;rules of origin8217;8217; ironed out. In other words, it does not want toys and electricals from China swamping the Indian market in the guise of being Asean products.

Asean leaders are sympathetic. Singh had pleasant meetings with Singapore8217;s new prime minister Lee Hsien Loong and fellow-guest Junichiro Koizumi from Japan. These countries are not rushing India but their businessmen are merely parking their money in China.

Singh and his officials are working overtime to emerge from China8217;s shadow, but National Security Advisor J N Dixit knows the dimensions of the task.

He once quoted a leader of the Asean Secretariat as telling him: 8216;8216;We keep hearing of your leaders talking about India8217;s Look East policy. But you keep looking without doing much about it.8217;8217;