Engage with China
Ravi Bhootalingam’s “Why China matters” and “India and China: Compete and cooperate” (May 2 and 3) have set out a compelling rationale for increasing economic engagement by India with China. That China could soon become the world’s largest market since its middle class is set to double from 400 million to 800 million in the next four years is in itself a huge reason why India must aspire for a greater foothold in that market. If India is serious about getting its Make in India strategy off the ground and in transforming its manufacturing sector into an engine of growth and employment creation, not only would Indian goods and services have to carve out a bigger niche in the Chinese market, but India would also need higher Chinese investments in our infrastructure sector. Such investments would help offset India’s balance of payments deficit with China.
India’s policymakers need to be alive to the fact that the US is a waning superpower and with President Donald Trump in command, it is becoming increasingly protectionist. Moreover, India does not appear to feature as a priority in America’s foreign policy based on statements emanating from Washington DC in the last four months. While it is a fact that India has serious disagreements with China in the political sphere, be it on Arunachal Pradesh, Aksai Chin, in China’s persistent opposition to India joining the nuclear high table and its huge role in bolstering Pakistan’s armed forces, this by itself should not come in the way of greater economic engagement with China. If countries such as the US and Japan, who have equally contentious political issues, can continue to have deep economic relationships with China, there is no reason why India should not take steps to significantly increase trade and investment with China. Bhootalingam rightly suggests that India must consider getting involved in the One Belt One Road initiative of China because of the huge benefits in terms of access to new markets and global supply chains, which would also boost “Make in India”. Greater economic inter-dependence between India and China could add to India’s ability to negotiate favourable terms in the settlement of outstanding political issues with China.
While Indian policymakers must continue to upgrade India’s defence preparedness vis-à-vis China, steps must be taken to greatly increase economic ties with China through higher exports and imports, investments, joint initiatives in R&D to combat common problems such as desertification and water scarcity, creation of MNCs that combine Chinese capital with Indian managerial and technical expertise, and by leveraging India’s higher education system to attract more Chinese students.
Srijit Basu Gurgaon