India should, indeed, loosen its self-imposed shackles in relations with China, especially on the three troublesome subjects – trade, Taiwan and Tibet

by Dilip Sinha 

Parliament’s standing committee on external affairs has expressed concern that the Indian government’s “conventionally deferential foreign policy” towards China is not being reciprocated. This is a rather late realisation.

In the 1950s, China took full advantage of India’s refusal to oppose its territorial expansion and annexed Tibet without any opposition. Its current aggrandisement continues to be matched by India’s reticence.

But China has been careful not to antagonise India too much. It has selectively followed its calculated policy of ‘hide your strength and bide your time’ so as not to open too many fronts at the same time.

China, in fact, has been assiduously cultivating India ever since US President Donald Trump rattled it with his unpredictability and a trade war. Faced with this threat, China swiftly abandoned its Doklam-style confrontation with India and replaced it with wooing Prime Minister Narendra Modi, leading to the two-day summit with President Xi Jinping at Wuhan.

In an article in an Indian daily last Thursday Chinese foreign minister, Wang Yi, laid down a five-point vision for 2019 that would do the framers of Panchsheel proud. He has talked of strengthening political trust with neighbours, safeguarding regional peace, and promoting domestic reform.

All this is unexceptionable, though a trifle overworked. More worrisome is his insistence on ensuring the success of yidai yilu, China’s cherished – but now increasingly controversial – Belt and Road strategy for expanding its global reach.

China’s economic slowdown is quite evident even from its own statistics. There are also reports of questions being raised among the ruling elite about Xi’s leadership style. In such an environment, it appears to have decided that it would be best to make concessions to the US on trade and prevent a full-blown trade war with its largest market.

Trump’s arm-twisting on trade has ensured a number of concessions from China, such as lower duties on American cars and buying more agricultural produce. But Trump has not stopped at trade.

Last week, he signed into law a bill pressing China to open Tibet to American visitors in return for allowing Chinese nationals to visit the US. China’s reaction to this is likely to be less accommodating.

India would do well to not lose such an opportunity for re-balancing its relations with its northern neighbour. The parliamentary committee has recommended adopting a “flexible approach” using all options, including its relations with Taiwan, but avoiding “adversarial posturing”. This is sound advice.

India should, indeed, loosen its self-imposed shackles in relations with China, especially on the three troublesome subjects – trade, Taiwan and Tibet.

China has used its clout as a permanent member of the Security Council to get several UN websites to depict Arunachal Pradesh as disputed territory. This is despite India adhering faithfully to the one-China diktat from Beijing. China’s staunch opposition has ensured that Taiwan remains the only major country in the world to remain outside the UN.

India has greater reason to worry about its trade deficit with China than the US. India’s trade balance with China is more skewed than US’s.

Both countries are able to export only about a quarter of what they import from China. But India does not have such compensating features as a surplus in trade in services and local sales by American companies manufacturing in China. China’s exports to India jumped 30 times since it joined the WTO in 2001, even though its global exports grew eight times during the same period.

India’s SME sector is in severe distress due to cheap imports from China. Our markets are flooded with Chinese goods, making a mockery of the government’s Make in India program.

On the other hand India’s exports to China, especially manufactured goods, continue to face tariff and non-tariff barriers. In the classic mould of colonial trade, China buys raw materials from India and sells it manufactured products.

The trade imbalance will never get corrected in such a pattern. The only jobs created in India will be of delivery boys carrying Chinese products to Indian homes for mega e-retailers. This is an unsustainable trade model fraught with serious social consequences for India.

Government’s current policy of addressing this trade imbalance is to encourage Chinese companies to manufacture in India. This is likely to bring some screwdriver assembly plants but it will not help revive Indian companies. Besides it will throw up long term security concerns.

China’s current conciliatory mood is a good time to press for immediate steps to correct the imbalance in bilateral trade and make relations with Taiwan more formal. It is also time to push the envelope on Tibet.

Tibetans in India have become the world’s most forgotten refugees. While India has been pressing Myanmar to take back its Rohingya refugees, it has been reluctant to discuss the issue of Tibetan refugees with China, let alone raise the issue of the autonomy of Tibet, the assurance on the basis of which India had recognised its annexation by China.

Government would do well to pay heed to the parliamentary panel report, drawing from its recommendations to reset relations with China.

The writer is a former diplomat