Insider or an Outsider: Where Is the Northeast in India’s Act East Policy?

Abstract

As the Look East Policy has successfully completed two distinct phases and entered into its third phase in the year 2012 under the United Progressive Alliance II regime, the debates continued on the issue of India’s Northeast and its role in this policy. With the change in Union Government in India in 2014 to the National Democratic Alliance II, the Look East Policy found a new vigour with the renaming of it to the Act East Policy. Fresh debates have begun to try to understand the new phase, though most are based on apprehension and speculation in the absence of sufficient policy text. India’s Northeast has barely made any breakthrough, primarily due to the lingering issue of internal security, minimal physical infrastructure and low performing economic institutions like the market.

In labour economics, the insider–outsider theory examines the behaviour of economic agents in markets where some participants have more privileged positions than others. The theory was developed by Assar Lindbeck and Dennis Snower at the beginning of 1984. The objective of economic agents is to find new markets, which need a vibrant exchange of ideas, people and products between players for skill adaptability and competition. The Look East Policy/Act East Policy is one such policy agent, which is the opposite of inward-looking and insularity, and encourages the workforce to take a global perspective and remain an “insider.”