India and China are neighbours who embrace when they meet but roll their eyes when talking about the other to third parties. The Narendra Modi government’s policy works at two levels: Quietly critical of China at the geopolitical level but constructive on the bilateral agenda.
Prime Minister Modi is known to privately say he has a good working relationship with his Chinese counterpart, Xi Jinping. One consequence has been a 15% slide in border incidents. New Delhi has also relaxed barriers to Chinese investors. Cumulative Chinese FDI to India has more than doubled to over $2 billion since Modi came to office.
The big picture remains defined more by rivalry than partnership. While India has refrained from naming China, it has obliquely criticised Beijing’s snatch-and-grab in the South China Sea. Privately, Indian officials say Beijing’s assertiveness is a key driver of New Delhi’s renewed drive for influence in the Indian Ocean.
Pakistan remains an insurmountable obstacle. Xi has been upset at Modi’s refusal to endorse his flagship Belt-Road infrastructure programme. But with the biggest chunk of the Belt-Road’s first phase being built in Pakistan — and partly through parts of Kashmir claimed by India — a green light is impossible for Modi. India’s selective road, rail and power projects on its eastern border are, again, partly designed to provide an alternative to Belt-Road.
Modi has deliberately shifted closer to Washington and Tokyo on military matters — while avoiding direct confrontation with Beijing’s core interests. This follows an internal debate in his first year in office as to how India should leverage growing US-China friction. Modi concluded that past evidence showed Beijing took New Delhi more seriously when India played footsie with the US.
The need to play the US card flows, in turn, from China’s refusal to treat India as an equal partner. In Beijing’s hierarchical view of the world, say Indian officials, only the US is in the same bracket as China. India, with its much tinier economy, is several notches below. Beijing finds India’s claims to a Security Council seat laughable. It recently blocked India’s attempts to join the Nuclear Suppliers Group and, in multilateral areas like climate change and trade, is unbothered about breaking ranks with India and negotiating its own deals.
There is a long list of minor irritations that are now a constant in Sino-Indian relations. These include the sort of espionage concerns that lie behind the present visa imbroglio, arguments about how the boundary is depicted on maps and India’s treatment of its Tibetan refugee population. The two governments avoid making too much of these for fear of ultranationalists on both sides magnifying the trivial into the tectonic.
Hard-nosed and goal-driven, Modi and Xi are hardly material for a pan-Asian bromance. However, they are both sharply focussed on domestic revival. With so much else on their plates, neither sees any gain in letting relations become as tense and poisonous as they did in 2008-10.