Introduction: History and India’s role in the Indo-Pacific
India wields considerable soft power in the Indo-Pacific region through her historic diaspora communities, most of which date back to Indian merchant settlements in the early medieval period. These people of Indian ethnic origin[1] are citizens of their host nations but have passed their faith, language, script, cuisine, community institutions and culture of India through subsequent generations. In the process, they not only have enriched their new homelands, but also have deepened the connection between their new countries and India through transnational trading and community networks.
In addition to this living legacy, Indian culture is also very much a part of the architectural, social and cultural landscape of most Indo-Pacific nations. For example, the port and city of Banda Aceh, which is located on the northern tip of Sumatra Island (Indonesia), was considered part of the Indian sphere for centuries because of its sizeable Indian merchant community and the fact that it was closer by sea to the Coromandel and Malabar coasts of India than to the rest of the Indonesian archipelago.[2]
India’s influence did not end with the ancient period. It continues to this day. For instance, Islam in South and South East Asia, which was introduced peacefully by Indian Muslim traders during the medieval and early modern periods, is notably more moderate politically than the Islam in West Asia which arrived by the sword.
India’s soft power remains strong because trading communities circulated between the subcontinent and as far as Japan for trade, often maintaining family and community relations back home. Even today, people in Indian overseas business communities like those in East Africa recruit their manpower and find brides and grooms for their sons and daughters from India.
The greatest immigration of Indians across the Indo-Pacific region took place during the European colonial period, when in addition to Indian merchants, Indian laborers[3] known as coolies and more educated Indians were recruited to work in colonial plantation economies and colonial administrations, respectively. But the Government of India has strengthened its latent soft power through targeted diaspora policies since 2014.[4] India’s growing foreign direct investment, infrastructure investments and the presence of Indian companies, have brought to the region an influx of Non-Resident Indians (NRIs) who have revitalized the ties of older Indian diaspora communities with India. Besides helping India restore her historic trading neighborhood, which flourished before colonial intervention shifted its focus to Europe and the Atlantic world, the Indian diaspora communities in the Indo-Pacific could play an important role in efforts by the Quadrilateral Security Dialogue (Quad) countries to counter the hegemonic rise of China in the region.
India’s Indo-Pacific Vision has two main pillars:
1. The central pivot joining the Indian Ocean community to the Pacific community is ASEAN, the multilateral grouping of 10 nations of South East Asia, which form a “geographical and civilizational bridge” between the two Oceans.[5]
2. India sees all littoral and even non-littoral nations as part of a “free, open and inclusive Indo-Pacific,” irrespective of their ideology or form of government.
To put India’s Indo-Pacific Vision[6] in context and explain why it considers its overseas diaspora as having “strategic importance,”[7] this report presents case studies on the role of people of Indian ethnic origin from the Republic of Singapore, Republic of Indonesia, Sultanate of Oman and Republic of Kenya. Each case study is structured in two parts:
1. The history of and degree of cultural salience of citizens of Indian descent in these countries with India.
2. Cross-border FDI, bilateral trade, and whether the Indian diaspora (foreign citizens of Indian descent, Persons of Indian Origin/Overseas Citizen of India card holders and NRIs) are beneficiaries of increased economic interactions.
1. Singapore and its affluent Indian community
Indian migration to Singapore came in three distinct waves.
The initial influx came as Indian administrators, workers, policemen, and soldiers were sent to the newly founded British colony of Singapore after it was acquired by treaty by Sir Stamford Raffles on 6 February 1819.[8] Early Indian immigrants were Chettiars and Telugus from southeastern India, and Sikh and Sindhi traders.[9]
The second wave took place before the founding of Singapore as a nation state in 1965, as families displaced by India’s Partition, particularly Sindhi, Sikh and Punjabi, looked to existing transnational community networks, including the one in Singapore[10] for better opportunities. Due to Singapore’s own complex history regarding nationality and citizenship post-1957 and its brief merger with the Malayan Federation (1963-1965) till independence on 9 August 1965, it thereafter enacted selective and stringent immigration and citizenship laws which dampened immigration. These laws were liberalized greatly after 2000.[11]
A third wave came with India’s economic liberalization after the forex crisis of 1991, which was followed by its Look East Policy (started in 1994 and updated to its Act East policy in 2014), which created opportunities for Singapore’s resident Indian community and led to an influx of Non-Resident Indians. Along the way came the India-Singapore Comprehensive Economic Cooperation Agreement (CECA) of 2005 – the first free trade agreement between Singapore and a South Asian country. Indian migrants came especially from the IT, financial technology, and commercial services (legal, banking and accountancy) sectors, as hundreds of multinational Indian companies opened branches and offices in Singapore in order to access South East Asian markets and the Far East (China, South Korea and Japan).[12] Indian companies and their international partners use Singapore’s International Arbitration Center to resolve legal disputes that arise in India expeditiously.[13]
The flourishing free trade agreement (CECA) between the two countries and its virtuous fallout on the Indian community both in Singapore and India can be gauged from these facts:
| Singapore-to-India trade | $8.68 billion (2020-2021)[14] Trade from Singapore to India increased from 2005 to 2019 since CECA came into force.[15] |
| India-Singapore bilateral trade | $21.98 billion (April 2020 to March 2020) $23.67 billion (April 2019 to March 2020)[16] |
| Singapore’s FDI in India | $8,057 million (April 2021 – updated September 2021)[17]$17,419 million (April 2020 – March 2021) |
| Indian FDI in Singapore | 2019 – S $ 1,590.2 million (in Singapore dollar)[18]2018 – S $ 1,194.1 million(Note: Singapore data is updated only up till 2019. Currency is Singapore dollar.) |
| Singaporean Indian origin citizens | 362,274[19]Citizens of Indian ethnicity represented 7.5% of population in 2020 (7.4% in 2010) |
| Singapore’s Non-Resident Indian population | About 350,000 (making up 21% of Singapore’s expat population of 1.6 million) [20] |
| Highlights of the Singapore Indian diaspora |
|
Singapore’s ethnic Indian population and NRIs are financially influential and have contributed to the booming economic bilateral trade and FDI between the two countries. For Indian companies, Singapore remains the most important global platform for doing business in South East Asia and the Far East (China, South Korea, Japan). Singapore is an important platform for foreign multinational companies to trade with India given the India-Singapore FTA (CECA) and other related bilateral trade treaties.[23] Its importance as a financial center has increased with the political troubles in Hong Kong.
Singapore as a nation is also strategically important for India. It played a key role in connecting India with the ten member ASEAN and in bringing this larger grouping together in the annual East Asia Summit forum.[24]
2. Indonesia: Home to a historic and diverse Indian diaspora
Indonesia is India’s second largest trading partner in the ASEAN region[25] and is home to an historic Indian diaspora. Unfortunately, Indonesia’s Census does not categorize its population on the basis of ethnicity, so it is difficult to get an exact number for people of Indian ethnicity in Indonesia. But India’s two millennia of maritime connections with the islands of Sumatra and Java have resulted in a concentration of people of Indian origin in the western region of the Indonesian archipelago.
Although Indonesians of Indian origin are a minuscule community today and not as visible and influential as the Singaporean Indian community, their historic political, economic, religious and cultural imprint in this region is noteworthy.
India has good reason to consider Indonesia and other ASEAN nations a “geographical and civilizational bridge” to the Far East, a fact mentioned by India’s PM Modi. Numerous Indic and Hinduized kingdoms formed on the islands of Sumatra, Java and Bali (also part of Indonesia), and later in Indochina, due to the influence of Indian merchants,[26] Buddhist monks, Hindu Brahmins, and, during the 10th century, the arrival of the imperial Chola navy to this region. At the time, these coastal trading kingdoms were for India the link between the western and the eastern Indian Ocean.[27] Indian Gujarati and Malabari Muslim traders played a key role in the peaceful conversion of much of Indonesia by the 15th century, when Arabs, Persians and Turks dominated the Indian Ocean trade. The silver Indian rupee circulated amongst multilateral currencies in Indonesian port cities as a currency of trade.
Most people of Indian descent in Indonesia today are descendants of migrants who arrived during the Dutch and British colonial period, primarily during the 19th and early 20th centuries. They arrived for work as plantation workers (Tamilians and Klings),[28] security guards (Sikhs), traders, shopkeepers and native bankers (Tamil Chettiars, Bengalis, Sindhi, and businessmen (from British Bombay, Madras and Gujarat).[29] The Dutch continued the use of the Indian Rupee in its Indonesian colony, but punch marked it to establish their political authority. Use of the Indian currency underscored Indonesia’s economic-cultural proximity to the Indian subcontinent until Indonesia became independent from colonial rule in 1948, after which it adopted its own currency named after the Indian Rupee – the Indonesian Rupiah.
Though Indonesian Indians were once predominantly rural, the occupational profile has now changed, as most of them now reside in urban centers.
| Indonesia-India bilateral trade | $17.50 billion (2020-2021),[30] up from $4.3 billion (2005-2006)[31][32] |
| Indian FDI in Indonesia | $995.18 million in 2215 project (2000-2018).[33] Because most Indian FDI is routed through Singapore and other gateways, it is likely that the amount of FDI is higher |
| Indonesians of Indian ethnicity and NRIs | About 120,000 (as of 2018), who are concentrated in Greater Jakarta, Medan, Surabaya and Bandung. 8500 are NRIs and 111,500 are Indonesians of Indian descent.[34]*The Indonesian Census no longer lists ethnicities as a category. |
| Highlights of the Indonesian Indian Diaspora |
|
3. Oman and its valued Omani Indian citizenry
The Sultanate of Oman has just 2911 citizens of Indian origin. Most of these belong to families with roots in Oman that go back to the 19th century. In fact, it was in 1832-1840 that the famous Hindu Bhatia trader Sewjee Topan advised the then Omani Sultan to shift his capital to Zanzibar in order to tighten his control of the slave and ivory trade in his East African dominions. Kutchi traders from the Bhatia, Bohra, Khoja, and Memon communities of western India followed in the wake of this shift to the new capital in Zanzibar. Indian merchants were the Sultan’s collaborators along with local Swahili-speaking Arabs.
Today, people of Indian ethnicity in Oman are either families with roots in Zanzibar who speak Swahili, or descendants of people with links to Oman. The Sultan of Oman values his Omani-Indian citizenry and, although Oman is an orthodox Ibadhi Muslim state, has always been religiously tolerant of the country’s Indian-origin citizens, allowing them to build temples and gurdwaras, maintain cremation grounds, and set-up their own social, educational and community institutions. It is because the Omani Sultans have historically valued their Indian advisors that India’s soft power in the Omani kingdom is not just positive but politically and economically significant.
| Oman-India bilateral trade | $4.6 billion (April 2020 to February 2021)$5.93 billion (2019-2020)[36][37] |
| Indian FDI in Oman | $7.5 billion invested in more than 4100 Indian businesses across Oman. |
| Oman FDI in India | Special Purpose Vehicle Fund (Indian-Omani joint venture) has invested $100 million since 2011 in India in seven diversified Indian companies. It currently is investing a second tranche of $220 million. |
| Persons of Indian Origin and NRIs | Omani-Indian citizens 2911 (July 2020)NRI about 624,000 (May 2021)[38] |
| Highlights of the Omani Indian Diaspora |
|
4. Kenya: Indians’ role in building modern Kenya
Britain’s takeover of the assets of the Imperial British East Africa Company in Kenya in 1894 triggered the movement of Indian merchants from a declining Zanzibar economy to new opportunities in Kenya.[39] The migrants included legendary Zanzibar trader Seth Allidina Visram, who was a mentor to the founders of the famous Kenya-Uganda Mehta and Madhvani business families, amongst many other Indian businessmen in East Africa.
Visram was the biggest Dukkawala (a term used by Kenyans to describe Indians) or shopkeeper, as he opened shops as soon as each stretch of tracks was laid for the Uganda Railway line from the port of Mombasa to Kisumu (Port Florence on Lake Victoria).
This railway line was built by Indian indentured labour (most of whom returned home after their contracts). Its construction also attracted Indian staff to man this railway line as well as administrative, police and security staff to run the new colony. Kenyan Indians are largely descendants of these colonial migrants. Kenyan Indians consider themselves Kenyans first. Many prominent Kenyan Indians fought for Kenya’s freedom from British rule.
After Kenya became independent in 1963, Indian businessmen turned from the colonial plantation economy built on sugar, cotton, and tea to setting up industries. A wave of Africanization that swept through Kenya in the 1970s-1980s disrupted this process and resulted in the nationalization of Indian-owned businesses. Many Kenyan Indians fled to the UK, Canada and USA during this period.
Since the 1990s, the Kenyan government has actively encouraged the return of this business community. Many have restarted their businesses, which triggered a new migration of Indians to Kenya to work in them. Today, Kenyan Indians are an economically strong business community, with solid business and family connections to India. This, combined with India’s development aid and the opening of new Indian companies’ operations in the African country, has created more jobs for Kenyans and increased India’s soft power.
| Kenya-India bilateral trade | $2.2158 billion (2019-2020)[40] |
| Indian FDI in Kenya | More than $3 billion (2018)[41] |
| Persons of Indian Origin and NRIs | 60,000 Kenyans of Indian ethnicities20,000 NRIs |
| Highlights of the Kenyan Indian diaspora |
|
Conclusion
These four case studies demonstrate that India’s foreign policy is astute in viewing its Indian overseas communities as a “strategic” soft power. It secures India’s overseas development aid and FDI in a way that both sides benefit.
Diaspora engagements can also can be a bulwark to India’s foreign policy; indeed, the more influential the Indian Diaspora – as in the case of Singapore and Oman – the greater the impact of Indian foreign policy in these countries.
India owes the strength of this soft power partly to its culture of strong family ties, which have led its migrants to maintain enduring connections back home.[42] The durability of Indian overseas communities arises because most of their population emigrated because of opportunities overseas, not because they were forced to; Indian indentured labour largely returned to India.
However, India’s engagement with its diaspora needs to be sensitive and its expectations tempered with realism, as foreign citizens of Indian ethnicity and mixed descent identify themselves more with their host countries. The opportunities to engage with these communities is more in the sphere of soft diplomacy like education, tourism and religious pilgrimages. In the spheres of trade and industry, foreign citizens of Indian ethnicity are a bridge to understanding local ethos and could be more open to doing business with Indian companies or inducting Indian technology into their manufacturing units.
Given the advantages of India’s 32-million strong diaspora,[43] many of whom are located in the Indo-Pacific countries, India is well positioned to play a constructive role in this increasingly important and contested region
Sifra Lentin is Fellow, Bombay History, Gateway House.
This paper has been published by Gateway House, with the support of the United States Embassy, New Delhi. Read the full compendium ‘India in the Indo-Pacific: Pursuing Prosperity and Security’ here.
The views and opinions expressed in this paper are solely those of the authors. The views expressed in the paper do not necessarily reflect those of the United States Embassy, New Delhi.
For interview requests with the authors, or for permission to republish, please contact outreach@gatewayhouse.in.
© Copyright 2022 Gateway House: Indian Council on Global Relations. All rights reserved. Any unauthorized copying or reproduction is strictly prohibited.
References:
[1]This generalized term is being used rather than Person of Indian Origin (PIO) because the Government of India today issues a PIO Card to foreign citizens of Indian ethnic descent going back three generations and their spouses, which enable certain rights like the ownership of property in India with the exception of agricultural property/plantation properties. https://www.mea.gov.in/Portal/CountryQuickLink/703_PIO-OCI.pdf (Accessed on 19 December 2021)
[2]The Indic influence is most evident in the Indonesian islands of Sumatra and Java, the westernmost part of the Republic of Indonesia. On the island of Java, the UNESCO heritage sites of the Buddhist temple complex of Borobudur and the Hindu temple complex of Prambanan, are both located.
[3] When the slave trade was finally abolished in 1873, colonial powers resorted to recruiting indentured labourers from India to work in plantation economies in their colonies. Though many indentured labourers did return home to India, many families also stayed behind.
[4] There was a sea change in the GOI policy following the release of the report of the Singhvi High-Level Committee on 8 January 2002.
The GOI measures taken for the welfare of the diaspora include i) Annual Observance of 9 January, the day of Mahatma Gandhi’s return to India from South Africa in 1915, as the Pravasi Bharatiya Divas, ii) periodic celebration of Regional Pravasi Bharatiya Divas in foreign countries and iii) Establishment of the Pravasi Bharatiya Kendra in New Delhi (foundation stone was laid by Prime Minister Manmohan Singh in 2011; its inauguration by Prime Minister Narendra Modi took place in October 2016; and it was renamed as Sushma Swaraj Bhavan in February 2020), iv) Pravasi Bharatiya Samman Award (PBSA), launched in 2009, v) Overseas Citizenship of India Scheme, launched in 2006 and vi) Know India Programme
Bhatia, Rajiv, ‘Sociocultural and people-related bonds’ in India-Africa Relations: Changing Horizons, Routledge, 2022. P. 162
[5] Keynote Address by Secretary (East) at the Special Session of the 1st edition of the Indo-Pacific Business Summit on 6 July 2021 details India’s Indo-Pacific vision. https://mea.gov.in/Speeches-Statements.htm?dtl/33982/Keynote_Address_by_Secretary_East_at_the_Special_Session_of_the_1st_edition_of_the_IndoPacific_Business_Summit (accessed 9 December 2021)
[6] PM Narendra Modi detailed India’s Indo-Pacific vision for the first time in his speech at the Shangri La Dialogue on 1 June 2018. https://www.mea.gov.in/Speeches-Statements.htm?dtl/29943/Prime+Ministers+Keynote+Address+at+Shangri+La+Dialogue+June+01+2018 (Accessed on 9 December 2021)
[7] See interview with External Affairs Minister S. Jaishankar posted on the MEA website https://www.youtube.com/watch?v=vynQj2sm8Mw&t=2s
[8] This was the strategy used by the English East India company and the British Raj thereafter, when colonizing new regions in the Indian Ocean Region.
See Bose, Sugato, A Hundred Horizons: The Indian Ocean in the Age of Global Empires (Boston, Harvard University Press, 2006)
[9] Chettiar merchants were also astute bankers and moneylenders, as were the Sindhi businessmen. They provided financial services to locals and well as foreign trade, and took the many opportunities that came their way in interregional trade.
[10] Bhattacharya, Jayati, Beyond the Myth: Indian Business Communities in Singapore (Singapore, Institute of South East Asian Studies, 2011)
[11]This report is specifically on the evolution of post-colonial citizenship rules and laws in Malaysia and Singapore.https://cadmus.eui.eu/bitstream/handle/1814/45371/GLOBALCIT_CR_2017_03.pdf?sequence=1&isAllowed=y (Accessed on 22 December 2021). Also see: An overview of immigration policy in the years after 1965: https://www.asianstudies.org/publications/eaa/archives/singapore-immigration-and-changing-public-policies/
[12] See interview with External Affairs Minister S. Jaishankar posted on the MEA website https://www.youtube.com/watch?v=vynQj2sm8Mw&t=2s
[13] A recent, high profile case which came before the Singapore International Arbitration Center (SIAC) is the Future Retail and Amazon dispute. The agreement between the two parties had an arbitration clause specifying SIAC as the arbitration center. The SIAC ruled in favour of Amazon.
[14] https://commerce.gov.in/about-us/divisions/foreign-trade-territorial-division/foreign-trade-asean/ (Accessed on 21 December 2021)
[15]mti.gov.sg/Improving-Trade/Free-Trade-Agreements/CECA
[16] https://mea.gov.in/Portal/ForeignRelation/Singapore_24_12_2018.pdf
[17]Source: https://dpiit.gov.in/sites/default/files/FDI_Factsheet_Spetember-21.pdf
https://dpiit.gov.in/sites/default/files/FDI_Fact_sheet_September_20.pdf
[18] Source: https://tablebuilder.singstat.gov.sg/table/TS/M083901
[19]Singapore Census 2020. (Accessed on 30 November 2021) https://www.singstat.gov.sg/-/media/files/publications/cop2020/sr1/cop2020sr1.pdf
[21] Ibid.
[22] At #14 Raj Kumar & Kishin R.K ($2.65 billion), #18 Arvind Tiku ($2.2 billion), #28 Asok Kumar Hiranandani ($1.6 billion), #36 Binny Bansal ($1.25 billion), and # 50 Saurabh Mittal ($735 million). https://www.forbes.com/singapore-billionaires/list/#tab:overall
[23] MEA bilateral brief on Singapore. https://mea.gov.in/Portal/ForeignRelation/Singapore_24_12_2018.pdf
[24] See interview with External Affairs Minister S. Jaishankar posted on the MEA website https://www.youtube.com/watch?v=vynQj2sm8Mw&t=2s
[25] https://commerce.gov.in/about-us/divisions/foreign-trade-territorial-division/foreign-trade-asean/ Also: http://www.mea.gov.in/Portal/ForeignRelation/Feb_2020_Bilateral_Brief_INDONESIA.pdf
[26] Indian merchant communities from east and south east India settled on the western islands (Sumatra and Java) because of an active trade in gold, textiles and spices.
[27] For a discussion on coastal kingdoms in Indonesia and the intersection of trade and state-formation, see Ashin Das Gupta, ‘The Maritime Trade of Indonesia: 1500-1800’, in India and the Indian Ocean, edited by Michael Pearson and Arun Das Gupta (Calcutta, Oxford University Press, 1987).
[28] This is a reference to people to Kalinga or the region of the state of Odisha, that is people of Oriyan descent.
[29] A. Mani, ‘Indians in North Sumatra’, Indian Communities in Southeast Asia, edited by K.S. Sandhu and A. Mani (Singapore, Times Academic Press, 1993), pp. 58-60.
[30] https://commerce.gov.in/about-us/divisions/foreign-trade-territorial-division/foreign-trade-asean/
[31]http://www.mea.gov.in/Portal/ForeignRelation/Feb_2020_Bilateral_Brief_INDONESIA.pdf
[32]India is the second largest buyer of coal and crude palm oil from Indonesia and imports minerals, rubber, pulp and paper and hydrocarbons reserves. India exports refined petroleum products, commercial vehicles, telecommunication equipment, agriculture commodities, bovine meat, steel products and plastics to Indonesia.
[33] Ibid.
[34] https://mea.gov.in/images/attach/NRIs-and-PIOs_1.pdf (Accessed on 9.11.21)
[35] Pallavi Aiyar, “Sindhi kings of Indonesian entertainment” , The Hindu (24 August 2013) https://web.archive.org/web/20140620123008/
http://www.thehindu.com/todays-paper/tp-opinion/sindhi-kings-of-indonesian-entertainment/article5054226.ece
[36] https://www.indemb-oman.gov.in/page/bilateral/ Also, https://commerce.gov.in/about-us/divisions/foreign-trade-territorial-division/foreign-trade-wana/
[37] Major items of Indian exports are mineral fuels and products of their distillation, textiles, machinery, electrical items, chemicals, iron and steel, tea, coffee, spices, rice, meat products and seafood. Among major Indian imports are: urea, LNG, polypropylene, lubricating oil, dates and chromite ore.
[38] https://www.indemb-oman.gov.in/page/bilateral/ (Accessed on 9.11.21)
[39] Neighbouring Uganda became a British colony in 1895.
[40] High Commission of India, Nairobi; https://hcinairobi.gov.in/eoinrb_pages/MzI
[41]Article of 2018 by previous Indian High Commissioner. https://hcinairobi.gov.in/public_files/assets/pdf/The_Star_Aug22_18.pdf
[42]See interview with External Affairs Minister S. Jaishankar posted on the MEA website https://www.youtube.com/watch?v=vynQj2sm8Mw&t=2s
[43] This includes the NRI and PIO population. On an average 2.5 million Indians migrate overseas annually. https://mea.gov.in/images/attach/NRIs-and-PIOs_1.pdf
(Accessed on 21 December 2021).