Xi and Modi: Continuity in Sino-Indian relations

On 17 September, President Xi Jinping, as part of a broader trip around South Asa, began the first Chinese visit to India since the election of Prime Minister Narendra Modi. Laying the groundwork, Indian Vice President Hamid Ansari had travelled to Beijing in June, followed by National Security Advisor Ajit Doval in early September; China’s foreign minster had also been in Delhi.

Xi’s arrival was rich with symbolism, as the trip began not in Delhi, as would be typical, but instead into Ahmedabad. This is the commercial capital of Modi’s home state, Gujarat, viewed by many – though not all – as a model of development for the rest of India, by some measures the most economically free state in India, and still frequently invoked by Modi in his foreign diplomacy. But, remarkably, even as Xi arrived, a major border standoff was underway, involving 1,500 Indian and 1,000 Chinese troops in the Ladakh region at 'eyeball to eyeball distance', belying the overt bonhomie between the two leaders and underscoring the limits on the bilateral relationship.

The Economic Narrative

Given these limits, it is understandable that both leaders would choose to focus on economic ties. Although, as Tanvi Madan points out, bilateral trade fell from $74 billion in 2011 to $65 billion last year, the commercial narrative glosses over underlying border disputes and regional competition, and reinforces Modi’s twin foreign policy focus on development and regionalism.

From inviting the leaders of the South Asian Association for Regional Cooperation (SAARC) countries (including Pakistan) to his high-profile inauguration, to making Bhutan and Nepal his first foreign destinations, to resolving a maritime border dispute with Bangladesh (albeit as part of a legal process that preceded his government), Modi has given admirably sustained and high-level attention to the India’s immediate periphery, something that the previous government valued in theory, given the appallingly low level of intra-regional trade, but neglected in practice.

This regionalism has a broader pan-Asian component. Modi also decided to visit Tokyo (in September) before Washington (later this month), emphasising that the engagement of the Pacific beyond the Indian Ocean would be paramount. More specifically, the lure of future Chinese investment – a purported, though probably exaggerated, $100 billion over the next five years – has considerable economic value given India’s massive infrastructure needs, and little political downside, notwithstanding analyst Nitin Pai’s measured warning that Beijing seeks to use such investments as carrots and sticks.

The Curious Case of the Maritime Silk Route

The commercial narrative also suits China, which has been selling its proposal for a 'Maritime Silk Road', a high profile but nebulous initiative to recreate a historic Chinese trade route through the Indian Ocean by developing maritime infrastructure and setting up free trade zones. During a visit to India last week, I found that most Indians continued to be baffled by the whole idea and slightly irked at China’s reluctance to provide more details. One Indian naval officer has suggested that the scheme is a way for China to 'soften' and re-brand the much-maligned 'string of pearls', and the director of India’s National Maritime Foundation has dismissed it as 'essentially a Chinese ploy'.

It was therefore with unfortunate timing that the Maldives, which Xi also visited this week, decided to hand to a Chinese a firm a $500 million infrastructure project which had earlier been in Indian hands – this coming just after announcements of big new Chinese projects in Sri Lanka. India’s imperative for regional connectivity and inward investment clash, here, with its ingrained suspicion of China’s long-term intentions on land and at sea.

This is a structural problem that transcends Modi and Xi, and it will continue to give Sino-Indian commercial ties an awkward, tense edge – something that is obviously absent in the official pronouncements, but more than visible in any Indian newspaper. Full-throated Indian endorsement of the maritime silk is therefore unlikely, particularly as India appears to be scrambling to turn a pre-existing cultural project for the Indian Ocean, Project Mausam (meaning ‘Season’), into a copycat initiative.

India’s own pivot to Asia

More broadly, Xi’s visit also has to be seen in the context of Modi’s engagement with both Australia and Japan, both US allies concerned about the implications of growing Chinese power and assertiveness. Modi signed a long-awaited and landmark civil nuclear agreement with Australia. Although he could not finalise a similar deal with Japan, his visit to Tokyo did yield progress on the bilateral defence relationship, including a Japanese sale – and possible co-production, as well as mutual export – of the US-2 amphibious aircraft. In recent weeks, the Indian government has also been hyperactively leaking that India is in the 'advanced stage' of talks to sell Vietnam the supersonic BrahMos cruise missile, which was jointly produced with Moscow. India and Vietnam, which the Indian President was visiting in mid-September, also signed a pointed statement on freedom of navigation in the South China Sea and agreed a $100 million line of Indian credit for defence deals.

India is therefore fostering a web of commercial and military ties across the region, the sort of 'middle power coalitions' that Rory Medcalf and Raja Mohan have described in their recent paper, while prioritising economic interaction, avoiding the language of containment or even balancing, and resisting what might be mistaken for 'a bloc-based Asian order with alliances and counter-alliances'. These relationships don’t just strengthen India’s regional influence; they also force China to court India more intensively, as it did in the decade after the US-India rapprochement. The trick is in getting the balance right, diversifying and upgrading India’s Asian relationships as much as possible, without provoking a Chinese reaction or getting dragged into others’ disputes. There is an on-going debate with India over how far to go, with those prioritising economic engagement with China ranged against those emphasising the importance of standing up to Chinese assertiveness.

 On the whole, this points to continuity. It is notable, for instance, that after years of condemning the Congress-led government for pusillanimity in the face of Chinese border incursions – and there is no shortage of videos where Modi gleefully mocks Congress’ purported Sinophilia – this government has acted in identical fashion in the face of the latest standoff, preferring to resolve it at the tactical level, and to do so quietly while Xi is in town. For now, it is clear that Modi is fine-tuning Indian foreign policy, not recasting it.