A qualitative shift

Prime Minister Narendra Modi’s China visit reflects the changing contours of India’s relationship with its giant neighbour as well as the quality of the engagement. That the focus is on moving ahead is clear from the signals from both sides, though some of the core issues, such as the border question and China’s claim on Arunachal Pradesh, remain a work in progress. Though both leaders had called for greater bilateral cooperation during their previous meetings, this time around there are clearer indications of readiness to move ahead, especially on the economic front. The focus of the meetings held in Xian, Beijing and Shanghai was on strengthening economic ties. The 26 deals worth $22 billion signed by the business delegates from both sides indicate the maturing of ties, with the majority of the deals being business-to-business rather than government-to-government. The deals reached in the power and port sectors point to India’s increasing readiness to invite Chinese investment and expertise in key infrastructure areas, something New Delhi was not comfortable with till recently. The widening trade deficit — Chinese exports to India are triple India’s exports to China — remains a concern. Both sides have, however, agreed to set up a task force to address this.

The lack of a breakthrough on the irritants in Sino-India ties, such as the boundary question and the stapled visa issue, should not be seen as a failure. Given the complexities of India’s ties with China, it’s premature to expect immediate solutions to legacy problems. Modi’s approach has been to not let these overshadow bilateral ties. The policy has been to deepen the economic engagement while simultaneously pushing for a settlement of disputes. India’s decision to extend online visas to Chinese citizens needs to be read in this context. Beijing seems to be responding to this strategy, partly because of its own economic compulsions and partly because of its strategic calculation — it perceives India as a “swing state” and it doesn’t want New Delhi to swing to the US’s side in Asia. The results are visible. Besides the investments offered, China has welcomed India to the Asia-Pacific Economic Cooperation grouping, and as a full member of the Shanghai Cooperation Organisation — both will help strengthen India’s economic and political influence in the region. The identification of civil nuclear energy as a “new avenue for cooperation” marks a major improvement in the relationship.

What remains to be seen is how India will sustain its positive engagement with China in the face of rising geo-political challenges in Asia. Modi had indirectly criticised an “expansionist” China when he visited Japan last September. The last two Indo-US joint statements also had references to China’s territorial claims. Modi said in China that both nations should “ensure that our relationships with other countries do not become a source of concern for each other”. That’s perhaps his biggest challenge. India has to clearly demarcate the areas of cooperation on both sides and limit the scope of partnership to those areas, irrespective of the pressure great powers exert on it.

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