12.01.2022 Author: Vladimir Terehov

What Point has the Development of the Sino-Indian Relations Reached by the End of 2021?


The state of affairs in the direction of China-India of the “Greater Asian Triangle” (China-India-Japan) has no less influence on the development of the situation in the Indo-Pacific region than everything that happens in the China-Japan duo. Moreover, there has been hardly less negativity in the political component of the Sino-Indian relations of the last two or three years than in the Sino-Japanese ones.

If we restrict ourselves to a generalized indicator of the volume of trade between India and China, then it would seem that the “Asian paradox” is present here. It is related with the opposite situation in economic relations among some of the leading Asian countries and the state of political relations between them.

But in this case and the aforementioned generalized indicator of protection, a very noticeable characteristic, negative for India, is sewn up, associated with the fact that China sells various kinds of products to India 3-4 times more than it spends on purchasing the products in India it needs. That more or less adequately reflects the ratio of the economic development of the two Asian giants. This characteristic results in India’s annual losses of approximately $ 40 billion.  It was until recently a third of the total deficit of its foreign trade. It seems that in mid-2021, there was a tendency to correct this long-standing trend, but, again, in general, not in trading with China.

Note that the situation of its trade with the main geopolitical opponent of China, that is, with the United States, looks much more favorable for India. With the same approximately total volume (about $ 90 billion), 60% is in India and only 40% in the United States. Curiously, the same pattern is found in Vietnam’s trade with China and the US. It is difficult to say whether this general situation is the result of Washington’s focused strategy in trade with both of these regional opponents of the PRC, or whether it is being designed “by itself,” that is, without any political intent.

Apparently, considerations related to the prospect of receiving even more significant losses in the event of the lifting of customs restrictions on trade with China played a decisive role in the decision of the Indian government to refuse from participation in the Regional Comprehensive Economic Partnership (RCEP). The Agreement establishing RCEP was signed in November 2020 by 15 parties, of which two-thirds had ratified it by the end of 2021. This ensured RCEP coming into power at the beginning of 2022. Potentially, RCEP could become the world’s largest free trade zone over time. Again, so far without India.

There can be little doubt that the same factor in India’s complicated political relations with China was present in Narendra Modi’s decision. The definition of the term “politics” is somewhat rubbery, but it includes rather specific elements. For example, mutual territorial claims are quite distinctly noted in Sino-Indian relations.

Along with the relative “trifle” present throughout the entire length of the Sino-Indian border (the size of which again depends on who and how evaluates it), two disputed territories are pretty noticeable in terms of area. India claims the part of the former principality of Ladakh, which the PRC now controls. At the same time, the current Indian state of Arunachal Pradesh, which is twice as large in area, is called Southern Tibet (or Zangnan) in China and is considered illegally torn away at the beginning of the last century by the administration of the then “British India”.

Attempts undertaken for decades to draw a border, finally acceptable for both countries, have so far proven unsuccessful. Meanwhile, the lack of resolution of this problem only in recent years has already twice (in 2017 and 2020) brought relations between the Asian giants to the brink of a large-scale military conflict. The very existence of a territorial problem prompts opponents to follow with particular attention what each of them is undertaking in its administrative, legislative and practical aspects.

So, in India, China’s approval of the new land border law was received with caution at the end of October last year. The law entered into force on January 1, 2022. Indicated in pretty general terms, it raised questions in Delhi regarding the geography of its application.

India also reacted to the second case (the first took place in 2017) of the “standardization” in Chinese characters, Tibetan and Roman alphabet of the names of several zones in Arunachal Pradesh, a state in India. The Global Times reported it at the end of December last year, referring to the “sovereignty and history” factors. This time, eight residential areas, four mountains, two rivers and a mountain pass were subjected to “standardization.” The official reaction of the Indian Ministry of Foreign Affairs was quite expected to this action.

In turn, China is watching with no less caution the continuing functioning of the 14th Dalai Lama and the so-called “Tibetan Parliament-in-Exile.” There were reports that representatives of the local 100,000-strong Tibetan diaspora serve in the Indian border troops and even take part in clashes with Chinese border guards.

So far, there are also some Indian-Taiwanese contacts at the unofficial level, which, among other things, testify to the expansion of the geography of India’s political presence in the international arena. However, there is much greater evidence. Like, for instance, India’s participation in two “Fours”. Of these, the first one includes the US, Japan and Australia, the second one is the US, Israel and the United Arab Emirates.

These configurations jointly cover almost the entire ITD, and there are signs of mutually competitive positioning of India and China throughout the region. In particular, it is becoming more visible in Afghanistan and the Central Asian sub-region, in general.

In this regard, the meeting of the foreign ministers of India and five Central Asian countries (Tajikistan, Uzbekistan, Turkmenistan, Kazakhstan and Kyrgyzstan) held in Delhi on December 18-19, 2021, attracted attention. The commentary of this meeting in Indian Express appeared under the notable heading “India is keeping an eye on Central Asia.” The main initial thesis of this commentary was the statement of “the bailout of the Central Asian region by the Taliban who seized Afghanistan” into the space of increasing competition between the leading world powers. And among them, the PRC is undoubtedly taking a leading position in terms of influence on Afghanistan. This is cautiously perceived both by India (whether it is valid or not is a separate issue) and, at least, by some Central Asian countries.

Equally noticeable was the invitation of the leaders of the countries that took part in the said Dialogue in Delhi to become guests of honor at the upcoming main national holiday, Republic Day, which is annually celebrated on January 26. Note that such invitations are exceptional and are intended to demonstrate the special attention of the Indian leadership to a particular country. The President of Russia and the US President were once guests of honor (Vladimir Putin in 2007 and Barack Obama in 2015).

Finally, it seems evident that Russia needs to use all the available (not very large) potential to positively impact the development of relations between the two Asian giants.

The “price paid” is too high due to various vectors of transformation of these relations.

Vladimir Terekhov, expert on the issues of the Asia-Pacific region, exclusively for the online magazine “New Eastern Outlook”.


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