India Foreign Minister Says China Talks Are Work in Progress
Jaishankar was speaking to investors and analysts at the Bloomberg India Economic Summit.
(Bloomberg) -- Military and diplomatic talks on troop disengagement amid India’s worst border tensions with China in four decades are “a work in progress,” India’s Foreign Minister Subrahmanyam Jaishankar said.
The border confrontations between Asia’s largest nations that flared up in May are “expressions of larger structural challenges” that have long reflected in security and trade tensions between the two rising economies, Jaishankar told investors and analysts at the Bloomberg India Economic Summit Thursday.
“I’m not minimizing the seriousness of the situation on the borders with China,” he said, adding that “the first rule of my business is don’t predict what’s still going on.”
Jaishankar and his Chinese counterpart Wang Yi pledged in September to de-escalate tensions along their disputed 3,488-kilometer (2,167-mile) boundary known as the Line of Actual Control. Twenty Indian soldiers and an unknown number of Chinese troops were killed in clashes along the Himalayan frontier in June.
The military crisis is the worst since the two sides fought a war in 1962, with gunshots fired for the first time in more than 40 years.
Trade Tensions
The tensions have also been reflected in trade relations, the minister said, citing India’s lack of access to Chinese markets despite improved trade relations. China was India’s largest trade partner until recently when it was overtaken by the U.S.
“If the foundations of the relationship are disturbed, you can’t be impervious to the fact that it will have consequences,” Jaishankar said, adding that the real question is: “Can a rising China and rising India find an equilibrium? And what you are seeing at the border is an inability to meet that challenge.”
India is rethinking its existing trade arrangements and is pushing for reforms that can help rebuild its economy while participating in creating resilient supply chains with other nations, he said.
Quad Nations
Jaishankar earlier this month traveled to Tokyo to meet with foreign ministers of four of the Indo-Pacific region’s biggest democracies -- the so-called Quad grouping -- seen as a counter to China’s influence in the region at a time when tensions between Beijing and the U.S. have risen over Chinese territorial claims across Asia and in contested waters of the South China Sea.
The forum is not an “us versus them” arrangement, Jaishankar said, noting it allows India to consult on concerns like maritime security, connectivity and counter terrorism.
Beijing has made clear its opposition to Washington’s “Indo-Pacific strategy” which was conceived to elevate India is a potential regional counterweight to China.
Supply Chains
India, along with the U.S., Japan and Australia is seeking to build stronger supply chains to counter China’s dominance. New Delhi wants to offer supply chain resilience to companies moving out of China as trade and geopolitical tensions escalate amid worsening uncertainties worsen in the post-Covid 19 world.
The South Asian nation needs more investments as economic uncertainties mount amid slowing growth. The world’s largest lockdown imposed at the end of March, caused the Indian economy to contract 23.9% in the June quarter from a year ago. Authorities have failed to get the pandemic under control since then, with the number of coronavirus cases exceeding 7.3 million, second only to the U.S.
Prime Minister Narendra Modi’s government in March announced incentives for electronics manufacturers to boost trade. About two dozen companies pledged $1.5 billion of investments to set up mobile-phone factories in the country.
“India’s own thinking about deeper global economic engagement with the world will be influenced by both the geopolitical divides and the pandemic pressures,” said Jaishankar. “The attention could now well shift to becoming part of global value chains rather than entering into more formal trading arrangements.”
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