Trans-Pacific View

What the US Gets Wrong About India’s Relationship With China

India’s relationship with China goes far beyond security issues.

What the US Gets Wrong About India’s Relationship With China
Credit: Flickr/ Narendra Modi

The India-China relationship is a far more complex and multi-layered one than many U.S. analysts realize. Both countries are trying to find common ground in a number of areas. It was surprising to discover that the views of many U.S. analysts mirror skeptics in the strategic community in India. Both tend to view the India-China relationship solely from the prism of security issues and territorial disputes while ignoring key state-level economic ties.

I met off-the-record with about 40 strategic analysts and policymakers in Washington, D.C., during a SAV visiting fellowship at the Stimson Center. Some Americans, I found, had a good grasp of South Asian politics, while others were way off the mark. Perhaps the greatest misconception I came across in D.C. concerns the India-China relationship. Most conversations focused on the contentious aspects of the relationship, and ignored an unnoticed transformation taking place between Beijing and Delhi. If Americans fail to recognize the nuances in the relationship between China and India, their Asia policy is bound to be heavy-handed and Washington could lose an opportunity to shape regional politics in a positive way.

I found that there are a handful of reasons why U.S. analysts are out of sync with the changes taking place in the Beijing-New Delhi relationship. First, a focus on hard security issues and territorial disputes detracts from serious analysis of the India-China economic relationship and progress in other areas. While there are certainly major divergences in the strategic sphere apart from territorial disputes between the two countries, the strongest stress on the relationship does relate to China’s inroads into South Asia.

Many strategic analysts in India believe that China has designs of encircling India; they often cite the China-Pakistan Economic Corridor (CPEC) to buttress this point. India’s increasing role in Southeast Asia, specifically in the South China Sea, also puts pressure on the relationship. One clear instance of this is the decision of Vietnam to award exploration projects to India’s state-owned Oil and Natural Gas Company in the South China Sea, an action which China has raised objections to time and again. In May 2015, a Chinese foreign ministry spokesman categorically stated that “Any oil and gas exploration work should get approval first from China.”

Meanwhile, New Delhi and Washington have found common ground on both strategic and economic issues. However, this does not necessitate a skeptical view of the New Delhi-Beijing relationship’s potential. Beijing and Washington have dissonance on many strategic issues, but still share a robust economic relationship.

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Neither India nor the United States should look at Sino-Indian relations as a zero-sum game. Former Chinese Premier Wen Jiabao wisely stated that the world is big enough for both India and China to grow. Indian Prime Minister Narendra Modi has emphasized that India and China will need to work jointly in the 21st century. China and India both understand the need for connectivity. In this context, both countries seem to have made some progress on the Bangladesh, China, India, Myanmar (BCIM) Corridor, an important component of China’s One Belt, One Road project. A number of U.S. analysts told me that India should focus on the BCIM Corridor instead of worrying over China’s investment in Pakistan through the China-Pakistan Economic Corridor (CPEC). Efforts are also being made to increase connectivity between both countries by increasing the number of flights.

In the economic sphere, there is much room for improvement between New Delhi and Beijing. The balance of trade is presently skewed in favor of China. For the period April 2015-January 2016, India’s trade deficit was $44.7 billion, with India’s exports to China standing at a mere $7.56 billion while imports stood at $52.26 billion. For 2014-2015, the trade deficit for New Delhi was estimated at $48.48 billion. However, Chinese investments in India are increasing.

India-China relations are no longer restricted to New Delhi and Beijing; interactions between the two countries’ states and provinces are also increasing. India is seeking to reach out to Chinese provinces with whom it did not have links previously. Increasing ties between Indian states and Chinese provinces enriches and supports high-level diplomatic ties. Already, a number of Indian chief ministers have visited China. During Modi’s visit last year to China, an annual State and Provincial Leaders forum was inaugurated. Speaking at the launch, the Indian prime minister made a significant point:

A number of decisions can be taken quickly by the State governments. These interactions also make the State governments more sensitive and aware of the international dynamics and requirements.

Liberalizing visa regimes will also help strengthen people-to-people contacts and trade. India has bolstered the relationship by beginning an e-visa facility for Chinese citizens. This improvement is evident in the increase in number of tourists arriving in India on e-visas, which has gone from a little over 2,700 in October 2014 to 56,477 in October 2015.

It is important for members of the strategic community and the government in the United States who study India to interact with analysts outside Delhi. It is also critical to understand the increasing links between a number of state governments in India and China. Finally, U.S. and Indian analysts alike will benefit from realizing that there is no contradiction between India strengthening its ties with the United States while also keeping a reasonable and open relationship with China.

Tridivesh Maini is a Visiting Fellow at the Stimson Center, Washington, D.C. and a Senior Research Associate with the Jindal School of International Affairs, OP Jindal Global University, Sonipat.