Rajiv Theodore
American Bazaar
September 15, 2014
NEW DELHI: For decades, India and China were at logger-heads, spending billions on troop build-ups and war equipment. Years went by, with dry diplomatic meetings peppering the relations between the two neighbours. A war and several border skirmishes later, India finally decided to develop its border regions like Arunachal Pradesh, which China call southern Tibet.
Today, India plans to construct army stations, arms depots, schools, hospital, power stations and roads in Arunachal Pradesh. These areas were till now neglected. It’s not as if they inaccessible, which may have acted as a natural buffer against any serious incursion or aggression. But that seem to be an anachronism in today’s times when the other side, China, is replete with roads and state-of the art infrastructure.
But there are winds of change blowing in the wind. The almost cold staring face-off has given way to smiles breaking out on the faces of the two big neighbours. Today, the elephant and the dragon are at the cross-roads, en-route to smoke the peace pipe over a disputed territory that is fast diminishing its strategic importance it once had.
In other words, a new context has emerged on the horizon where cross-border investments are the buzz words. The two countries have sub-consciously reached a conclusion that grappling with pieces of territory that has long back outlived its strategic importance and the very futility of a war which has this dangerous potential of pulling back a country’s development indexes several notches below are all sheer exercises in vain. The two-sides have expressed confidence that sore notes like the festering border rivalry would be resolved peacefully in due course of time.
Besides, India’s growing proximity with Japan is a case in point that could leverage negotiations with Beijing. It must be recalled that prime minister Narendra Modi had visited Japan early this month to bring home an investment worth $35 billion primarily to refurbish infrastructure in the country.
It is in this context that President’s Xi Jinping’s visit assumes an unprecedented significance when he lands in India on Wednesday, September 17. Critical agreements are expected to be signed for developing industrial parks, infrastructure projects, railways and even nuclear technology.
The Chinese President is expected to ask Modi to join his new brainchild project — a maritime Silk Route linking East Asian nations and India. India would push for China’s bid to be the founding member of the Asian Infrastructure Investment Bank, Beijing’s alternative to the ADB, a lending institution controlled by the United States and Japan. The Bank is a potential conduit for investment to attract Chinese and other capital to fund India’s infrastructure.
Consider this. Beijing has a record forex reserve of $3.95 trillion out which it plans invest $500 billion overseas. India could get a maximum of $300 million from this corpus. Trade between India and China were $65.9 billion last year, but $51 billion of that was exports from China. These investments and purchase agreements will help India in narrowing the ballooning trade deficit with China which has reached about $35 billion in 2013-14.
India is also asking for greater market access for products including tobacco, oil cakes, oil seeds, bovine meat, agricultural and pharmaceuticals. India wants to sell fruits and vegetables like okra, mangoes, grapes, capsicum, cucumber, cabbage, brinjal, bitter gourd, papaya, guava and beans. India has also demanded duty reduction in cotton, cotton yarn and handmade carpets.
But the increasing positive relations with China could be seen from an entirely different perspective of a complex geo-political dynamics too. The bear hug with Shinzo Abe seemed to have spurred China to push its investments into India at a faster pace triggering off a virtual stampede with Japan.
But that does not mean there exists an anti-Beijing axis. If not parallels there are certain similarities between the new government’s larger styles of functioning with China’s. It should not be forgotten that Modi came to power on the promise of enhancing manufacturing and creating jobs, high speed trains and smart cities which is strikingly similar to the Chinese economic model which has also prioritized urban infrastructure to propel growth and generate employment.
And just days after the Chinese president gets back home, Modi would embark on a high profile visit to Washington, which is India’s second largest trading partner after China to strike deals for investments in highways, industrial corridors, railways and the power sector.
Ultimately, President’s Xi’s visit must be seen as a breakthrough in India–China bilateral relations that has the potential to realign the power game in Asia and eventually impact the global world order.
