Context: Prime Minister Narendra Modi, emphasized India's stance on ‘development, not expansionism,’ in comments seen as directed at China's actions in the South China Sea and Indo-Pacific. He made these remarks at an event hosted by Sultan Hassanal Bolkiah in Bandar Seri Begawan.
Strengthening strategic ties and emphasizing regional stability
- The PM’s visit marked the first bilateral visit by an Indian Prime Minister to Brunei, although former PM Manmohan Singh visited in 2013 for the ASEAN-India summit.
- The visit underscored Brunei's strategic importance, located at the centre of the ASEAN region and surrounded by key Southeast Asian countries.
- During bilateral talks between India and Brunei, both countries renewed a cooperation agreement in space, with Brunei continuing to host the Indian Space Research Organisation's (ISRO) Telemetry Tracking and Command station.
- The discussions also covered enhancing defence cooperation and exploring long-term partnerships in LNG supplies, as India has shifted its oil imports from Brunei to Russian sources in recent years.
- The China factor:
- While Brunei has historically maintained close defence ties with the United States due to its strategic location, in recent decades, China has become Brunei's largest trading partner and investor, particularly in Belt and Road Initiative projects.
- Bilateral trade between China and Brunei amounts to $2.6 billion.
- In contrast, India-Brunei trade was valued at approximately $286.20 million in 2023.
- PM Modi’s comments also reflected Brunei’s growing unease over Chinese aggression and territorial claims in the South China Sea. He called for giving a ‘strategic direction’ to the India-Brunei partnership, focusing on strengthening defence cooperation, including defence industry partnerships, training, and capacity building.
- The plans for direct flights between India and Brunei, enhancing bilateral connectivity and ties were also announced.
Call for regional code of conduct
- PM Modi called for the finalization of a ‘Code of Conduct’ for the Indo-Pacific, addressing issues of sovereignty and maritime violations.
- The joint statement from both countries urged all parties to resolve disputes peacefully in line with international law, specifically referencing the UN Convention on the Law of the Sea (UNCLOS) 1982, under which Brunei is a claimant state in the South China Sea alongside China, Malaysia, the Philippines, and Vietnam.
Brunei Darussalam
- Location: on the northern coast of Borneo in Southeast Asia, bordered by the South China Sea to the north and surrounded entirely by the Malaysian state of Sarawak.
- Only sovereign state on the island of Borneo, the rest of which is shared by Malaysia and Indonesia.
- Capital: Bandar Seri Begawan.
- Official language: Malay
- Brunei’s economic wealth is driven by its significant petroleum and natural gas reserves, which helped transform it into an industrialized nation. Crude oil and natural gas production account for about 90% of its GDP.
- Brunei ranks ‘very high’ on the Human Development Index (HDI), second only to Singapore among Southeast Asian countries.
- Brunei is also a member of various international organizations, including ASEAN, East Asia Summit and Non-Aligned Movement.
India-Brunei bilateral relations
Political:
- India and Brunei Darussalam established formal diplomatic relations in 1984, soon after Brunei gained full independence.
- Initially, India’s diplomatic presence in Brunei was managed by its High Commission in Kuala Lumpur, Malaysia. This changed in 1993, when India set up its own High Commission in Brunei.
- Brunei opened its resident High Commission in India in 1992.
- India and Brunei share strong political and cultural relations, underscored by their common membership in international organizations such as the United Nations (UN), Non-Aligned Movement (NAM), the Commonwealth, and ASEAN.
- Sultan Haji Hassanal Bolkiah of Brunei has been a strong advocate for closer ties with India and has supported the welfare of the Indian community in Brunei.
- The Brunei government has also been supportive of India's ‘Look East’ and ‘Act East’ policies aimed at deepening engagement with ASEAN nations.
- As the Country Coordinator for India in ASEAN from July 2012 to June 2015, Brunei played a significant role in strengthening India's partnership with ASEAN.
- Additionally, Brunei has been generally supportive of India's candidature in various international organizations.
Strategic relations:
- In 2021, India and Brunei renewed the Memorandum of Understanding (MoU) on Defence Cooperation for another five years, reinforcing their commitment to deepen bilateral defence ties.
- The agreement facilitates regular official-level exchanges, joint training exercises, and participation in defence exhibitions and events hosted by both countries.
- The defence cooperation between India and Brunei has been marked by regular naval visits and joint exercises.
- Indian naval ships have frequently visited Brunei, with their officers participating in regional events like Milan and the Western Pacific Naval Symposium (WPNS).
- Several high-level delegations from both countries have visited to strengthen defence ties.
- Indian Delegations: In 2017, a 16-member delegation from the National Defence College (NDC) visited Brunei.
- Bruneian Delegations: Pehin Haji Awang Abu Bakar, Minister of Home Affairs, attended the First Asian Ministerial Conference on Disaster Risk Reduction (AMCDRR) in 2016.
- A significant component of India-Brunei strategic cooperation is the agreement signed in August 1997 for the establishment of the Indian Space Research Organisation (ISRO)'s Telemetry, Tracking, and Command (TTC) Station in Brunei, operational since 2000.
- This station has played a crucial role in supporting over 35 ISRO missions.
- The latest MoU related to this initiative was signed in July 2018, ensuring continued collaboration in satellite tracking.
- Significance of strategic relation for India:
- Brunei plays pivotal roles in India's broader Indo-Pacific vision.
- India has significant interests in the South China Sea, with approximately 55% of its trade transiting through these contested waters.
- China's growing economic influence allows it to fund various regional projects and extend loans, but China’s assertive actions in the South China Sea have generated regional tensions.
- India, with the support of partners like Brunei, can offer a counterbalance to China's regional dominance and bolster stability in the Indo-Pacific.
- India also aims to leverage Brunei’s potential as part of its China+1 strategy.
- The ‘China+1’ strategy is employed by businesses and nations that have relied extensively on China for manufacturing and supply chain needs.
- This approach focuses on diversifying operations by setting up manufacturing facilities or sourcing from additional countries beyond China, thereby reducing dependency and mitigating risks associated with over-reliance on a single market.
Commercial relations:
- India and Brunei have maintained strong commercial ties, with a diverse range of exports and imports forming the core of their trade relationship.
- India's main exports to Brunei include automobiles, transport equipment, rice, and spices.
- In turn, crude oil remains the primary import from Brunei to India. As of 2023, India's exports to Brunei amounted to $128.2 million, while imports reached $67 million.
- Both countries have actively participated in numerous trade fairs, exhibitions, and virtual meetings aimed at fostering bilateral trade. A notable development was the first Joint Trade Committee meeting held in 2018, which aimed to enhance trade relations between the two nations.
- The Engineering Exports Promotion Council of India (EEPC) also organized a virtual session with Brunei as part of the India-ASEAN Engineering Partnership Summit in August 2021.
- India has extended capacity-building assistance to Brunei under the Indian Technical and Economic Cooperation (ITEC) program, offering two slots annually.
- The collaboration between the two countries also extends to digital solutions and IT sectors. Activ8 BN Digital Solutions, a Bruneian IT company, participated in the Software EPC event held in October 2021, highlighting the potential for growth in technology-driven commercial relations between India and Brunei.
Indian diaspora:
- The Indian presence in Brunei dates back to the discovery of oil in 1929, which brought many Indians to work in the hydrocarbon sector and related services.
- Today, the Indian community in Brunei numbers approximately 14,000, with a significant majority hailing from Tamil Nadu (over 40%).
- The Brunei-India Friendship Association (BIFA), established in 2009, and the Indian Overseas Professionals Network (IPON), launched in December 2021, further enhance community cohesion and professional networking among Indian expatriates in Brunei.
- The Indian diaspora in Brunei is diverse, with a significant number of healthcare professionals, including doctors, nurses, lab technicians, and paramedics, as well as teachers, engineers, IT professionals, and other skilled workers
- The Indian Chamber of Commerce, established in Brunei in July 1972, currently represents over 100 Indian business establishments.
- Humanitarian contributions during the COVID-19 pandemic:
- In response to the second wave of the COVID-19 pandemic in India, the Indian diaspora in Brunei contributed 1,050 cylinders filled with compressed medical oxygen as part of COVID relief efforts.
Challenges:
- Historical neglect: India and Brunei's bilateral relations have historically been limited, with minimal engagement during Narendra Modi's first term (2014-2019). Sultan Hassanal Bolkiah's visit to India was rare, occurring only once to mark ASEAN-India dialogue relations.
- Strategic misalignment:
- India’s focus on expanding its presence in Southeast Asia through its Act East Policy contrasts with Brunei's regional security concerns and its balancing act in foreign policy.
- Brunei maintains close defence relations with Western countries while fostering economic ties with China and its ASEAN maritime neighbours.
- This divergence can complicate efforts to align their strategic goals.
- Limited maritime and defence cooperation: Despite some progress, including joint military exercises and a 2016 defence pact, India-Brunei defence cooperation remains limited due to Brunei's preference for Western military equipment and cautious approach to arms purchases from regional neighbours.
- Economic underperformance: India-Brunei trade is underdeveloped, with significant growth potential in sectors beyond oil and gas, like ICT, finance, and manufacturing. Limited trade agreements and business ventures restrict the potential for a more comprehensive economic partnership and growth.
- Connectivity issues: Limited direct connectivity between India and Brunei impacts business travel and tourism. This poor connectivity restricts people-to-people interactions and investment opportunities, making it difficult for businesses and tourists to engage fully.
- Cultural and language barriers: Cultural and language differences pose challenges to deeper understanding and cooperation between the two countries. These barriers can affect diplomatic interactions and collaborative efforts across various sectors.
- Political and economic uncertainty:
- Brunei's current political stability and economic diversification efforts are key to its future growth.
- While Brunei seeks to reduce its reliance on oil and gas and attract foreign investment, India must demonstrate its reliability as an economic partner, especially after withdrawing from regional trade agreements like the RCEP.
“India and Brunei stand poised for a significant strengthening of bilateral ties. The current climate presents an ideal opportunity for both nations to elevate their relationship to a more prominent position within their respective foreign policies. The leadership of Prime Minister Modi and the Sultan of Brunei will play a crucial role in revitalizing this partnership, fostering deeper and more sustainable engagement.”