Border clash is a “tipping point” in India-China relations, says ambassador

The India-China border clash that killed 20 Indian soldiers will be a “tipping point” in bilateral relations between the two Asian giants, a former Indian ambassador to China told CNBC.

A “violent clash” in the Himalayas occurred on Monday last week along the border in the Galwan Valley in Ladakh, where soldiers from India and China have been locked in a clash since May.

While India said both sides suffered casualties, China did not disclose how many of its soldiers died during the clash. The encounter It sparked concern and soured public sentiment even as the two nuclear powers moved to reduce tensions.

“This is definitely a turning point in bilateral relations, but I would not call it a breaking point,” said Nirupama Rao, who served as India’s ambassador to China between 2006 and 2009.

Speaking to CNBC’s “Street Signs” on Wednesday, he said there were indications that the two countries had a constructive discussion and tried to disconnect from the disputed areas. Still, he said, escalating violence, unseen in decades, casts a “long shadow” on the relationship.

On Tuesday, the Chinese Foreign Ministry said the two sides agreed to take steps to ease tensions.

Commercial and investment ties

In recent weeks, anti-China sentiment in India has grown, and people have called for a boycott of Chinese products in the country. But experts say it will be difficult for India to suddenly cut or reduce trade and economic ties with its neighbor.

“India’s exposure to China is asymmetric in terms of trade and investment,” said Radhika Rao, an economist at Singapore’s DBS Group, who is not related to the ambassador.

“China displaced the European Union to emerge as India’s largest importing partner six years ago,” he said on Tuesday. Note.

India can only be expected to protect and safeguard its interests in what is emerging as a very sensitive situation in the bilateral relationship.

Nirupama Rao

former Indian ambassador to China

India imported more than $ 62 billion in goods from China between April 2019 and February this year, and exported only about $ 15.5 billion in products, according to data from the Indian government.

According to DBS’s Rao, the majority of India’s imports from China are manufactured goods, such as electronic and electrical equipment, along with organic chemicals. He explained that China also has notable portfolio investments in India’s tech sector, with startups like Paytm, Ola, Swiggy and Zomato, all backed by Chinese investors.

New Delhi had already introduced restrictive measures on Chinese foreign direct investment before last week’s border crash.

An Indian Army convoy passes through Gagangeer on a road leading to Ladakh on June 22, 2020 in Ganderbal, India.

Waseem Andrabi | Hindustan Times | fake pictures

“As far as trade, economic and investment relations are concerned, there is now a very complex intermix network between the two countries,” Ambassador Rao said, explaining that decoupling or disconnecting China is not an easy task. It comes despite growing public calls for India to do something to better balance its economic ties and preserve its national interest.

He added that steps will likely be taken to curb the Chinese presence in areas that affect India’s security, in fields such as telecommunications and critical infrastructure.

India’s relationship with the allies.

Experts have said that the latest dispute with China will likely bring India closer to the United States, Japan, Australia and the countries of Southeast Asia.

India’s foreign policy has remained largely strategically autonomous, which means that Prime Minister Narendra Modi’s government has to balance bilateral relations with the United States, as well as with China and Russia.

The border clash may potentially convince India to break its decades-long practice of trying not to be connected to any specific alliance structure that opposes Or in favor of a third country, Rodger Baker, Stratfor’s senior vice president of strategic analysis, told CNBC’s “Squawk Box” on Wednesday.

“If you strengthen India’s ties with Australia, with Japan, with the United States, with the Quad, then that is a risk to the Chinese of what happened here on the border,” he said, referring to the informal alliance between the four countries that aim to promote a free and open Indo-Pacific region.

Ambassador Rao said that if India pursues closer ties with the United States, it may cause concern since China “tends to be insecure about these things.”

“But India can only be expected to protect and safeguard its interests in what is emerging as a very sensitive situation in the bilateral relationship,” he said. “Even as we promote and seek strategic autonomy, we will have to review and reconsider how our relationships with the rest of the world are shaped.”

Indian Foreign Minister Subrahmanyam Jaishankar met Tuesday with his counterparts in Russia and China virtually, saying: “Respecting international law, recognizing the legitimate interests of partners, supporting multilateralism and promoting the common good are the only way to build a lasting world order. “