India & China: An Incompatible Arranged Marriage
An Incompatible Arranged Marriage
India’s new foreign policy looks East with China’s Belt and Road Initiative (BRI) promising potential economic returns and equal geostrategic challenges
India’s new foreign policy looks east with China’s Belt and Road Initiative (BRI) promising potential economic returns and equal geostrategic challenges
Since he was reelected with a landslide majority as the leader of the world’s largest democracy last May, Indian Prime Minister Narendra Modi has met twice with his Chinese counterpart, President Xi Jinping; just as many times as with Russian President Vladimir Putin. The latest meeting at the G20 summit in Osaka, Japan, led to a trilateral handshake which somehow marked an obsolescence of sorts of the Western liberal order. Held at the behest of Modi himself, the informal meeting paves the way for India’s new “Act East” policy at a golden time for Xi Jinping’s Belt and Road Initiative (BRI). Connecting the countries surrounding India, Beijing’s transcontinental Eurasian integration initiative dovetails with Delhi’s plans to boost ties with its own neighbours but also compromises India’s geopolitical sphere of influence in the region. In the absence of unipolar global leadership, multilayered adversarial fronts dominate international relations. The endless Brexit crisis within the European Union has been competing for column inches with the trade war between the US and China along with the likelihood of a new arms race involving nuclear, space and cyber domains. Meanwhile, the erosion of US-Russia arms control agreements and the withdrawal of the US from the Iran nuclear deal as well as the growing dispute between Saudi Arabia and Iran have added tension to the existing chaos in the world. Lately, Western powers have also shown greater focus on Asia – now rebranded as the Indo-Pacific strategic region occupying most of the Indian Ocean and the Pacific Ocean. In this context, and with no development westward of itself due to its rivalry with Pakistan, Delhi has opted for a new foreign policy grounded on commercial and cultural development with East Asian countries, which involves a revival of India’s relations with its
“The Belt and Road Initiative is an economic cooperation initiative, not a geopolitical or military alliance. It is an open and inclusive process and not about creating exclusive circles or a China club.”
main regional competitor and necessary ally: Beijing. “There is a continuity of India’s policy towards China which began with Rajiv Gandhi and Narasimha Rao. And it is likely to continue because neither of the two want this to break down, although they may not want it to break through either,” explains Chitrapu Uday Bhaskar, director of the Society for Policy Studies in New Delhi and one of India’s leading experts on security and strategic affairs. Labelling China as a “more critical partner for India than even the US”, the retired Commodore refers to the 2017 China–India border standoff to explain bilateral relations between the two leading Asian powers: “After 26
years since the Peace and Tranquillity Agreement, by which both willingly accepted not to take recourse by military force, not a single shot has been fired at the Indo-Chinese border; including during the latest crisis in Doklam (Donglang).” Since he came to power in 2014, Narenda Modi has not deviated from India’s traditional policy towards China: focusing on growing economic, commercial and cultural relations while managing differences on boundary disputes through dialogue and confidence-building measures. But in 2017, the illegal construction of a Chinese road in the Doklam Plateau, near Bhutan, led to a 72-day standoff between Indian
and Chinese troops along the 3,500 kilometres of shared border that both have disputed since a brief but bloody war in 1962. Although the incident did not escalate further, the military tension exposed the fragility of their relations and the looming shadow that Beijing’s infrastructural ambitions poses to Delhi. “India may be reluctant in physical and territorial projects but (it) will be a very keen and useful partner in digital and cultural development,” states Dr Swaran Singh, an expert on diplomacy and disarmament at Jawaharlal Nehru University ( JNU), in New Delhi. Dr Singh, who is also General Secretary at the Indian Congress of Asian & Pacific Studies, saw symbolism in last year’s informal encounter between Modi and Xi Jinping near the Yellow river (which is China’s “mother” river) after the Doklam crisis in Wuhan, as the upcoming bilateral meeting between Modi and Xi Jinping will take place in October in Varanasi, which is watered by the sacred Ganga in India. “Also, (the) last three years have seen an enormous spike in China’s investment in India from about USD688 million in 2016 to almost USD5.6 billion last year,” adds Dr Singh. “Similarly, trade was stuck (around) USD77 billion for almost a decade, but went up to USD95 billion last year and they’ll probably (make) it to USD100 billion in Varanasi, this year.” Although growing at a vastly different pace – China’s GDP was half that of India’s in 1960 but in 2017, China’s GDP was estimated to be USD11.8 trillion or five times that of India’s – China and India’s constant economic growth made them the only emerging nations performing as expected more than a decade since the birth of BRIC (a grouping acronym for Brazil, Russia, India and China, four countries with fast-growing economies in similar stages of economic development). After losing 88 percent of its value, the Goldman Sachs’ investment fund that came up with the acronym folded as India and China rose at a 50 and 80 percent rate, respectively, while Brazil and Russia fell well below expectations.
In addition, the trade between the two largest Asian powers “is unbalanced but important,” says Partha Mukhopadhyay, senior fellow at the Delhi-based Centre for Policy Research and an expert in China–India development. “It’s down from two years ago. It’s remarkable that India’s current merchandise non-fuel (excluding oil and coal) trade deficit with China in 2018–19 – about USD55 billion – is 87 percent of its total merchandise non-fuel trade deficit of USD64 billion.” Beijing’s political centralism has also been replicated by India. Following a first tenure marked by the rise of nationalism, intensifying crackdowns on dissent, growing interference in the judiciary and control over the media, Modi now leads the most homogeneous version of India in decades. In fact, the last general elections washed off the subcontinent’s polychromatic regional identities by painting it with the saffron colour of Hindutva – political Hinduism – while embracing the communist-style cult to the leader in China. Modi’s interest in reinforcing India’s connection with East Asian countries further highlights affinities with Xi Jinping’s infrastructural projects in Southeast Asia via his New Silk Road. Despite similarities, however, tensions will remain as long as Beijing’s ambitions clash with Delhi’s territorial claims and geostrategic interests.
Stalemate in South Asia: The Conflict between India and Pakistan
Modi’s swearing-in ceremony last May did not only reflect India’s new foreign policy but also made evident the deadlock in South Asia due to India’s longstanding conflict with Pakistan. The presence of the leaders of Nepal, Bangladesh, Myanmar, Sri Lanka, Thailand and Bhutan, all state members of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), at the ceremony illustrated the importance of this regional grouping in the eyes of India’s Prime Minister. The signatories of these countries, with the exception of Bhutan and India, also
participated in China’s Belt and Road Initiative (BRI). By contrast, when Modi first took his oath five years ago, he called in the South Asian Association for Regional Cooperation (SAARC), formed by four BIMSTEC states – Bangladesh, Bhutan, Nepal and Sri Lanka – plus Afghanistan, Maldives and Pakistan. With Modi visiting the Maldives right after his re-election and Kabul considered a traditional ally, the message sent to Pakistan was blatantly clear. “In one sense, India’s focus on East Asia has been an ongoing effort since the 1990s. But the recent interest of India in BIMSTEC has a direct correlation to the year 2016, when two major terrorist attacks hit Jammu and Kashmir,” says Dr Singh. Delhi has rejected Islamabad’s calls for dialogue since February 2019, when a suicide bomber killed 40 Indian Army personnel in Pulwama, leading Pakistan and India to the brink of nuclear war. India’s new coercive diplomacy follows Modi’s tit-for-tat policy and seeks to isolate Pakistan after decades of mistrust. “India’s leaders believe they have understood the Pakistani playbook,” wrote Husain Haqqani recently. Pakistan’s former ambassador to the US between 2008 and 2011, Haqqani is also director for South and Central Asia at the Hudson Institute in Washington. Haqqani puts it clearly: “Modi feels he must compel change of behaviour on the part of Pakistan instead of allowing Pakistan to continue to claim parity with India with terrorism as a key tool.” In the last 65 years, the leaders of the two countries have met 45 times and almost all peace processes have ended with either a Pakistani military move in Kashmir – like the one that led to the 1965 war and the 1999 Kargil conflict – or a terrorist attack such as those targeting the Indian Parliament in 2001, Mumbai in 2008 and Pathankot in 2016.
After the 2016 attacks, India and other SAARC states pulled out of the summit that was scheduled to be held in Islamabad. Although the summit has since been scrapped, this Asian grouping was actually already
crippled due to Pakistan’s blockade of regional connectivity projects and similar obstructionist conduct with regards to the South Asian Free Trade Area (SAFTA). Signed in 2004 and effective since 2006, the agreement has been frozen for more than a decade, condemning intraregional trade to a meagre five percent ever since. Hampering over 30 years of SAARC and a dozen of its regional mechanisms, the conflict between India and Pakistan is also deepening the gap between countries in South Asia – “one of the least integrated regions”, according to the World Bank. The stalemate further raises concerns that the China-led Shanghai Cooperation Organisation (SCO) may replace it as many of its members have applied for or already have an observer status in the latter. “China is seen as an alternative port of call and possibly a more dependable one, in terms of execution of projects,” summarises Partha Mukhopadhyay, an expert in China–India development. In the last decade, Beijing has boosted a strong foreign policy based on a revival of its ancient Silk Road via the Belt and Road Initiative (BRI), aiming to connect China with the rest of the world across land and maritime routes. A multi-billion dollar overseas infrastructure investment initiative spearheaded by President Xi Jinping, the mammoth project offers potential economic returns for India but serious geostrategic challenges as well. Starting with a capital of USD100 billion – about half that of the World Bank – China launched the Asian Infrastructure Investment Bank (AIIB) in 2014, in consultation with India, to fund infrastructure building in the Asia-Pacific region. Delhi is the secondlargest stakeholder of this multilateral development bank after Beijing. However, India was absent from the Second Belt and Road Forum (BRF) hosted by China last year for the same reason that it boycotted the inaugural BRF forum