Positive strokes

Li Keqiang said the right things, but India should be cautious

The visit of the prime minister of the People's Republic of China, Li Keqiang, to India this week was as successful as such trips can be expected to be. Mr Li and Prime Minister Manmohan Singh had, apparently, a "frank exchange of views" - diplomats' language for tough talk on the border issue. After all, the Chinese premier's visit came at a time when tempers had not died down in New Delhi over the fact that a platoon of People's Liberation Army soldiers pitched tents on what India perceived as its side of the Line of Actual Control in Ladakh - and very definitely within an area where customary practice was to build no shelters that smacked of permanence. Addressing reporters in New Delhi, Mr Li said that both sides had to make the various border-related mechanisms "more efficient". He did not shy away from saying that there were "problems in certain areas", but conveyed a belief that broad-minded approaches to solving those problems would yield results.

Economic relations continued to be the driving force for bilateral relations. The two counties have been rapidly expanding trade - but on China's terms at the moment. Two-way trade was worth $68 billion in 2012-13, but India's trade deficit with China was $28 billion of that, a 125 per cent increase over what it was two years earlier. Naturally, this needs remedying in some way. China's premier made all the right noises about market access for Indian companies. Corporate India has found it difficult to break into the Chinese market; information technology companies have struggled with tax laws and visa regulations, on which, too, there was an assurance from Mr Li that the rules would be eased. Other dynamic sectors, such as pharmaceuticals, have had similar problems with business-related regulations. It remains to be seen whether the various co-ordination committees that the two prime ministers announced, particularly the one where Indian and Chinese chief executives meet to discuss business in each other's countries, will work. India's services exports were, at least, name-checked explicitly in that a working group is due to be set up in order to increase market access to China's manufacturing-heavy economy. This is a crucial time for Indian companies to look at the Chinese market, as that giant economy rebalances itself away from investment-led growth to consumer-led growth; the government must help them grasp the opportunity.

However, on much of these issues, Mr Li's words must be met with action. While his candour came as a pleasant surprise to many in New Delhi, it is also true that Chinese leaders in the past have been more than affable even as their country changes the facts on the ground adversely for India. There were little hard concessions on offer. Indeed, what emerges from the Chinese premier's visit to Pakistan - China's "iron brother", according to Mr Li, where he went immediately after leaving India - will perhaps be a clearer indication of China's real intentions than anything its leaders say in New Delhi. The United Progressive Alliance government has tended to minimise the impact of difficult issues in India's relationship with China, and has indulged instead in rhetorical flourishes about solidarity. Mr Li's trip brought forth many assurances to improve Indo-Chinese relations, but it is far from clear how long India would have to wait before those assurances are fulfilled.