[Answered] Evaluate the viability of India’s economic ‘Act East’ integration alongside expanding strategic gaps, amidst changing US postures and growing Chinese nuclear assertiveness in the Indo-Pacific.

Introduction

With nearly 60% of global GDP and trade concentrated in the Indo-Pacific, the Economic Survey 2025–26 identifies strategic indispensability through global integration, making India’s Act East policy simultaneously an economic necessity and geopolitical imperative.

Why Economic Integration has become Central to Act East

1. Changing Indo-Pacific Geoeconomics: Second Trump administration’s transactional trade approach and tariff-centric policies reduce predictability of US-led economic architecture. Economic Survey 2025-26 stresses global integration with strategic resilience, not protectionism. Example: IPEF trade pillar uncertainty.
2. India’s Opportunity as a “G2+1”: Growing strategic autonomy enables India to emerge as an independent rule-shaper, not merely a balancing power. Large domestic market, Digital Public Infrastructure (DPI) and demographic dividend enhance bargaining power. Example: UPI diplomacy.
3. Supply Chain Diversification: Global China+1 strategy creates opportunities in electronics, semiconductors and critical minerals. Budget 2026-27 continues emphasis on manufacturing competitiveness and infrastructure-led growth.
4. ASEAN-Centric Economic Integration: ASEAN remains India’s gateway to East Asia. Greater integration supports GVC participation, export diversification and resilient manufacturing. Example: India-ASEAN FTA.

Expanding Strategic Gaps

1. Military & Nuclear: China’s demonstrated SLBM capability (JL-series) strengthens survivable second-strike deterrence. Expansion of nuclear triad widens qualitative gap with India’s deterrence. Need for faster deployment of K-5/K-6 SLBMs and Arihant-class expansion. Example: Sea-based deterrence.
2. Maritime: PLA Navy’s increasing submarine operations extend beyond South China Sea. Challenge to India’s SAGAR vision and Indian Ocean dominance. Requirement of stronger ASW, seabed surveillance and P-8I integration.
3. Economic: India remains outside RCEP and CPTPP, limiting influence over regional trade rules. NITI Aayog leadership has argued for reconsidering participation in mega-regional trade blocs to strengthen exports and manufacturing.
4. Technological: China dominates emerging technologies: AI, semiconductor ecosystems, digital infrastructure and reusable launch systems. Strategic technologies increasingly determine geopolitical influence.
5. Diplomatic: ASEAN seeks inclusive balancing, not bloc politics. India enjoys credibility as a trusted, non-alliance partner.

Challenges to Economic Act East

1. Limited manufacturing competitiveness vis-a-vis ASEAN.
2. Infrastructure deficit in North-East connectivity. Example: Kaladan Project delays.
3. Persistent trade deficit with China.
4. Regulatory barriers affecting investment flows.
5. Slow implementation of connectivity corridors. Example: IMT Trilateral Highway.

Way Forward

1. Economic: Pursue high-standard FTAs with ASEAN, Japan and South Korea. Gradually evaluate accession to CPTPP and calibrated engagement with RCEP after domestic preparedness and build resilient regional value chains.
2. Strategic: Strengthen QUAD, IPOI, SAGAR and MAHASAGAR through functional cooperation. Accelerate submarine fleet modernization and integrated missile defence.
3. Technological: Expand semiconductor ecosystem under India Semiconductor Mission. Invest in critical minerals, AI, cyber security and reusable launch vehicles.
4. Connectivity: Fast-track North-East multimodal infrastructure, complete IMT Highway and Kaladan projects and enhance BIMSTEC-led regional integration.
5. Institutional: Establish Indo-Pacific Economic Coordination Cell integrating MEA, Commerce, Defence and NITI Aayog. Promote public-private partnerships in maritime logistics and digital connectivity.

Conclusion

As President K.R. Narayanan observed, India’s destiny lies in harmonising strategic autonomy with global engagement. Sustainable Indo-Pacific leadership demands integrating economic connectivity, technological capability and credible maritime deterrence into one coherent vision.