This article first appeared in CNBC TV-18 on December 28, 2020 and can be accessed here.
2020 began with high expectations and hopes on most fronts. And none were more hopeful than the people pitting for an upswing in India-China relations. 2020 marked the 70th anniversary of the setting up of relations between India and China. The Indian embassy in China had even planned* 70 events to commemorate the significant milestone. But over the last twelve months, the Sino-Indian relationship has shifted course in ways that few would have anticipated.
As Ambassador Nirupama Menon Rao puts it, “It is unfortunate that in this 70th year of the establishment of diplomatic relations between them, peaceful coexistence has been replaced by armed coexistence.”
The COVID-19 pandemic, coupled with the Galwan valley clashes, has led to Sino-Indian relations' lowest point in recent years. The deaths of hundreds of soldiers at the border, the adverse public opinion in both countries towards the other, and the Indian ban on Chinese apps and investments marks a significant shift in relations. While China would like to continue business as usual, normalising other aspects of the relationship, India has moved away from its previous policy of expanding cultural and economic relations.
Before this year, the Modi government engaged China through informal diplomacy—arranging meetings between the leaders at Wuhan, Mamallapuram, and the sidelines of other multilaterals. But the Wuhan Spirit has taken an entirely new meaning with the pandemic. In contrast, the Mamallapuram Spirit has ground to a halt.
For 2021, the Indian establishment will have to contend with the way forward for relations between the two countries. This needs to happen on multiple layers.
Domestically, the Indian public opinion has been firmly raised against China; however, this antagonism can often be counterproductive as people do not understand foreign policy's nuances. Anger about border tensions puts pressure on the Indian government to take a “strong” stance. Another aspect is the economy - India’s flailing economy will dent its power unless the government can address unemployment problems, negative GDP growth, capital investments, and low consumer spending. These will affect India’s power on a global stage and reduce India’s standing unless India can demonstrate its potential to play an important role in Asia.
On a bilateral front, it is evident that tensions at the Line of Actual Control (LAC) are here to stay. While military-level talks continue, the roots of the border conflict remain disputed and changing according to the narratives of both governments. India wants to return to the status quo ante. Still, China continues to covertly change on-ground realities - a strategy similar to the one it carries out in the South China Sea, by building artificial islands.
How to deal with the possible escalation of tensions at the LAC is what the government will have to contend within 2021. On the economic aspect, India’s banning of apps, cracking down on Chinese investments has led to a flight of companies mainly in the tech-startup space. How does a country balance concerns of government interference, security threats, and much-needed investment? India can look to how other countries like the US and Europe are dealing with the issue so that these measures do not hurt its people.
Finally, on the international stage, the pandemic has led to the weakening of international institutions and globalization. India has backed out of the Regional Comprehensive Economic Partnership (RCEP), citing domestic apprehensions. Still, it will need to anticipate the opportunity costs that will accrue over the long term. On the other hand, how initiatives like Quad will evolve is another exciting feature. With Joseph Biden taking the US Presidency, India will need to calibrate its policy towards China depending on the shifts in US policy.
2020 has been a challenging year, and it is most evident in the field of Sino-Indian relations. What India needs to do, now more than ever is to build a community of people who understand China and advise policymakers to take the country forward in a new decade.