The meeting between Prime Minister Narendra Modi and Chinese President Xi Jinping on the sidelines of the BRICS summit in Russia was timely for bilateral relations and sensitive to the uncertainties of the global geopolitical landscape. Painstaking official negotiations over months resulted in an agreement on outstanding issues from the 2020 military clashes in Ladakh, which cleared the ground for the two leaders to meet.
There have been pressures in recent months from our business community to lift restrictions on inflows of Chinese technical personnel and equipment that were increasing their costs. Various public diplomacy arms of the Chinese government approached our governmental and non-governmental institutions with the same message. Sections of our economic establishment worried about the impact of exaggerated national security concerns on our growth.
The political leadership was vindicated in its conviction that it would be a strategic mistake if major transgressions of understandings on the Line of Actual Control went unrectified, even if it involved some economic sacrifice. The Indian and Chinese special representatives have been instructed to “explore a fair, reasonable and mutually-acceptable solution to the boundary question.”
In the current state of the bilateral relationship and the broader international climate, it is unlikely that much progress can be made in the near term on this ambitious agenda. The special representatives could be more realistically expected to evolve and monitor effective border management mechanisms to maintain peace and tranquillity along the LAC.
From a political perspective, a resumption of this top-level dialogue should be welcomed. As two large neighbours with ambitious aspirations for regional and global influence, competition and collaboration will necessarily be called for on bilateral and multilateral issues.
The absence of dialogue at the top level opens up increased space to play one against the other, not only for our neighbours, but also our friends who have joined with us to meet the many strategic challenges from China and whose interests are best served by unremitting hostility between India and China.
We should recognise, however, that this rapprochement does not resolve the core issues between India and China. China will continue to be active in our neighbourhood in a manner inimical to our interests. Its activities in the Indian Ocean and our continental Eurasian flank will continue to impinge on India’s economic and security interests. The strategic rivalry will not subside. One can only strive to create guardrails to prevent it from spilling out into confrontation, as it has done in the past.
For over a decade now, India has sought to address the widening gap in the comprehensive national strengths of the two countries by a mix of domestic economic, technology and military capacity-building and an external balancing strategy based on close partnership with the US, its allies and partners in the eastern and western Indian Ocean, as well as other traditional partners in the Eurasian region.
For a level of equilibrium to be achieved in the rivalry, we need to redouble our national efforts towards achieving at least near-parity in comprehensive national strengths in the shortest possible timeframe. The current rapprochement should not obscure the larger goal.
In the economic sphere, the argument that excessive restrictions on engagement would impact our growth trajectory is valid. Equally, the engagement has to be regulated to protect national security and long-term economic interests.
Even with the various restraints on Chinese inward investment and encouragement of import substitution, China remains India’s top source of imports, which continue to rise inexorably. Nearly all our imports from China are industrial goods. The increasing influx of Chinese firms into India, which will source most of their requirements from China, is adding to the imports. US tariff hikes on Chinese products are encouraging their dumping in India.
Opening up trade with China should not slow our domestic efforts to reduce our dependence on China for critical industrial products. Traders who agitate against anti-dumping duties on below-cost Chinese exports are, in effect, retarding our import substitution efforts. There has to be a calibrated trade-off between short-term gains and long-term priorities. The India-China rapprochement should also be seen in the backdrop of the current global geopolitical flux.
As the Russia-Ukraine conflict drags on, many policymakers in the US and Europe are gearing up for a negotiated termination soon after a new administration takes office in Washington, regardless of who wins the presidential elections. There are extraordinarily complex interests involved and a multiplicity of stakeholders. Efforts for a settlement with some sort of a ‘win-win’ outcome for major stakeholders could be tortuous, with unpredictable consequences for Eurasian security.
In West Asia too, a denouement has to emerge after the US elections to end the ongoing carnage. The guiding US hand will be either a Democratic administration, which has so far had no success in restraining its ally’s military campaign, or a Republican one, which stands four-square behind Israel. US allies like Saudi Arabia, UAE and Jordan remain petrified about the prospects of a wider conflagration. It is difficult to imagine a solution which will not be messy.
These concerns moved the diverse group of countries from across continents, regions and political systems that assembled in Russia during the BRICS summit. They ignored the Western narrative that BRICS is a China-Russia construct to challenge the West-led global order, or the myth of Russia’s international isolation that had to be kept intact. Some were hedging their political bets in the near term; others were looking for longer-term insurance against threats from the global financial architecture.
The probable return of Donald Trump to the White House has naturally animated conversations about its impact on these international upheavals. The strongest change in US behaviour may be towards China. It was Trump who decisively shifted US strategic attention to China in his first term. He now promises to do more, and more harshly.
The Trump agenda has no patience with blending cooperation with competition. It advocates total strategic decoupling from China—inter alia, zero dependence on Chinese supply chains, expanding tariffs to all Chinese products, denying visas to Chinese students and researchers, and withdrawing accreditation to American universities receiving grants from China.
To add insult to the other injuries, a congressional enquiry could investigate the hypothesis that the coronavirus originated in a Wuhan lab and, if proven, levy trillions of dollars of damages on China. Even if only some of these measures are initiated, China should have its hands full with its principal adversary. Global governance structures will also be shaken. India and China will have more to think about than their rivalry.
P S Raghavan
Distinguished Fellow, Vivekananda International Foundation and a former diplomat