INDIA IN TRANSITION. Combining cooperation with competition

RUPAKJYOTI BORAH

The Wuhan Summit between India and China has to be seen in the backdrop of wider developments in the Indo-Pacific region. It is important that New Delhi and Beijing are able to manage their differences, as both of them need to concentrate on their economic development. New Delhi would do well to cooperate with Beijing in areas of convergence, while not lowering the guard on the border.

When Prime Minister Narendra Modi met President Xi Jinping of China in Wuhan on April 27-28 for an informal summit, it caught observers in both countries and the rest of the world by surprise. In the run-up to the Summit, the two neighbours had been locked in a series of spats both on the bilateral and multilateral fronts.

New Delhi has not joined the China-led “One Belt One Road” (OBOR) initiative (also known as the Belt and Road initiative) owing to concerns about violation of its sovereignty in Jammu and Kashmir in the case of the China-Pakistan Economic Corridor (CPEC). The $46-billion CPEC aims to connect Gwadar on Pakistan’s Arabian Sea coast to Kashgar in the Xinjiang province in western China. A Ministry of External Affairs release about the OBOR noted that “we are of firm belief that connectivity initiatives must be based on universally recognised international norms, good governance, rule of law, openness, transparency and equality, and must be pursued in a manner that respects sovereignty and territorial integrity.”

The OBOR is in many ways a re-invention of the ancient Chinese Silk Road, which ran from China to Europe and branched off to various countries including India. Apart from the “Maritime Silk Road,” the other element of the “One Belt One Road” is the “Silk Road Economic Belt,” through which China is trying to build land connectivity through the Central Asian countries to Europe. One of Beijing’s main reasons behind the OBOR push is its gargantuan appetite for energy, which has seen it import energy resources from various parts of the world. Beijing has been slowly but steadily trying to assert its presence in the Indian Ocean and beyond.

The two countries had been locked in a stalemate last year when Chinese forces started constructing a road in the Doklam region in Bhutan (in territory claimed by China) and India objected. Fortunately, the two sides pulled back their troops just before Modi travelled to China for the BRICS Summit in Xiamen in early September 2017.

Post Doklam

However, although the Doklam crisis has been resolved, we may see more assertive Chinese presence/patrolling on the Sino-Indian border as Beijing tests both Indian defenses and its resolve. There have also been some instances of transgression by Chinese soldiers in the aftermath of Doklam. Besides, China seems to be on a charm offensive with Bhutan. Chinese Vice-Foreign Minister Kong Xuanyou visited Bhutan earlier this year and was accompanied by the Chinese Ambassador to India.

Once again (as in the past), Australia, India, Japan. and the US have revived the Quadrilateral Initiative (also known as the Quad), which in 2007, had to be rescinded due to Beijing’s protest. India has always been the resident power in the Indian Ocean region with the sole exception of the US. Its Navy has had a commanding presence in the region between the Strait of Hormuz and the Strait of Malacca while its Andaman and Nicobar chain of islands lies at the entrance of the Strait of Malacca. The setting up of a tri-services command by India in the Andaman and Nicobar islands gives it an unmatched reach in the region.

Influence in Indian Ocean

However, as seen in China’s setting up of a base in Djibouti, it seems to be in no mood to leave the Indian Ocean solely to India. Beijing is also increasing its presence in the Gulf region and in Africa. The Gulf region is home to a huge Indian Diaspora and New Delhi has always had the upper hand in the region.

However, India has been unwittingly sucked into the spat between the US and Iran, while China has indicated that it would not heed US calls to halt Iranian oil imports. New Delhi is also worried about Beijing’s so-called “string of pearls” strategy under which it has already helped construct ports and port facilities at Gwadar in Pakistan, Hambantota in Sri Lanka, Chittagong in Bangladesh, and Kyaukpyu in Myanmar.

India reels under a huge trade deficit when it comes to bilateral trade with China and it shows no signs of abating. In 2017, though the total trade between India and China reached a historic high of $84.44 billion, the trade deficit has also ballooned to $51.75 billion (in China’s favour).

India’s options

The External Affairs Ministry’s statement about the Wuhan Summit notes that the two leaders “issued strategic guidance to their respective militaries to strengthen communication in order to build trust and mutual understanding and enhance predictability and effectiveness in the management of border affairs.”

After the Wuhan Summit, Beijing also announced it would be slashing tariffs on 28 medicines, including cancer drugs from India, though it received a lukewarm response from Indian pharmaceutical companies since it takes a long time for such Indian companies to enter the Chinese market after prolonged field trials and approvals.

However, it would be premature to expect India-China relations to improve dramatically after the Wuhan Summit. There are still lots of issues in which the two sides do not see eye-to-see. At his keynote speech in this year’s Shangri-La Dialogue in Singapore in early June, Modi noted — in an oblique reference to Beijing’s growing assertiveness in the region — that “we should all have equal access as a right under international law to the use of common spaces on sea and in the air that would require freedom of navigation, unimpeded commerce, and peaceful settlement of disputes in accordance with international law.”

Additionally, China’s “all-weather friendship” with Pakistan is worrisome for India, especially given the fact that Beijing has been alleged to supply nuclear and missile know-how to Pakistan. Beijing has also repeatedly blocked India’s bid for membership of the Nuclear Suppliers’ Group (NSG) and seems to be unwilling to relent on this front.

It seems that for the foreseeable future, Sino-Indian relations will be a mix of competition and cooperation. However, as Modi noted in the same Shangri-La Dialogue keynote address, “competition (in Asia) is normal. But contests must not turn into conflict; differences must not be allowed to become disputes.”

New Delhi would, therefore, do well to keep politics and economics apart. While on the economic front, it ought to reduce the huge trade deficit with China, it could actually benefit from Chinese investment in the infrastructure sector.

However, at the same, it needs to develop a coherent policy to deal with China’s growing presence in its immediate neighbourhood. It should use multilateral forums like the BRICS and AIIB (where both are members) as leverage when things get hot with China. On the border too, New Delhi needs to have a Standard Operating Procedure (SOP) in place the next time Chinese troops transgress the border. As they say, eternal vigilance is the price of peace.

The writer is with the Institute of South Asian Studies at the National University of Singapore. The article is by special arrangement with the Centre for Advanced Study of India, University of Pennsylvania.