INTRODUCTION
India and China, the world’s two most populous countries and rapidly developing economies,
are at the centre of the global arena today. Both neighbours have a rich cultural history and
traditions, which even today influence the day-to-day lives of many Asians. With many
similarities and a shared colonial past, it is interesting to study how both parties have a
completely divorced approach towards national development, foreign policy, and global
governance.
The latest, 31st round of border affairs meetings to resolve the LAC standoff are primarily a
reflection of their foreign policy trajectories and domestic developments. Chinese foreign
policy is geared towards re-establishing China at the centre of the global economic and
political system, and India, like other major powers, faces the dilemma of accepting or
resisting it.The shadow of China looms large over India’s strategic landscape, necessitating
a nuanced and multifaceted approach. Therefore, analysing the horizontal spread of China
across the world geography is very important, especially for India, considering their
tumultuous relationship through history.
A BRIEF TIMELINE OF THE RELATIONSHIP
Chankya’s Arthashastra, the ancient silk road, the travels of Buddhist monks, and the
discovery of Chinese coins in Tamil Nadu are a few examples of an unbroken chain of early
contact between India and China. During the colonial period, both countries faced foreign
domination and internal strife. However, the founding fathers of two young states were
optimistic of the future. Sun Yat-sen (founder of the Republic of China) emphasised a
‘PAN-ASIAN’ ideology, while J.N. Nehru called both “sister nations.” India also became the
first non-communist nation in Asia to establish diplomatic ties with the PRC on 1st April
1950.
Regardless of the positive start, China’s constant ‘cartographic aggression’ belied all hopes
of peaceful coexistence (as they were laid out in the PANCHSHEEL AGREEMENT, 1954). A
series of events during the 50s and 60s, like the occupation of Tibet by China, road
construction by China in Aksai Chin, the refuge of the Dalai Lama in Dharamshala, the
Sino-India war, and the sudden objection of China to Indian maps, are proof of unreliable
communication from China’s side and mismatch in official statements and military actions.
The 1980s and 1990s saw the signing of several agreements aimed at reducing tensions,
including the Agreement on the Maintenance of Peace and Tranquility along the Line of
Actual Control (LAC). There was a growing focus on economic cooperation at the start of the
21st century. In 2006, China and India re-opened the Nathula pass for trading; Nathula had
been closed for 44 years prior to 2006. In the 2009 book “Getting China and India Right,” the
authors suggest a China plus India strategy so as to strategically benefit from both India’s and China’s scale, complementary strenghts, and reducing the risk of being unilaterally present.
However, uneasiness resurfaced after 2013, when China started announcing projects like
the ‘Belt and Road Initiative’ and the ‘China-Pakistan Economic Corridor’. On the other hand,
a new Indian foreign policy was cooking, focused on confidence building and outreach
programmes. In March 2015, PM Narendra Modi visited several Indian Ocean littoral states
to help strengthen economic and security ties with them and to wean them away from
China’s growing influence. This was the first time that an Indian Prime Minister had visited
the Seychelles in 34 years, Mauritius in 10 years, and Sri Lanka in 28 years. India also
participated in establishing the 16-member ‘Regional Comprehensive Economic Partnership’
(RCEP), which consists of ASEAN plus Australia, New Zealand, Japan, China, and South
Korea. 2019-20 also brought India a flurry of bilateral naval exercises with the United States,
the Philippines, Japan, and Australia in the South China Sea and the Indian Ocean.
The Galwan clashes of 2020 highlighted the fragile nature of relationships. Since then, both
countries are walking a tightrope in terms of managing border disputes. Even after multiple
rounds of diplomatic talks, no fruitful plan has been concretized to settle the issue
permanently.
INDIA’S EFFORTS TO TACKLE THE FRONTIER AGGRESSION
The differing perceptions of the LAC’s alignment—India’s 3,488 km versus China’s 2,000
km—highlight the complexity of border management between the two nations. Along with
that, China’s proximity to Pakistan and investment in the CPEC, along with others in Sri
Lanka and Bhutan, build upon the strategic mistrust.
Satellite images are proof of how China is developing infrastructure at a rabbit’s speed
across the LAC, from roads to bridges to bunkers, ammunition dumps, and artillery positions.
For example, the road from Samzungling to Galwan Valley enhances China’s ability to
quickly mobilise troops and resources. Similarly, China’s road to Aksai Chin has historically
served as a critical route connecting the Xinjiang region to Tibet.
India’s response to these developments has been more proactive as compared to the past.
The increasing budget allocation for defence, from ₹3,500 crore in 2022-23 to ₹6,500 crore in
2024-25, underscores the importance placed on border security.The construction of roads
like the DSDBO (Durbuk-Shyok-Daulat Beg Oldie) Road and air bases such as Nyoma Air
Base are aimed at bolstering India’s strategic positions. Investments in upgrading the
Sikkim-Naku La sector, extending airstrip lengths, and building helicopter bases reflect
India’s commitment to securing its borders.
The use of the ‘Salami Slicing’ strategy by China, whether it be the renaming of places in
Arunachal or the building of roads in non-patrolling areas, is a long-tested method used by
China, where it starts to aggressively change the status quo in a particular sector.
China takes from the Confucian idea of ‘moderately prosperous society’ or what they call
XIAOKANG society and populates an area. The Indian government’s ‘VIBRANT VILLAGE
PROGRAMME’ launched in July 2023 is being hailed as a balanced countermeasure to the
Xiaokang villages. The VVP seeks to provide essential services, including social goods,
livelihood opportunities, healthcare, infrastructure, and communication facilities to encourage
the repopulation of these border villages.
The harsh weather conditions, especially in Arunachal and Ladakh, difficult terrains, and
remote locations are a longstanding challenge to infrastructure development across the LAC.
But it also presents an opportunity for India to form innovative solutions, and organisations
like BRO and DRDO are at the forefront to ease out military operations in such tough
terrains. The recent shift of focus on last-mile connectivity, counter-infrastructure
developments, and consolidation of military positions is a positive shift in India’s attitude. But,
reaching one step ahead of China in this game should be the ultimate goal of India’s defence
policy.
ECONOMIC RELATIONS: COUNTERING THE TRADE IMBALANCE AND MORE
Tim Cook, on whose watch Apple began making iPhones in India, called the country “an
incredibly exciting market.”
Warren Buffett said India holds “unexplored” opportunities for Berkshire Hathaway.
But the question we need to ask ourselves as a nation is, whether this hype is real? Whether
India is ready to be a global market where big companies would want to shift operations from
China? What has India to offer the eager west?
China’s economy has surpassed India by many times. And the sole difference is made by
manufacturing”, which has been the centre of Chinese economic activity. Despite
representing 17.6% of the world population, India only contributes approximately 3.4% to the
global GDP. Due to the economic slowdown of 2020–21, unemployment in the
manufacturing sector shot up. Though as of 2023, 35.65 million people were employed in the
manufacturing sector, which is a decent comeback after COVID but is nowhere close to even
the 2017 mark of 51.31 million. 2 The slow pace of job creation in the manufacturing sector,
along with privatisation in the government sector, has been a bone of contention between
the government and the youth.
Various national flagship schemes, like the Production-Linked Incentives (PLI) program
targeting 14 sectors, alongside state-specific industrial policies, intend to raise the
sector-wise contribution of manufacturing to the GDP to 25 percent by 2025.While flagship
projects like ‘ATMANIRBHAR BHARAT’ and ‘PRODUCTION LINKED INCENTIVE’ schemes
have been running in the background, the manufacturing sector still remains underwhelmed.
Manufacturing accounts for only 15% of the economy.
The value added in quarter 1 of the financial year 2024-25 stands at 918.2 million dollars,which is a significant improvement
over last year.
Coming to the trade numbers, in 2023 China emerged as India’s largest trading partner,
surpassing the United States. The trade relationship is characterised by a significant trade
deficit for India, with imports from China far exceeding exports. India’s imports from China
primarily consist of raw materials, intermediate goods, and electronic components. While
Indian exports to China include minerals, agricultural products, and pharmaceuticals.
However, India’s export basket remains limited compared to the diverse range of imports
from China, contributing to the persistent trade deficit.
However, in a recent report of January 2024 by Morgan Stanley, there is a significant
opportunity for bottom-up stock picking, robust growth, and improved profitability. “We
believe India’s growing population and young demographic, and its efforts to build digital,
regulatory, financial, and physical infrastructure over the last decade, will pave the way for
growth acceleration over the next decade.” The report hailed initiatives like ‘PM GATI
SHAKTI’. “India’s nominal GDP growth has been predicted to be 8.1 trillion in 10 years.
India needs to de-risk supply chains, ease regulations, build manufacturing units, import
more intermediate products than finished goods, and invest in research and development.
With all the above measures and a skilled demographic dividend, the road to developed
India by 2047 will be less rocky.
GLOBAL OUTLOOK AND POLICY INITIATIVES
India and China have an opposite view of the world outside. And that is highly influenced by
their national political systems. One is a democracy, while the other is a one-party socialist
state.
China has always been sceptical of the global liberal order and sees it as a trap laid out by
the western powers.It is what we can say, ‘selectively active’ when it comes to diplomacy,
i.e., active on issues like Tibet, Taiwan, the Indo-Pacific, and more. “For China, the most
populous country, to run itself well is the most important fulfilment of its international
responsibility”. China’s white paper on peaceful development 2011. It has a very
‘transactional approach’ when it comes to global ties and does not completely believe in
global governance, which many individualists would agree with.
On the other hand, India seems eager to take up important diplomatic positions at global
forums and project itself as what we call a ‘responsible international stakeholder.’ That would
mean transcending national boundaries and contributing to the global common good. India
has awakened to the realisation of the importance of establishing its own footprint in the
larger subcontinent. New Delhi has gone from championing decolonization and non-
alignment to a newfound interest in ASEAN countries, Central Asia, and its neighbours in the
Bay of Bengal region. In March 2015, Prime Minister Modi put forward the concept of
SAGAR’ (Security and Growth for All in the Region) and, at the same time, believes in the
importance of the QUAD and minilateral, trilateral, and multilateral diplomatic talks.
Some challenges India’s strategy may face are the increased Chinese investments in its
‘String of Pearls’ and even in Africa, which exceed the investments made by India. Almost all
nations have economies dependent on China. No country wants to get into a cold war with
China currently, as China supplies essential pharmaceutical products to nations worldwide.
While the world is still recovering from the pandemic, China has not shielded away from
flexing its military muscles against its neighbours. In the first half of 2020, Chinese naval
forces have rammed a Vietnamese fishing boat, buzzed a Philippines naval vessel, and
harassed a Malaysian oil drilling operation all within their respective EEZs. But, at the same
time, ASEAN countries need China, especially in a post-covid world, to develop their
economies and for funds.
Post-pandemic China’s foreign policy is more assertive in terms of actively engaging with
global leaders, whether it be a phone call with the U.S. President or framing a peace plan for
Russia-Ukraine. But nothing in China’s foreign policy is devoid of an economic interest. An
end to war will only ease China’s economic plans in Europe.
So, instead of going out rightly against China, India definitely should build military strength
and alliances, but also need to search for convergence points with China, like globalisation,
climate change, multipolarity, drug trafficking, regional security, and stability, for peaceful
relations in the future.
USING SOFT POWER AS AN EFFECTIVE TOOL
American political scientist Joseph Nye coined the term ‘Soft Power’ in his 1990 book ‘Bound
to Lead.’ According to him, it is the ability to “shape preferences of others,” a situation where
others seek to emulate you; it relies on co-optation rather than coercion and grows out of a
country’s culture, domestic society, and political values. He further added on the concept
with time.”I also said that soft power was only one component of power and rarely sufficient
by itself. The ability to combine hard and soft power into successful strategies where they
reinforce each other could be considered “smart power” (a term later used by Hillary Clinton
as Secretary of State).”
China has the 2nd largest population, the largest continental landmass, the largest
man-made space program, the largest aircraft carrier, the largest hydroelectric dam, the 2nd
largest economy, the largest military in terms of manpower, the world’s largest exporter, the
largest foreign exchange holdings, the 2nd largest receipt of inbound investment, and the
highest number of millionaires and billionaires. But can all that stand on par with American
culture and its global influence? How many Chinese movies can one name? Which Chinese
influencers or stars are followed by people across continents?How many political asylum
applications are pending in China?
The real Achilles heel of China’s soft power is its political system; nobody wants to replicate
it. A mere glance at the world map will show that China is a ‘Lonely Power’, with only a few
closed allies, who themselves are no strong supporters of democratic values.
On the other side of the coin is India, which seems to have a strong hold in terms of soft
power and influence. Being a democratic country gives India an edge in engaging openly
with the western world and exporting Indian culture. Today, ‘YOGA’ and ‘INDIAN CURRY’ are
words you hear in the White House. The Indian diaspora plays a significant role in shaping
the politics of countries like the U.S., Canada, the U.K., etc. From Kamala Harris to Rishi
Sunak and Dev Patel to Priyanka Chopra, the west is being exposed to Indian culture like
never before.
China is way ahead of India in wealth creation and export business but is conflicted about its
global identity and how it wants to portray itself, or maybe it has no plans to fit into any
portrait. But India has successfully made its mark, culturally,especially in the past decade.
CONCLUSION
As the centre of gravity shifts from the Atlantic to the Indo-Pacific through Asia-Pacific,
India’s approach is to ensure that a code of order is established, as our entire philosophy is
based upon an open, integrated, and balanced world order. The rise of a hungry neighbour
in the Himalayas means India needs to buckle up and focus on rapid economic development
and utilising the demographic potential it enjoys.
India and China have a combined population of over 3 million people; a potential warmth in
relations must not be discarded. Together, both can rule this ‘Asian Century.’ Peace in the
Himalayas can be achieved when interests are mutually respected and handled sensitively.
It is applaudable that even after long-standing border tensions, both countries have been
mature enough to not let any third party govern the discourse. There is a possibility of a
fruitful bond if China clearly communicates its intentions and plans with regard to the LOC,
and on the other hand, India does not let the West overpower its foreign policy.