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Critique of India's Act East Policy Implementation

Published July 10, 2026 at 10:34 PM UTC

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While Prime Minister Narendra Modi's three-nation tour, including the visit to New Zealand, is presented as a strategic initiative to bolster India's Act East Policy, several challenges and concerns merit consideration.

**Trade Imbalances and Economic Concerns**

Despite the signing of the India-New Zealand Free Trade Agreement (FTA) in April 2026, India's trade deficit with New Zealand in fiscal year 2026 indicates underlying economic challenges. The FTA's effectiveness in addressing these imbalances remains to be seen, and there are concerns about its potential impact on domestic industries. The combined share of Indonesia, Australia, and New Zealand in India's total Foreign Direct Investment (FDI) equity inflows being just 0.39% in fiscal year 2026 suggests that the anticipated economic benefits may not materialize as expected.

**Strategic Partnerships and Regional Dynamics**

The emphasis on defense and maritime security cooperation, particularly in Australia and Indonesia, raises questions about the strategic objectives of India's Act East Policy. The potential sale of BrahMos missiles to Indonesia and the focus on critical minerals in Australia could lead to regional tensions and may not align with India's broader goals for peaceful regional cooperation.