India-China tango remains elusive

INDIA-CHINA ties have witnessed a flurry of activity recently. Chinese Vice Foreign Minister Sun Weidong visited New Delhi on June 12-13 for talks with his Indian counterpart Foreign Secretary Vikram Misri. One of the outcomes of the discussions was the announcement that the Kailash Mansarovar Yatra would be resumed this summer. The yatra had been put on hold in the wake of the Line of Actual Control (LAC) standoff that began in the summer of 2020.

Last week, in quick succession, India’s NSA Ajit Doval and Defence Minister Rajnath Singh visited China for meetings of the Shanghai Cooperation Organisation (SCO), of which India has been a long-time member. The Indian leaders also had bilateral meetings with their Chinese counterparts, further adding to the impression in India that there is a reset in the difficult relationship between the two most populous countries.

The Indian media started carrying stories that the Dragon and the Elephant are dancing again. The Indian industry began to believe that imports from China would once again be easy and cheap. This narrative, when seen against the backdrop of India’s Chief Economic Adviser V Anantha Nageswaran strongly arguing in favour of more foreign direct investment from China, is unfortunately leading many in India to hasty and wrong conclusions.

We must keep in mind that the bilateral relationship deteriorated because Beijing sent troops to eastern Ladakh with the aim of changing the status quo on the LAC as well as to drive home the message that China was the big power in the region and that India better kowtow to it. Hence, China is entirely responsible for this recent downturn in relations. Frankly, the onus is on Beijing to make conciliatory moves to repair it. A Chinese saying puts it aptly: “The one who ties the knot must untie it.”

As is well known, there has been disengagement of troops in eastern Ladakh but no de-escalation of forces as yet. So, while some conditions have been met on the LAC for a better relationship, the situation is not exactly as it was before 2020.

In these circumstances, a better description would be that though the Dragon and the Elephant are in the same room, they are sticking to their own individual corners, eyeing the other carefully. Not only is there no question of the two dancing with each other, there is no recognition that the other is even a potential dance partner. Furthermore, there seems to be no attraction between the two.

Things become even clearer if we add to this picture the economic side of the Delhi-Beijing relationship — exports from China of rare earth magnets, so important for our nascent EV (electric vehicle) industry, have virtually been stopped over the past three months. China has reached an agreement with the US, the main target of rare earth export controls, but shipments to India have not been cleared till date, driving India’s EV companies to the brink of a crisis.

Now we hear of similar weaponising of specialty fertiliser exports to India. The supply of tunnel boring machines to India has been blocked by China Customs for over a year. This clearly underlines China’s approach towards India. What China really desires is that India recognise it as a great power and then dance to China’s tune. This is what mandarins in India’s Finance Ministry are acquiescing to when they argue for relaxations in the FDI regime for China.

Yes, in the immediate aftermath of the June 2020 Galwan clash, India had banned many Chinese apps from the domestic market and also ruled that Chinese firms such as Huawei could not participate in our own 5G trials and rollout. All those were excellent steps and any rollback of them cannot be countenanced.

So how should one analyse and assess the current steps? As there has been some thawing of the military situation in eastern Ladakh, although there is no return to status quo ante, repairing and rebuilding overall ties is a good measure. The careful and calibrated moves made by the Indian Government are the correct way forward. Doubtless, we have to deal with China and manage relations. However, there is no need for India to be overenthusiastic in this process. Mutual interest should be the lodestone for deciding the way forward. Mutual respect is essential if ties have to be rebuilt.

At the same time, the Indian industry will be well served if it doesn’t expect everything to be hunky-dory with China in the near future. Such an outcome will be unrealistic and impractical. We in India must utilise this opportunity to manufacture here some of the products denied by China. Rare earth magnets will be a good start. The best supply chain for this product will be if it is entirely in India. Then there can be no surprises of the recent kind.

The broader and more pertinent point is that we must be more ambitious about making in India. To quote a young Indian entrepreneur (not being named) who is now a start-up veteran, “We must aim at manufacturing in India for the world”. It is this ambition that must fire our industry and business people. When that happens, we shall get China off our back and not be dependent on imports from our northern neighbour.

Therefore, please do not expect the Dragon and the Elephant to be dancing anytime soon. In fact, we are merely circling each other, attempting to assess the other’s intentions and designs.

Gautam Bambawale is former Ambassador to China and Trustee, Pune International Centre.

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