India's Look East Policy in the South China Sea
Image Credit: mikebaird (flickr)

India's Look East Policy in the South China Sea


In mid-July, Vietnam announced that it would extend the contract of India’s ONGC Videsh Ltd. (OVL) –the international arm of India’s Oil and Natural Gas Company (ONGC)–for block 128, which lies in Vietnam’s exclusive economic zone (EEZ) in the South China Sea.   After initial exploration, OVL had concluded that development of the block within the time limits of the original contract would be economically unfeasible. Yet, Vietnam’s new offer extended the development timeline and added data that would reportedly make development more efficient. OVL accepted the offer four days later.  

Hanoi’s decision to extend the contract comes in the wake of the underwhelming July conference of the Association of Southeast Asian Nations (ASEAN) in Cambodia, which failed to produce a communiqué, much less a Code of Conduct delineating acceptable practices in the South China Sea. The offer signals Hanoi’s wish to keep an Indian presence in the South China Sea to balance China’s assertive behavior. At the same time, OVL’s economic relationship with Vietnam highlights the expansion of India’s Look East Policy, wherein India’s strategic goals are furthered by the presence of legitimate economic development in the South China Sea.

India’s growing engagement with Vietnam, and by extension in the South China Sea, is a logical expansion of its Look East Policy (LEP). The policy was first initiated in 1991 under then-Premier P.V. Narasimha Rao. Premier Rao further delineated it in 1993 during a trip to South Korea when he called for economic liberalization and an “opening in the floodgates” to South Korean chaebols (mega corporations). Just months after the visit, Daewoo automobile was successfully launched in India.  Beginning in earnest at the start of the 21st century, the geographic scope of India’s LEP extended downward to Southeast Asia and the Pacific. In the process, India appears to be asserting a strategy that combines economic, political, and security leverage in the Asia-Pacific. The comprehensive nature of this policy has enabled the economic activities of India’s private and state-owned companies to be in line with New Delhi’s expanding diplomatic relations with the region. Most recently, the policy manifests itself in efforts by private and state-owned Indian companies and the Indian Navy to actively develop ties with ASEAN countries bordering the South China Sea.

The evolution of New Delhi’s LEP to involve ASEAN reflects the increasing geostrategic importance of the South China Sea. India is not a South China Sea littoral state and has no territorial claims in the region. However, the stability and freedom of navigation in the South China Sea are vital interests for New Delhi—around fifty-five percent of India’s trade with Asia passes through this strategic sea route, including crucial energy supplies.  The South China Sea is an economic security lifeline for India and New Delhi relies heavily on the United States and ASEAN partners for cooperation in protecting shared interests in the region. The strategic relationships built with ASEAN nations were even acknowledged by an editorial in the China-based Global Times as paramount to India’s national security. Conversely, the success of India’s strategy is equally important for Vietnam. Potential economic benefits aside, OVL’s presence in the South China Sea and effort towards joint development of block 128 present Vietnam with international credibility over the disputed economic zone.

Apparently in reaction to Vietnam’s decision to extend OVL exploration off its coast, China’s National Offshore Oil Corp. (CNOOC) announced on June 25, 2012 that it would accept bids from foreign oil companies to jointly develop nine blocks (JY22, HY10, HY34, BS16, DW04, DW22, YQX18, RJ00, RJ27) in the South China Sea, including areas that overlap with blocks that Vietnam has already started jointly exploring and developing with India’s OVL, the United States’ Exxon Mobil, and Russia’s Gazprom.   CNOOC blocks HY34 and BS16 overlap with Vietnam blocks 148 and 149, which belong to PetroVietnam Exploration and Production Company (PVEP). CNOOC blocks RJ27, RJ03, YQX18, and DW22 overlap with blocks belonging to ONGC, Gazprom, and Exxon, who among themselves are developing Vietnam blocks 128-132 and 156-159. Chinese state media reported a month after the initial offer that the CNOOC tender is progressing smoothly, and claims several U.S. oil and gas companies have submitted offers, but declined to give any specific information about foreign participators.

The latest flare up in tensions in the South China Sea, underscored by China’s reaction to India’s energy diplomacy with Vietnam, is illustrative of the frail state of the South China Sea dispute. To be sure, China perceives any actions that encroach upon what it considers Chinese sovereign territory as unacceptable, and therefore India’s warming relations with ASEAN countries as a hedge against its claim in the South China Sea. The almost-universal acknowledgement of the United Nations Convention on the Law of the Sea (UNCLOS) as international law and the upward trajectory of Indo-ASEAN relations may set a solid precedent for the peaceful and non-military resolution of future disputes by reinforcing the role of non-littoral states in the South China Sea. Yet, energy disputes such as this one reflect the disjointed state of the South China Sea dispute. While regional peace and stability may be the cited goal of both India and China, the shadow of intolerance that China casts over energy diplomacy will continue to define the potential paths to conflict resolution in the South China Sea.

By Rosalind Reischer is a research assistant for Project 2049 where this piece originally appeared

March 20, 2013 at 20:59

Great!! You learnt Politics to give such a comment. This is what you learn from years of studying and involving in Politics?

Ramon Alcaraz
September 26, 2012 at 03:53

The worst part about me being a Filipino… is that the Philippines is right at the heart of Soutch China Sea/West Philippine Sea. It's impossible for ASEAN, China, Japan, India, Taiwan, Australia and Guam without stepping on the Philippines first. If only we have an able navy then this limp will be rather a tool.

September 4, 2012 at 19:30

It is comprehensive the India’s Look East policy.
Surround by the enemy hereditary  and Chinese core ally Pakistan on the West, by the big actual adversary and old enemy China on the North, plus the more or less Chinese’s client states of Myanmar and Bangladesh on the Eastern side, the biggest democracy in the world must in a way or other break  the Chinese encirclement. They have made the good choice in involving in the SCS’ dispute.
By claiming all the SCS unreasonably, China have stupidly transformed almost all her southern neighbors in enemies and given the golden occasion for her adversaries, India and US at first, to intervene in her back yard!
In making Vietnam, China’s thousands years old enemy, an ally, India pay back well the Pakistani – Chinese alliance game! It maybe already too late for China to get out from the big mess SCS's claim made by herself!

Kalyan V.
September 3, 2012 at 18:19

India is looking for wars.  India is ready for wars.  

September 3, 2012 at 15:07

Dude its seems you are an alien…………or your history classes were pathetic…………..indians are a persian tribe ……….. then the chinese must be a mongolian tribe right…………..ha ha 

September 3, 2012 at 15:03

I see, today's lesson is about Racism, and the assigned reading is an unwelcomed intrusion.

Unwelcomed Intrusions
September 3, 2012 at 02:59

Indians are not Easterners.  They are part of the Persian tribe; Its diaspora from ancient past.  So Indians have no business really in the East.  They should look West and be comforted by pats to their heads from paternalistic and patronizing Westerners. 
If they come to the East, their drilling platforms and warships should be blasted out of the waters.  Sometimes idiotic Indians don't know when they are treading into mine fields.  Like the trolls here one day, their heads will be chopped off by the hundreds as they are doing in Rakhine, Assam, Manipur, etc..

Rick B
August 31, 2012 at 16:39

Well-written piece.  I'm curious what the US and Russian reactions will be in response to the Chinese blocks which overlap their own development interests. 

August 31, 2012 at 15:54

Mark my words, the bloody South China Sea (or East Sea as they call it in Vietnam) will be the cause of the next global war. It will not be Western powers that start the next war, but the Eastern ones; China, India, and Russia are all on edge in that region, and Vietnamese-Chinese relations are at the breaking point. Hanoi is at the point of leasing a naval base near Halong Bay, in the north, to the Americans, as to have an American military presence as a deterant; the Vietnamese expect American support, as they do Russian support. 
Pit is a powder-keg ready to blow, all over the potential of oil.

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