There is simmering anger all over India over the bloody brawl by the Chinese on the Indo-China border in Ladakh that killed 20 Indian soldiers and injured many others. It was a planned operation as the Chinese were to retreat to their previous positions after border disputes racked both the armies in mid-June.
In the last 45 years, not a bullet has been fired but that is a misnomer. There have been numerous border skirmishes and unsubstantiated claims over Indian land both in Ladakh and Arunachal Pradesh.
These incursions and false claims cannot be ignored anymore. India has to stand firm and call out the bullying by China.
Tension and scuffles on the Indo-China border are far from over. As China balloons into a $14 trillion dollar economy, it wants to flex its muscles and move towards its geopolitical ambitions of being the world’s powerhouse and workshop. It has expansionist designs and is exhibiting it.
Since 2008, China has systematically pushed for global domination wanting to replace the prime position held by the United States.
India should not have been caught by surprise. Incursions have been going on for a long time as China wants to take control of strategic areas and positions on the 3,488 km border with India to gain a strategic advantage.
The immediate irritant for China was the completion of the Darbuk-Shyok-Daulat Beg Oldi Road on the Indian side which is strategically important in case of conflict as India would be able to easily move troops to the border.
Galwan is suddenly being claimed to be a part of China as they realize that it is strategically crucial. More recently, there were intelligence inputs of how Chinese troops were gathering with heavy equipment on its border with India. Even when talks were going on for disengagement after 20 Indian soldiers were killed in a bloody scuffle with barbed wire rods and stones, Chinese troop movements continued. The heavy equipment is ostensibly to construct camps and probably even change the course of the Galwan river.
China must be checked. The recent conflict showed China that India cannot be taken for granted and will do everything it can to defend its territorial integrity.
As the Covid-19 pandemic rages all over the world, China used the opportunity to attack India. It is flexing its muscles with India, Taiwan, Indonesia, Malaysia, Vietnam, Japan, and even Australia in a concerted attempt to reassert itself. Australia suspects that China is targeting it with cyberattacks. India has warned leading government institutions to be on the lookout for cyberattacks from China, especially in the power sector.
Though talks of de-escalation are going on, the Chinese have moved hundreds of soldiers along with heavy construction equipment into the Galwan valley. Simmering tensions are showing that de-escalation is not going to be as fast as we want.
The Indian army, navy, and air force have been put on operational alert. Ultimately, India needs a hard-nosed strategy to tackle China. India must not give in to its moves to usurp land in either in Ladakh or Arunachal Pradesh with its fake claims just because there is no clearly demarcated border.
There have been a lot of emotional reactions to boycotting Chinese goods. Sounds good. But in reality, it will make little difference to China? Twelve percent of India’s imports come from China. Seventy percent of India’s drug needs come from China. Most phones used in India are either made or assembled in China. India accounts for just three percent of China’s exports. Does it make sense to call for a ban on Chinese goods when trade with India is minuscule for the Asian giant?
China is India’s biggest trading partner after the United States. Chinese investment in India is currently about 6.2 million dollars. Alibaba and Tencent have invested in companies like Zomato, Paytm, Big Basket, Flipkart, Byjus, and Ola.
India has recently amended its Foreign Direct Investment laws to prevent foreign (read Chinese) takeover of Indian companies. Italy has also done that after Covid struck and Chinese companies showed interest in taking over numerous Italian enterprises.
India is presently dependent on China for raw materials used in medicines. Pharma imports from China go to make nearly 80 percent of allopathic medicines in India. For antibiotics like cephalosporins, azithromycin, and penicillin, India’s dependence on China is almost 90 percent!
This must change.
When the Covid pandemic hit India, prices of material used in drugs skyrocketed accentuating the dangers of leaning on to one country for the raw material. Just around twenty years ago, India was producing key ingredients used in antibiotics and fermentation products. Today, it imports about 70 percent of the active pharmaceutical ingredients. It is time for going back to the past.
While it might sound politically right to say that Chinese products should be shunned. But, is it practical when many spare parts that are used in the Indian manufacturing process comes from China? Immediately cutting it would completely paralyze Indian industry and make it go into another spiraling economic crisis. It takes time for any country to set up its own infrastructure to produce what it is now importing. India can do it if it starts today, but it will take a couple of years to say that we do not need raw materials and finished goods from China. It cannot be done with just an emotive slogan.
India might succeed in physically disengaging with China in Ladakh with successful diplomacy. But economically disengaging will not be that easy as India’s economic infrastructure now is dependent on China. It has allowed that to happen in the last forty years. We did not bother when numerous small manufacturing units closed as it could not compete with cheap imitations from China. A growing economy like India will have to keep its options open and act carefully to tread differently into the future while building its economy and looking at the idiom of self-reliance.
India should not expect external help in tackling China. The world is beset with problems and no power is interested in the border skirmishes in Ladakh. They will also not want to rub China the wrong way. Predictably, when the conflict was going on, the world looked the other way. There were just sterile comments from leaders saying that the two countries must talk and resolve differences. It is difficult for most of the world to take a stance against China as it has allowed China to make heavy investments and is under its debt.
Look at the Belt and Road Initiative (BRI) of China that seeks to link it with various parts of the world. It shows how deftly Xi Jinping has used statecraft to globally spread China’s economic and political influence. Nearly 60 countries that constitute two-thirds of the world’s population have shown an interest in the “String of Pearls” network hoping that it will give them an economic fillip as transportation and movement becomes easy. All these countries will have to take Chinese loans to build the BRI. If they cannot, China will bargain to take over its assets as compensation. China plans to invest over one trillion dollars in the coming few years and has already spent over 200 billion dollars on the project. Ultimately it is estimated to cost over eight trillion dollars.
China also is eyeing the fact that once the belt is ready it can ensure its fuel supplies can move on routes that the US Military cannot stop.
The European Union was silent on the Chinese incursion as several countries in central and eastern Europe have accepted Chinese funding of the BRI. European states like Italy, Luxembourg, and Portugal have also shown readiness for the BRI projects. Italy is now wary of Chinese designs to take over its limping firms after the economic paralysis due to Covid. It is changing its laws to restrict the free flow of Chinese investment. Russia was also a willing partner of BRI. Ironically, Russia’s economy is today just one-eighth of the size of China. Borrowing governments now realize that China set a clever debt trap.
India has not been a part of the BRI as it sees the project as China’s ploy to choke countries when they are battling unsustainable debt situations and are forced to helplessly give way assets to China. India saw how China offered 85 percent of the finance to build a huge port at Hambantota in Sri Lanka at a cost of $ 361 million. As Sri Lanka could not pay the loan after it was ready, it had to lease it out to China for 99 years along with 15,000 acres around it. It has raised security considerations for India as it is just a few hundred miles from its coast. If there is an armed conflict, the port will likely be used to attack India.
China has also financed 30 other ports in various parts of the word. Many of them are in Africa where China has huge economic interests.
One important takeaway from the latest conflict on the border is that just one leader meeting another and exchanging hugs does not lead to peace or stability. It takes a lot of diplomatic tight rope walking for two countries to adjust and understand each other to work towards cooperation and advancement. Modi’s typical style of personal bonding, photo ops, and optics have not worked as that is not the way diplomacy pans out. He even kept late Sushma Swaraj out of his foreign jaunts though she was the external affairs minister. She had little to do. It was all about Modi and his diplomatic forays. He made nine visits to China. Four of them were made when he was Gujarat’s chief minister. It was touted that Modi had built a special relationship with China and Xi.
When Modi and Xi were sitting on a swing on the banks of the Sabarmati river in Ahmedabad discussing bilateral relations, there was a major intrusion by Chinese troops in Ladakh. This was in September 2014. We should have learned from that lesson. The Chinese were sending us a signal. It is just a few months back that Modi hosted Xi in scenic Mamallapuram in Tamil Nadu in another high-profile meeting to discuss ties.
China has already needled India by getting Nepal to redraw its borders with India claiming hundreds of square kilometers. Indicatively, Pakistan guns boomed on the Kupwara sector soon after the Galwan Valley standoff happened. If there is an armed conflict with China, it will definitely get its trusted ally, Pakistan to open another front in the western sector to keep India fighting two countries at the same time. We need to be ready.
India must confabulate with the world and seek its support while diplomatically keeping communication lines alive with China. It is important to accept China has clear cut expansionist designs and is a real threat. India cannot anymore afford to give in to Chinese tactics. It is a time for India to reset relations with China and the world.
If India has to be respected it has to become a robust self-reliant economy. But investors will come only if they see an India that has promise. They will want the ease of doing business, communal harmony, and political stability. Investors do not invest in economies that are embroiled in internal conflict. Communal peace is something they would look at. Now, little is being done on that front though there is the rhetoric of how India will become a $5 trillion economy in another four years. Investors would love to look at India as an alternative to China especially after the Covid crisis. India has a lifetime chance now to become the newly emerging factory in the world.
To begin with, India should start encouraging the Indian industry to compete with China by creating the necessary environment. Presently, 85 percent of toys sold in India are from China. Most dolls in the market are Chinese. Surely, we can also make them and hundreds of other products. Just examining how much we depend on China for various products could give us a jolt. But that shock is necessary to make us realize that the sooner it is done, the better. Self-reliance should not taper of as an empty slogan like Make in India did.
First published in Indian Currents, June 2020