India, China agree on better ties, but border tensions still persist

The agreement between India and China following Foreign Secretary Vikram Misri’s meeting with Chinese Vice Foreign Minister Sun Weidong on the course of bilateral relations must be treated with cautious optimism. The outcome is in the nature of testing the waters, focusing on closer people-to-people contact, including the easing of visa services, the resumption of flights between the two countries, and restarting the Kailash- Mansarovar Yatra this summer. This agreement follows the diplomatic pathway established by the meeting between Prime Minister Narendra Modi and Chinese President Xi Jinping on the sidelines of the Brics summit in Kazan in October last year, the first since the 2020 Galwan clash. The gains were seen soon after with the completion of the disengagement process and the start of de-escalation in eastern Ladakh and, finally, in December, the holding of border talks between the two countries’ representatives.

 

The language and tenor of the statements issued by both countries suggest a new cordiality five years after incursions by China along the Line of Actual Control in Ladakh. That resulted in a virtual ban on Chinese investment as well as the popular TikTok short video service. Timed to coincide with the 75th anniversary of the establishment of diplomatic relations between the two countries, the statements spoke of closer people-to-people exchanges, including media and think tank interactions to create mutual awareness and trust. This is a welcome change but the current rapprochement must be seen in the context of the Donald Trump presidency. Both countries are struggling to accelerate growth, and Mr Trump’s threats to impose tariffs on exports to the world’s largest market will crimp their economies further. Rapprochement between Asia’s two large economies can be regarded as a circling of the wagons against American economic threats. Despite hostilities, China remains India’s largest trading partner with India’s imports from China surging even as exports have shrunk, causing the trade deficit to balloon to $85.06 billion in FY24. But Chinese direct investment in India has been crimped by government restrictions. Though selective investment has been permitted on a case-by-case basis, it is notable that lifting the investment ban did not figure in this latest agreement.

 

If there are doubts about the durability of this latest thaw, they arise from the Chinese playbook of the past 11 years. Both Mr Xi and Mr Modi have visited each other’s country twice — the former in 2014 and 2019, and the latter in 2015 and 2018. Each visit was followed by an escalation of Chinese incursions — Demchok, Chumar, Doklam, and Galwan — along the northern borders and persistent claims on parts of Arunachal Pradesh. It is notable that earlier this month the chief of army staff spoke of the need to take a “whole of nation” approach to ensure that a Galwan-like incident was not repeated. No less significantly, India has registered its protest against China recently creating two counties in the Hotan prefecture, incorporating territory India claims. There are also reservations over the dam that China is building on the Tsang-Po, the upper Brahmaputra, though the statement referred to the provision of hydrological data and other cooperation on trans-border rivers. China’s discomfort with India’s American tilt, including its Quad security alliance, also remains unaddressed. So how far the two nations are willing to overlook these substantial differences in their broader national interests is an open question.