New-look India-China ties in 2015?

In 2015, India-China relations may move to the fast-track as the two countries start implementing a multi-point agenda that was put together over the course of 2014. The agenda will re-energise ties by increasing bilateral trade and Chinese investments in India, along with a resolute push to resolve the long-standing boundary dispute.

The year 2015 is expected to begin with the 18th round of boundary talks in New Delhi, where the National Security Advisor (NSA), Ajit Doval, will be India’s new Special Representative for border negotiations. He will replace former NSA Shivshankar Menon, who, along with his former Chinese counterpart Dai Bingguo, did a lot of the groundwork to start the process of resolving the dispute.

The meeting in January between Doval and Yang Jiechi, China’s Special Representative, could offer an unprecedented opportunity, arising out of the new political dynamism in India and China. Prime Minister Narendra Modi has a majority in Parliament, and President Xi Jinping has emerged as a strong leader, heading the party, the government, as well as the army. With these two leaders it might therefore be possible to generate the much-needed political support for any agreement on the border dispute.

Menon himself has added to the prevailing optimism about this possibility. In a meeting with Dai earlier in December at Peking University in Beijing, Menon remarked that the two countries can now quickly resolve the vexed boundary dispute because their governments have strong mandates to reach an agreement:

“…we have a moment we can actually do it today. I think all the technical work has been done by Dai Bingguo and his Indian counterparts… this boundary can be settled. It is time we settle, the quicker we do it, the better,” Menon said at the meeting.[1]

Dai, who has participated in 15 of the 17 rounds of Special Representatives’ talks since they were established in 2003, was equally optimistic: “I believe the boundary issue will be addressed sooner or later, when conditions are mature… if we deal with it properly, we can enhance mutual trust and create a favourable environment for bilateral relations,” he said.[2]

Other strategic analysts on both sides share the perception that such a window to muster support for any agreement that is aimed at resolving the dispute did not exist earlier, especially under the coalition governments in India.

Finding a solution

India and China agreed to a three-stage process when the boundary talks started in 2003.  They first agreed on the Guiding Principles and Political Parameters for the settlement in 2005. They are currently trying to finalise a framework of settlement. The final stage will be the drawing of the mutually-accepted boundary line.

As part of the framework of settlement, the two sides are likely to begin clarifying their positions on the nearly 4,000-kilometre Line of Actual Control.  A lack of clarity on this demarcation has been one of the main reasons for aggressive border patrolling by both sides, as well as periodic incursions

It has also been suggested that the the two sides could work out agreements sector-by-sector. While China claims Arunachal Pradesh as a part of southern Tibet, India contests Chinese claims on the western sector, including the area of Aksai Chin, occupied by China since the 1962 war. It is now up to Doval and Yang to take this dialogue forward.

Modi in China

In addition to the ongoing border talks, other bilateral exchanges are likely to take the relationship forward in 2015.

Modi is expected to visit China around April 2015. He will inaugurate the second route of the Kailash-Manasarovar pilgrimage though Nathu La pass in Sikkim. This is particularly significant because it will enable Indian pilgrims to directly travel by bus to Mount Kailash in Tibet without having to trek or go on mules.

Importantly, Modi’s visit is also expected to set the stage for the implementation of some of the key agreements reached during Xi’s visit to India in September. One of the most promising areas of cooperation is the railway sector. A high-level Indian Railways team held in-depth discussions with its Chinese counterparts in Beijing earlier in December about the modalities for a feasibility study of a high-speed train route along the Chennai-Delhi corridor.  China is eager to push its bullet train technology abroad, and the survey is likely to begin in 2015.

India and China are also expected to begin to identify the technical inputs required to increase the speed on the existing railway line from Chennai to Mysore via Bangalore. This could set the tone for upgrading the tracks all over India.

Meanwhile, the first batch of 22 (of 100) Indian Railways officials began training in Jiaotong University in Shanghai this month, in heavy hauling of freight. The two countries also plan to collaborate to set up India’s first railway university.

Modi’s visit to China is also expected to expedite the $20 billion investments—promised during Xi’s visit—in the two Chinese industrial parks to be set up in Gujarat and Maharashtra.[3] This will be a significant milestone for economic ties between the two countries—China has so far invested less than $500 million in India.[4]

The new investments will also balance the trade relationship: New Delhi sees the investments as a way to offset the huge trade deficit of $36 billion a year.[5] India-China trade was worth about $65.47 billion last year.[6]  This is the final year the two countries have to work to meet the official bilateral trade target of $100 billion[7] fixed during Chinese Premier Li Keqiang’s visit to India in 2013, followed by the then prime minister Manmohan Singh’s visit to Beijing the same year.

The year 2015 will be important for India-China relations, with a packed agenda covering both trade and security. Taking it forward will depend on the vision and strength of the Modi-Xi leadership.