Image Courtesy: Tribune India
Article: 47/2024
There has been a thaw in the bilateral relations between the two Asian powers is indeed long-awaited and most welcome. After a gap of nearly five years, the Indian Army exchanged sweets with its counterparts on the eve of Diwali. There could have been no better sweet news than this development that belied expectations after the four hard winters when the two forces clashed at the border. It is evident that there was a determined bid to resolve the vexed border issues amicably before the possible meeting of the two leaders at Kazan for BRICS. The success of BRICS also depended on the two leaders being able to work together to expand the membership of BRICS and to provide alternate avenues for growth and development to aspiring developing nations.
Over a total of fifty meetings took place both at the diplomatic and military level in the last five years is indicative of the complexities involved in resolving a situation created by the unilateral action of the PLA despite many agreements related to maintaining tranquility along the border being violated in letter and spirit has never been in question. Enough ice melted in the Himalayan glaciers in the last four winters before this thaw before the Kazan meeting. Both sides need to be complimented for the sustained efforts to resolve the issue and move forward.
It is obvious that there were both external and domestic compulsions of the day that drove both countries to work on at least restoring the status quo that existed prior to Galwan. While this should have been a simple task, given that the only demand from India was that the status quo be restored, the agreement now clearly illustrates how difficult it is to get the Chinese to get back to where they were in April 2020. As far as the borders are concerned, there are still issues to be resolved on border patrols, buffer zones and modalities for de-escalation.
Without going into the complete details of external and internal factors that contributed to the success of diplomacy, some headings are important to understand the dynamics of global developments.
On the ground, war was not an option and this was reiterated by the Indian PM on many occasions though it was aimed at the Russo-Ukrainian war and developments in the Middle East. Having stabilized GDP growth of about 7 percent, India as one of the fastest growing economies could not afford a war. The lessons from the long-drawn Ukraine war could hardly be ignored. The war had already tested global institutions and the sanctions regime against Russia only complicated matters for global players knowing fully well the extent of interdependency on global supply chains. Despite the standoff, the economy of both China and India depended on supporting each other for sustained growth. The balance of trade by and large stood close to 100+ billion USD despite various measures by India to de-risk the supply chains. The term itself changed the nomenclature from decoupling to derisking indicating how interdependent global economic systems were and that no decoupling can be a full success. However, such efforts to move things away from China and find alternate sources did send a clear signal to Beijing that the global powers are united in moving away from total dependence on PRC which cashed on its ability to be the global manufacturing hub. Many companies moved away from China and relocated alarming the leadership in Beijing which was also facing acute domestic challenges of stock markets, real estate, unemployment, urban-rural divide, and the risk of isolation from the global system in the long run.
China also faced issues of tariffs and other WTO issues that made it clear that China needs to protect its market share and the ability to wield influence globally. The BRI suffered significant setbacks and even the just concluded BRICS made it clear that even a major partner Brazil was not going to endorse the BRI. China itself which faced setbacks in many countries and notably in Pakistan along the CPoKEC had already reviewed its financial outlays in many destinations.
Not to forget the China+1 strategy. Over the past five years, a significant shift has reshaped global manufacturing dynamics, with leading multinational companies, such as Apple, reassessing their dependency on China—a country long recognized as the “world’s factory.” The movement to diversify production locations, often termed as "de-risking," has gained momentum. A 2023 survey by the Boston Consulting Group revealed that over 90% of North American manufacturers have partially or fully relocated operations to alternative markets, notably Mexico, Thailand, and Vietnam, indicating a gradual move away from China.
India has emerged as a particularly compelling option within this restructured landscape, largely due to its substantial domestic consumer base, which makes it an attractive destination for foreign investments. In the electronics sector, India’s expanding smartphone manufacturing and assembly ecosystem reflects this interest. The government’s Production Linked Incentive (PLI) scheme—offering a range of benefits, including tax breaks and subsidies—further incentivizes companies to establish a presence in India. Additionally, the nation’s rising smartphone demand bolsters its appeal as a manufacturing hub, aligning India as a viable and strategic alternative for companies seeking to reduce supply chain risks. At the strategic level, the aggressive actions of China in the Indo-Pacific against its weaker neighbors led to the US revisiting its Asia-Pacific policy and embracing the Indo-Pacific policy. The QUAD which was virtually defunct got a fresh lease of life thanks to China’s actions and Beijing can blame itself for the success of this alliance though not focused on the military dimensions. The IPOI and IPEF have paid rich dividends to the partnering nations and have opened up new vistas in terms of accrual of partnership benefits. China which initially responded to the QUAD initiative by saying it would vanish like the ocean froth suddenly felt concerned about the potential of the partnership to affect its own time-bound ambitions as it marches towards the centenary of the CPC.
The Chinese intellectuals and academia were worried about the prospects of isolation. India as the fastest-growing economy with a huge market share and with an enviable demography could only be ignored at one’s peril. The success of India in a global leadership role as demonstrated in the G20 summit and the follow-up actions has added to the credentials of India as a benign leader of developing countries. Its actions in its neighborhood as in Sri Lanka have enhanced the confidence of the smaller nations who can look up to India in times of need.
In November an Indian delegation visited China and interacted with think tanks, Government officials, and Universities. Ms Sapna and I were part of this delegation and in every meeting, I had specifically insisted that we should not leave it for future generations to sort out what we can in terms of border resolution. Last week Mr Subramanian Sridharan , a distinguished member of C3S shared the following which only indicates that the more things change the more they remain constant?:-
…..Though Ministry of External Affairs officials would not confirm if Jiang and Narayanan discussed the border issue, it is understood that the Indian President referred to the two agreements of the past and the 12 Joint Working Group meetings held so far, and emphasised the need to accelerate the process of delineating the Line of Actual Control. The Chinese and Indian Expert Groups are to meet in five months with their respective cartographers and maps to debate the 40-year-old border issue.
In response, Jiang referred to disputes left over by history, but he said the differences must be resolved by patience when the conditions are right.
"It is true that problems have been left to us by history," Narayayan is reported to have told Jiang. "But these problems should be resolved and not left again to history. This is not a problem we should bequeath to future generations."
It is obvious that these sentiments have been consistent from the Indian side. Regrettably, China has chosen to keep the issue alive as it can needle India at the time of its choosing.
However, this news of China agreeing to restore the status quo would open up a new chapter in bilateral relations. The complete details of what are the time-bound plans and in which sector would all still be in the official domain in the absence of specificities. However, this should not be another interim solution on the part of China “to bid for time to build its strength “again to choose its time to strike. As of now, it appears that it is busy with sorting out the Taiwan reunification and does not want a two-front challenge.
By and large, the majority of the strategic community in India is united in their assessment that while we welcome these long pending developments, we need to continue to be guided by Reagan's advice to “Trust but Verify”. The intellectual community in India is quite clear that India needs to go one step further and only after due process of verification on the ground should we trust. So it is clear that for India it would be “Verify before you trust” in the light of decade long experience with China .
Comments