India must give up Chinese paranoia

China’s expansive policies and increasing economic activities in the region of South Asia, particularly in India’s neighbourhood states, have called for immense attention from, and encapsulated tensions among, Indian policy-makers and diplomats alike.

Is it time for India to shrug off its Chinese paranoia that it has been grappling with — more distinctively — since India’s nuclear tests in 1998 with then prime minister A B Vajpayee signalling China as the reason for its nuclear test.

With an escalating Indian obsession regarding Chinese policies and economic activities in the neighbourhood, it becomes vital to ponder Beijing’s bilateral strategies and regional aspirations. As can be observed, since the end of the financial crisis of 2008-09, China’s strategy has undergone a perceptible change. The other defining alteration has been the coming to power of Xi Jinping.

Moreover, China’s grand strategy — expanding its strategic as well as status interests — in south Asia has, in a decisive manner, guided its economic policies in this region.

In the South Asian region, India has harboured concerns over China’s overwhelming presence, as revealed through the ‘String of Pearls’. In such a scenario, it is also worth noting that China has drawn on its ‘myth making machine’ to acquire profound leverage in its regional ties.

Initiatives such as Belt and Road Initiative, Maritime Silk Route and financial arms such as AIIB and SCO have aimed at expanding Beijing’s strategic and economic footprint. In this analysis, focus is laid on two major countries in South Asia where both India and China have had a looming presence: Nepal and Bangladesh.

Nepal: India has cashed significantly on its ties with Nepal, and for most part their bilateral relationship has been a success story. In the recent past, India’s support in the aftermath of the devastating earthquake boosted its image in Nepal.

India has larger stakes there, primarily with the three major hydro-power projects that have been making significant progress. In addition, India has engaged simultaneously with the political ambit in Nepal.

Meanwhile, China has stepped up its activities in Nepal, investing massively in infrastructure development. With a capacity to invest three times more than that of India, China has shown signs of increased attention towards domestic activities in the country.

Bangladesh: Indo-Bangladesh ties have seen renewed vigour since Sheikh Hasina assumed power in 2009. Initiating proactive trade ties – with extensive lines of credit – and collaboration on hydro-power projects, both countries have explored each other’s strengths to the full. However, China’s influence has been overwhelming, not least through investments in infrastructure and aid. Almost 80% of Bangladesh defence material comes from China.

In the software aspect — inclu­ding as a provider of key services such as education and training — India has a unique advantage. In the hardware sector, even though limited to upgrading railways, waterways and electricity, India faces comparatively less competition from China.

India has also taken a key interest in converting loans into grants, supporting the Bangladesh government’s financial arm. In both strategic and economic terms, Bangladesh has made huge leaps in improving relations with India — it remains to be seen how India leverages these opportunities in a manner conducive to both states.

Trusted partnerships
Most of these nations share physical borders with India, facilitating imports from it with low transaction cost. Furthermore, India’s strong domains such as services, including education and training, face less or minimal competition from Chinese players.

In this scenario, India urgently needs to expand its sphere of influence — from reacting to China’s activities to reflecting on its own economic and strategic imperatives. Drawing robustly on successful projects such as those in Afghanistan and Bhutan, India needs to emphasise on building sustainable and trusted partnerships with countries in its neighbourhood.

Trade has perpetually occupied China’s focus as a strategic issue. China’s modus operandi for expanding trade relations with states has deliberately emphasised buying off the political elite in the country concerned. In countering such strategies, New Delhi needs to focus on building trust as well as generously investing in those states with greater strategic import.

In adequately developing the region, India will stand to gain immensely. As its income-generating potential increases cumulatively, the growth and development of individual countries will also be positively affected. In doing so, India should proactively pursue ambitious projects and choose those that are well thought-out, planned and executed.

To bolster regional connectivity, adequate investment in infrastructure is a prerequisite on which India has been seriously falling short. To complement this, effective ministerial reforms in the domestic sector also needs to be undertaken, emphasising time-focused implementation of policies.

Both India and China stand to gain vastly by pursuing projects which enhances regional development without endangering trust or mutual respect between nation-states.

(The writer is a researcher at the Observer Research Foundation)