An Indian Perspective

India-China relations have undergone surprising twists and turns in the past few years. Seemingly, complicated deadlocks and dramatic reconciliation efforts mark the relationship between the two Asian giants. This trend has only grown since Narendra Modi assumed the office of the prime minister of India in 2014, and President Xi Jinping acquired the status of the most powerful Chinese leader after Mao Zedong over the past six years. Complicating the situation are the policies of Donald Trump, who both talks of India as a part of the Quad in a “free and open Indo-Pacific” and targets India with trade sanctions. India-China relations continue to be on-again, off-again, while Indo-US relations appear to be newly unsettled.

In the past few years, India and China have made some sincere efforts to overcome differences, albeit several new and arguably more powerful thorny issues have emerged between them. These include India’s frustrations over: Securing Chinese support on the United Nations resolution for declaring Pakistan-based Jaish-e-Mohammed (JeM) chief Masood Azhar an international terrorist; the China-Pakistan Economic Corridor (CPEC), which passes through the disputed Pakistan-occupied Kashmir; China’s increasing efforts to exert greater influence in smaller, neighboring countries of the Indian sub-continent; China’s refusal to support India at the Nuclear Suppliers Group (NSG); the trade deficit with China ($62.93 billion in 2017-18); and most importantly, the 73-day-long Doklam stand-off, involving India and Bhutan on one side and China on the other. Each of these poses a grave Chinese challenge to India.

China, at the same time, is upset with India’s firm opposition to its Belt and Road Initiative (BRI) and its rising bonhomie with the United States and Japan. China is also concerned about the Quadrilateral Security dialogue, popularly known as the Quad, involving India, Japan, Australia, and the United States.¹

Both India and China are mindful of the fact that pugnacious elements in their relationship have the potential to damage their future prospects in regional and global politics (though in varying proportions). Modi alluded to that in his keynote address at the 2018 Shangri-La Dialogue in Singapore: “Asia and the world will have a better future when India and China work together in trust and confidence, sensitive to each other’s interests.”² Modi’s statement is in line with recent efforts at reconciliation on the part of both India and China. Modi met Xi Jinping in Wuhan, China, for an informal summit on April 27-28, 2018—the first time that an Indian leader had a summit with a world leader in an informal format.

Modi has been to China twice in 2018: First, for the informal summit with Xi in Wuhan in April, and second, to represent India in its first Shanghai Cooperation Organisation (SCO) summit as a full member in Qingdao on June 9-10. Modi and Xi are likely to meet twice again this year: First for the BRICS (Brazil, Russia, China, India, South Africa) summit in Johannesburg, South Africa in July, and second, for the G20 Summit in Buenos Aires, Argentina in November.

Making Sense of the India-China Dialogue

There have been major setbacks in India-China relations, most of which are linked to their border disputes and China’s support for Pakistan. Arguably, however, after every setback, both sides have displayed considerable diplomatic acumen to manage their differences. For one, in 2006, when the Chinese ambassador to India, Sun Yuxi, claimed that India’s Arunachal Pradesh province belongs to China, it infuriated the Indian public. Sun said, “In our position, the whole of the state of Arunachal Pradesh is Chinese territory. And Tawang is only one of the places in it. We are claiming all of that. That is our position.”³ However, through good diplomatic footwork, the two sides managed to diffuse tensions, and a week later, President Hu Jintao visited India on November 20-23, 2006.

Seven years later, in April 2013, India and China found each other on adversarial sides with another border standoff in Daulat Beg Oldi, just a month before Premier Li Keqiang’s first-ever visit to India. However, that was also managed just in time for Li’s visit. As regards the Doklam standoff, it was also resolved through strenuous last-minute consultations, and Modi went on to visit China for the 2017 BRICS summit. While the boundary dispute between the two Asian giants has remained unresolved since 1962, they have been successful in maintaining peace along the border. Modi stated at the 2017 St. Petersburg International Economic Forum, “It is true that we have a border dispute with China. But in the last 40 years, not a single bullet has been fired because of border dispute.”⁴

Nevertheless, the very fact that China has been evasive on the issue of peaceful resolution of the border dispute makes Delhi suspicious of Beijing’s intentions. “For decades, China’s approach has not been one of "resolving" the dispute with India; on the contrary, it has been to "manage" the disputes, thus looking at the issue in an ad hoc manner. China has resolved land boundary disputes with the Central Asian Republics, Myanmar, Russia, and even Vietnam; but with India, it still seems unwilling to find a solution.”⁵ Delhi believes that such differences have the potential to derail India-China ties. Uncertainties and apprehensions regarding China’s approach towards India are two of the fundamental driving forces for India looking for closer defense and strategic partnerships with the United States and Japan. The more unpredictable and assertive Beijing is with Delhi, the more salience Washington and Tokyo acquire in Delhi’s politico-military calculus, thus enmeshing multi-nodal dynamics in India-China relations. Lack of regular and candid dialogue has only worsened the India-China relationship. Doklam can be seen as an outcome of differing perceptions between India and Bhutan on one side and China on the other, and lack of communication between the two. It was in this context that the Wuhan summit played an important role, helping India and China find a modus vivendiof sorts on the boundary dispute.

In 2014, when Modi assumed the prime minister’s office, his immediate foreign policy priorities were to improve India’s regional standing and improve ties with China. During his chief ministership of Gujarat, Modi had worked closely with China, not only visiting China four times, but also securing $900 million in Chinese investments. The popular perception was that Modi would take India-China ties to new heights. Even China’s Global Times had called Modi “India’s ‘Nixon’ who would further propel the China-India relationship.”⁶ Modi introduced an element of “personal diplomacy” by inviting Xi to his hometown during the latter’s maiden visit to India in September 2014. Xi reciprocated by inviting Modi to Xi’an, which is in Xi’s home province and an important link in the BRI initiative. Xi has received Modi outside Beijing twice: First in Xi’an in 2015 and second in Wuhan in 2018.⁷

During the initial months of the Modi government, the major driver of India’s China policy was convergence rather than competition and confrontation. However, China could not adequately respond to Modi’s initiatives, and several aforementioned steps were taken overlooking India’s concerns. Doklam proved to be a major setback in the relationship. Contrary to what China would have expected, India stood up to the Chinese incursion in Doklam. The standoff, which began on June 16, 2017, came to an end on August 28, 2017 when the two sides issued separate statements for disengagement.⁸ Neither the terms of Doklam disengagement nor the details of the Wuhan summit were disclosed, which, in a way, showcases the diplomatic sincerity of India and China. Both sides have kept it a strictly bilateral process of peaceful catharsis—choosing to engage each other rather than to go down the spiral of a persistent conflict.

The Rationale for the Wuhan Summit

The Wuhan summit was a success in terms of initiating a free-floating dialogue between Modi and Xi. The fact that there was no fixed agenda for the meeting and the two sides had no compulsion to issue a joint statement after the talks provided them greater flexibility. Wuhan, thus, attempted to plug the much-needed gap in India-China dialogue, where regular, structured and non-structured dialogues have been conspicuously minimal. A retrospective analysis of India-China ties in the past ten years begs for several such meetings where issues of concern could be at least brought to the table. While China and the United States have several dialogue mechanisms, India and China do not have much in their coffers.

Shrouded in secrecy, as it has been, Modi’s Wuhan summit with Xi has attracted international attention. This is especially in the context of the Doklam standoff. Through the Wuhan summit, the two countries attempted to work towards the idea that India and China can coexist amidst differences. After the summit, Xi remarked, “Conducting great cooperation by our two great countries can generate worldwide influence.”⁹ Post-Wuhan, India and China have attached greater significance to each other in terms of holding key senior-level talks. This is evident from the May 1 Border Personnel Meeting (BPM) between India and China, held in Chusul in Ladakh, India, where it was agreed to set up a hotline between their respective military headquarters.¹⁰ In order to make the informal summit a regular feature, Modi invited Xi for the second informal summit in Delhi next year, which Xi has duly accepted.

The groundwork for the Wuhan summit was initiated with Foreign Secretary Vijay Gokhale’s China visit in February 2018. In April, External Affairs Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman visited China to participate in their respective SCO meetings. National Security Advisor Ajit Doval also visited China in April 2018 and held talks with Yang Jiechi. Doval’s visit is often termed the key ice-breaking event on the Doklam issue.¹¹ All these visits, particularly Gokhale and Doval’s, were seen as preparatory visits for the Wuhan summit.

While China is still continuing its policy of “boxing in” India in the sub-continent through effective use of Pakistan, it is mindful of the fact that putting too much pressure on India would be counterproductive. China is concerned about India’s growing ties with the United States and Japan, viewing them as a potentially adverse strategic swing. For China, the resurrection of the India-US-Japan-Australia quadrilateral security dialogue puts its long-term interests in harm’s way. In 2007, China had protested against the Quad, calling it an anti-China coalition. It even issued a demarche to the Quad countries, seeking an explanation and the rationale behind the dialogue.¹² Though the Quad is still at its formative stage with no institutionalization attempts so far, two meetings at the senior officials’ level have taken place: First on the side-lines of the East Asia Summit in Manila on November 12, 2017, and second, in Singapore on the side-lines of the ASEAN Senior Official Meeting (SOM) on June 7, 2018. China understands that India’s commitment to the Quad would be a huge turnaround in policy, leading to unexpected shifts in the regional and global security architecture. Beijing’s decision to engage India through Wuhan seems to be aimed at blunting and softening India’s eagerness for the Quad. China seems to have achieved some success in that regard, which was manifested in Modi’s speech at the Shangri-La dialogue where he did not make any mention of the Quad. For India, the reasons for Wuhan were no less significant. Modi is aware that with the 2019 general election around the corner, any tension along the India-China boundary will not work well for his prospects.

Also, China has been overwhelmed by India’s resolute opposition to its BRI, which has been remarkable on all counts. According to India’s Ministry of External Affairs, “India’s position on the so-called CPEC has been consistently conveyed to the Chinese side. It has been pointed out to them that Pakistan has been in illegal occupation of parts of the Indian state of Jammu & Kashmir since 1947. Government has conveyed to the Chinese side, including at the highest level, its concerns about their activities in PoK and asked them to cease these activities.”¹³ For China it has become a matter of prestige to implement the BRI especially after its enshrinement in the party constitution. China has been trying hard to get India on-board. The recent India-Nepal-China trilateral corridor proposal, and India-China understanding to jointly work for the development and reconstruction of Afghanistan may be seen as an outcome of that approach.

The 2018 SCO summit provided Modi and Xi with another opportunity for a meeting. The summit was significant as both India and Pakistan attended as full members for the first time. All members emphasized strengthening counter-terror measures. However, the members were not in unison on the BRI, with India standing as the lone opposition. As at the SCO foreign ministers meeting, the final declaration omitted India in mentioning SCO member countries’ support for this. That the joint communique was not stopped due to India’s disagreement indicates the SCO’s maturity in handling differences. So far as India is concerned, its objective at the SCO is not to obstruct the functioning of the group but to strengthen collective counter-terrorism efforts. The SCO provides India and China an exclusive platform to cooperate in India’s extended neighbourhood. Vulnerability in Afghanistan and Central Asia, and India’s substantial stakes in the region motivate China to work with India. “India is not likely to endorse OBOR [BRI], leave alone being a part of it, unless it gets ‘reciprocal access’ to the regions that are important for its long-term strategic interests. Afghanistan, Central Asia, and the Persian Gulf form an important core of that interest.”¹⁴

Modi’s flagship  “Neighborhood First” policy has not yielded the desired results as India is finding itself increasingly isolated, especially on the BRI. India and Bhutan are the only two countries of the subcontinent that have not endorsed it. India’s relationship with Pakistan remains problematic while China looms larger than ever in its relationship with Nepal, Sri Lanka, and Maldives. China’s overtures in the subcontinent are competitive if not adversarial, which tempts the smaller South Asian countries to take advantage of the perceived India-China rivalry. With Wuhan, India has sent signals to its smaller South Asian and Indian Ocean neighbors that India and China can still work it out, and are not mobilizing for an overt rivalry in the Indian subcontinent. Resolving differences with China may be seen as a part of India’s own version of a New Type of Great Power Relations—an “India-China G2”: “It may be noted that Xi has been advocating for a new type of great power relations with the United States. However, China tends to overlook the fact that the other two big Asian powers—India and Japan—also wish the same from China.”¹⁵ To a certain extent, the Wuhan summit may be perceived as India’s signal to its immediate neighbors that choosing sides would be a premature decision.¹⁶ Without credible support of the United States, especially in providing an alternative to China’s BRI, India would not be able to match up to the Chinese challenge in wooing the countries of the region. Thus, an Indian version of G2 with China is more out of compulsion than choice.

The Doklam stand-off presented India with the stark reality that on China, its differences, diplomatic or otherwise, will remain bilateral. While the details of diplomatic communications during the Doklam stand-off are still shrouded in secrecy, the fact remains that except for the Japanese ambassador to India,¹⁷ none of the Quad members issued any statements on Doklam criticizing China or even spoke of a rule-based order or respect for international laws, etc.¹⁸ While it is true that India would not have expected any kind of overt support from the Quad members and that the Quad was formally announced only after Doklam, even a rhetorical statement on a rule-based order and respect for international laws from potential members of the Quad would have attached more value and sincerity to the Quad.

India and the United States: So Close, Yet So Far

In 2014, when Modi came to power, the popular perception was that given his past experience with the United States, he would not be keen on improving the Indo-US ties. However, defying such speculations, Modi put in his best efforts in moving the India-United States partnership to the next level. The Modi-Obama summit was not only good for optics and rhetoric, but it also brought in some tangible gains for India. It was Obama who, in his 2010 address to the Indian Parliament, motivated India to not just “Look East” but engage the East, and Modi turned the “Look East” policy into the “Act East” policy in 2014—within months after he assumed office. Obama’s “Pivot to Asia” was another contributing factor in India’s deeper engagement with the “East” as it was not only reassuring for US Asian allies but also encouraging to countries such as India and Indonesia. For the Trump administration, the “Pivot” is a thing of the past. Modi’s personal chemistry with Obama was excellent, but with Trump that does not seem to be the case.

During his election campaign, Trump had spoken highly of the partnership with India. In an election rally of Indians in the United States, Trump promised that they (India) “will have a true friend in the White House,” and that “There won’t be any relationship more important to us.”¹⁹ However, the current state of Indo-US ties falls short of the goal Trump had set. Some of the steps taken by the Trump administration are certainly positive. These include: appointing Kenneth Juster, who had played a key role in the Indo-US Civilian Nuclear Agreement, as the US ambassador to India, and the decision to revive the Quad. As promised during his election campaign, Trump has taken some strict action against the terror networks in Pakistan, which demonstrates the growing convergence between India and the United States on security issues.

The Trump administration’s National Security Strategy, released in December 2017 also underscores the growing salience of India for the United States. It states, “We welcome India’s emergence as a leading global power and stronger strategic and defense partner… we will expand our defense and security cooperation with India, a major defense partner of the United States, and support India’s growing relationships throughout the region.”²⁰ India’s defense engagement with the United States has also been smooth under the Trump administration. The decision to sell twenty-two Sea Guardian Unmanned Aerial Systems (UAS) to India for patrolling the waters off the Indian coastline, worth approximately $2 billion, is a key development in India’s partnership with the United States.²¹

However, the Trump administration’s policies on trade, global multilateral arrangements (such as the withdrawal from the Trans-Pacific Partnership), and climate change negotiations (withdrawal from the Paris Agreement) push India and the United States away from each other. On these issues India finds more commonality with China than the United States. On trade liberalization, multilateral trade regimes including the TPP and the World Trade Organization, (WTO), visas and immigration, climate change and the use of solar technology, India and China’s interests are profoundly different from those of the United States. Trump’s accusation that India demanded “billions and billions” of dollars in the name of foreign aid to stay in the Paris Agreement, which, according to him, also helped India double its coal output while the United States received nothing, did not go down well with Delhi.

The Trump administration’s trade policy has gone protectionist and aggressive to the extent of making enemies out of friends—a trend Washington must watch out for. While the wrath of Trump’s trade policy is mostly on China, Canada, India, and the European Union are also not left untouched. For instance, in March 2018, the United States requested dispute settlement consultations with India at the WTO challenging Indian export subsidy programs, which is another sensitive issue that might affect India-US ties. These programs include: “the Merchandise Exports from India Scheme; Export Oriented Units Scheme and sector specific schemes, including Electronics Hardware Technology Parks Scheme; Special Economic Zones; Export Promotion Capital Goods Scheme; and a duty free imports for exporters program.”²² The US Trade Representative (USTR) Robert Lighthizer stated, “These export subsidy programs harm American workers by creating an uneven playing field on which they must compete.”²³ The US request at the WTO does not go well with the “Make in India” initiative. Issues relating to the F1 and H1-B visas for Indian IT sector employees, the Base-Erosion and Anti-Abuse Tax (BEAT), and lowering corporate taxes by twenty-one percent are also likely to hit the big technology firms which have bases in India. This will adversely impact job growth in India, a key agenda for the Modi government.

Meanwhile, the Trump administration has dragged the European Union into a spiralling race for imposing tariff duties. The move is likely to be reciprocated by Europe,²⁴ creating further rifts between the United States and its long-time friends from the region. While the US-China trade war is likely to become a reality, it seems a little premature for the Trump administration to open several other fronts with punitive actions against India, the European Union, Canada, Mexico, and perhaps Japan. Wendy Cutler, a former US trade negotiator, aptly commented on Trump’s policy by stating: “We (the United States) are alienating all of our friends and partners at a time when we could really use their support.”²⁵

Given the unpredictability of the Trump administration and resurfacing US reservations about the transfer of technology to India, Delhi is still unsure about Washington’s support on key issues that have long-term impact on India’s security, economic growth, and development. Serious doubts have been raised about the Trump administration’s commitment to its allies, partners, and friends in the Indo-Pacific region. For India, finding a suitable balance between its ties with China and the United States has been a perennial challenge. Unfortunately, for India, while the United States often falls short of reaching the threshold of being a reliable partner, the China threat looms ever larger in its security matrix. With no clarity about Trump’s intentions, Modi persists in frequent meetings with Xi, but informal summits such as at Wuhan are no guarantee for the resolution of disputes and lasting peace between India and China. What they could contribute is: Paving the way for acknowledging and addressing protracted differences as stepping stones in achieving stability and peace in the relationship.