Since the mid-2000s, the overarching trend in China-India relations has been one of growing competition with a narrowing set of issues where the two are pursuing meaningful cooperation. Within the confines of this trajectory, there is a band within which bilateral ties blow hot and cold in business cycle-like rhythm. The relationship hit one of these troughs in 2016 when Beijing’s efforts to deny Indian membership at the Nuclear Suppliers Group and block sanctions on Pakistan-based terrorists at the United Nations generated unexpected blowback in Delhi. Ties may have reached a contemporary nadir the following summer during the unprecedented standoff in Doklam. However, the border crisis also served to underscore the need for a tactical reset and set in motion efforts to stabilize relations that resulted in the informal summit between Modi and Xi in Wuhan this May. The summit was billed, and in my opinion mischaracterized, by some analysts as demonstrating a more far-reaching re-alignment toward China amid uncertainty about the Trump administration. In reality, it represented a more modest reversion to the mean: political stability against the backdrop of a growing geopolitical competition, particularly in South Asia and the Indian Ocean.
Despite the improvement in bilateral optics, Modi’s June 1 speech at the Shangri-La Dialogue in Singapore contained myriad indirect and thinly-veiled jabs at China. He repeatedly underscored the importance of freedom of navigation, respect for sovereignty and territorial integrity, the importance of the rules-based order, and the need to keep the Indo-Pacific a “free, open, inclusive region”—all core pillars of the Trump administration’s “Free and Open Indo-Pacific” vision and signals of opposition to Chinese hegemony. Modi also promoted a vision for regional connectivity at odds with China’s Belt and Road Initiative, which India stood alone in opposing until Australia, the U.S., and several European nations began voicing their own concerns in late 2017. Regional connectivity initiatives, Modi declared, must be based on “consultation, good governance, transparency, viability and sustainability. They must empower nations, not place them under impossible debt burden. They must promote trade, not strategic competition.”
In contrast with the praise he offered for the U.S., Japan, Korea, Australia, ASEAN, and others, Modi struggled to put a positive spin on bilateral ties with China. “No other relationship of India has as many layers as our relations with China,” was the most charitable characterization he could muster. It reminded me of former Foreign Secretary Nirupama Rao’s description of China-India ties as, “complex, but growing variegated in texture and substance.” Yes, Modi also recognized the two countries have “displayed maturity and wisdom in managing issues and ensuring a peaceful border.” He curtly observed: “Trade is growing.” While that’s true, bilateral trade, once an area of strength, has become a growing point of contention as India’s trade deficit with China has ballooned in recent years. In mid-June, we learned India’s deficit with China grew a stunning 23% in 2017-2018, setting a new record at $63 billion out of roughly $90 billion in total trade.
This piece originally appeared in ChinaFile