Factors Underlying Sino-Indian Rapprochement At BRICS – Analysis
India’s disillusionment with the West, its need for Chinese investments and China’s opening its doors to Indian tycoon and Modi acolyte Gautam Adani account for the change.
Indian Prime Minister Narendra Modi and Chinese President Xi Jinping had a very significant bilateral meeting on October 23 on the side lines of the Shanghai Cooperation Organization’s summit in Kazan, Russia.
Both leaders signalled a breakthrough in the long-drawn out and tortuous negotiations on ensuring peace on the troubled 3,000 km border between the two countries.
Speaking at a think tank in New Delhi, after Kazan summit, India’s Defence Minister, Rajnath Singh, said that the two countries have reached a broad consensus to restore the ground situation based on principles of equal and mutual security.
The new agreement allows Indian forces to resume patrolling in key areas such as Depsang and Demchok that had been flashpoints in the India-China standoff on the 3,000 km border.
The resumption of patrolling opens areas for Indian herdsmen to take their flock for grazing, a major demand of people on the Indian side of the border.
Although the deal does not amount to “disengagement” as such, it is an arrangement which will lessen friction on the ground, allow the two countries to discuss de-escalation and disengagement, and hopefully go for demarcation of the border in course of time.
Experts said that the resumption of these activities is a confidence-building measure and a signal that both countries are willing to reduce military tensions. According to Defence Minister Rajnath Singh, continuous dialogue had paid dividends.
Surprise for Most
To most observers in India and abroad, the deal, however small, came as a surprise as the prevailing wisdom is that India and China are such incorrigible rivals that even the smallest detente is inconceivable. But economic compulsions and geopolitical developments combined to shape events in favour of a détente
In 2020, in Galwan Valley, 20 Indian and four Chinese soldiers were killed as the two sides fought ferociously with clubs and stones. This unusual clash led to a marked deterioration in Sino-Indian relations. India banned many Chinese consumer products including Tik Tok.
But all the bitterness appears to have disappeared into thin air and euphoria is the order of the day. A combination of diverse factors such as India’s growing disillusionment with the West, its need for Chinese investments and China’s opening its doors to Indian tycoon and Modi acolyte, Gautam Adani, account for the change.
Geopolitical Dimension
To take the geopolitical dimension first: India’s relations with the Western bloc, particularly US and Canada, had hit stumbling blocks. India did not back the West’s case against the Russian attack on Ukraine. On the contrary, it bought crude oil from sanctioned Russia at a concessional rate, refined it, and made money by selling it to energy-starved Western Europe.
An angry US Ambassador to India, Eric Garcetti, told an audience in Kolkata that he does not think that India and the US are friends. Friends, he said, come to each other’s help when one of them is in need. India’s hadn’t come to Ukraine’s aid at a time of distress. Before Garcetti’s admonition, US foreign policy expert Dr. Ashley Tellis, wrote a paper urging Washington not to count on India, because India takes a lot from the US, especially sophisticated defence equipment, but does not reciprocate.
In American eyes, India’s bid to exercise “strategic autonomy” while being a “strategic partner” of the US, is not on.
More recently, the US, Canada and India have been at odds over an alleged Indian government involvement in the killing of a Sikh Canadian, Hardeep Singh Nijjar, on Canadian soil, and an attempt to kill an American Sikh Gurpatwant Singh Pannun in the US.
Nijjar and Pannun have been campaigning for the secession of a part of India to form an independent Sikh state of Khalistan. For the US and Canada, any Indian official involvement in the assassination of Nijjar or the attempt on the life of Pannun, is unacceptable, an invasion of their sovereignty.
India not only denied any official involvement in the two cases, but accused Canada and the US of disregarding its sovereignty and territorial integrity and brazenly mollycoddling known terrorists and separatists. Though talks are on about the matter, an understanding is not on the cards, as of now.
India and US are at odds over foreign policy with India not wanting to go against Russia or fight a war with China as the US desires. With the result, New Delhi is reaffirming its ties with Moscow and is making overtures to China.
While Russia has an unbroken history of close of ties with India, China is shedding its antagonism to India. It has been showing interest in economic cooperation with India putting the intractable border issue on the backburner. And India appears to be shedding its stance that there can be no normalization of ties so long as the border is tense.
Economic Factor
India’s need to develop its industry is pushing it to have closer ties with China and shedding some of its fears about Chinese infiltration and sabotage.
A rather embarrassing fact for India is that its key industries are heavily dependent on Chinese intermediaries. According to economists Biswajit Dhar and K.S Chalapati Rao, India’s depends on China for the supply of a wide range of products, from the simplest like nails/tacks and umbrellas to sophisticated telecom and electronics products, and pharmaceutical intermediates called Active Pharmaceutical Ingredients (API).
Chinese domination in the import of telecom and electronic products has increased manifold over the past few years after the Indian government initiated the Digital India programme in 2015.
Chinese APIs have helped Indian generic manufacturers provide cheap medicines not only in Indians but to many abroad in both the developing and developed worlds. Due to its deep penetration in the global markets, the India has acquired the name “Pharmacy of the World”.
Large volumes of mobile phones are sourced from China. In 2019–20, more than 83% of imports of mobile phones were of Chinese origin. Nearly 90% of colour TV sets imported into the country were from China. India continues to depend substantially on imports of Chinese telecom transmission equipment.
The motorcycle industry sourced 85% of its imports of parts and components from China in 2018-19. While most motorcycle components are obtained locally, India imports critical parts like wheel rims from China. India is heavily dependent on China for solar photovoltaic cells. More than 90% of imports of silicon wafers and solar lanterns in 2019–20 were from China.
To support the production of Indian textiles and garments, another important export industry, India has been ramping up imports of yarn and fabric from China. Even the automobile industry — considered a success story for both domestic and export sales — has been increasing its imports of vehicle parts and accessories from China.India had made significant strides in producing solar panels but now relies even more on the Chinese solar cells that go in them. No wonder then that China is India’s largest trading partner.
Bid for Chinese FDI
In July, India’s Chief Economic Adviser Dr. V. Anantha Nageswaran said that to boost global exports India should either integrate into China’s supply chain or promote FDI from China.
India has already been allowing Chinese companies o invest, albeit on a case by case basis. It has also been allowing minority share-holding in some companies and relaxing visa rules for Chinese experts.
Nagewaran was keen on reducing the adverse trade balance with China which was US$ 83.36 in 2023.
Adani’s a Critical Entry
On China’s part, it has done something significant to clinch issues with India. In September, it allowed the Adani Global Pte, a Singapore-based subsidiary of Adani Enterprises owned by Gautam Adani, to establish a wholly-owned subsidiary, Adani Energy Resources (Shanghai), with a registered share capital of U$ 2.1 million.
AERCL was incorporated and registered under the Company Law of China on September 2, 2024. This was a month before Prime Minister Modi was to meet Xi Jinping in Kazan, smile and shake hands.
With a Modi acolyte like Adani having a stake in China’s economy, economic relations between the two countries will be on a sound footing, and that in turn, will lay the foundation for a strong political relationship.