The border dispute between India and China is several decades old but it never reached the flashpoint that it did in 2020. Things catapulted downhill with extraordinary rapidity and well-near derailed relations. Indian External Affairs Minister, S. Jaishankar, acknowledged that tensions would not decrease, unless there was peace and tranquility on the border. Violent clashes between armed personnel led to casualties on both sides, triggering speculation that the volatile situation could spiral out of control. It is testimony to quiet and persuasive diplomacy that the process of disengagement has begun. More needs to be done through sustained confidence building initiatives, as it would best serve the strategic interest of both countries.

The timing is providential. Beijing is aware that when Donald Trump takes over as president, he will take a hardline approach and ask countries to cut tariffs and allow freer (and preferential) entry of American goods. China would certainly be targeted. In 2022, US exports to China were $151.1 billion, in comparison to Chinese exports of $551 billion to the US. Trump will certainly attack the skewed nature of this two-way trade. It is predicted that he would impose tariffs as high as 60 percent on Chinese goods, making the US market unattractive for Chinese exporters. This could effectively kill the US market for Chinese products. Beijing will undoubtedly retaliate and thereby, trigger a trade war.

Trump would also pressure other Western countries to follow suit and distance China on the trade front. Given the extraordinary reliance most of these countries have on trade with China, this would be an enormous challenge. Trump has already put the European Union on notice, saying that it would pay "a big price" for not purchasing enough American products. India, similarly, would also face pressure from the White House to open its market. Immunity from MAGA is not likely.

Time to reinvent relationship

But then, a perfect storm such as this, invariably creates opportunities. China would be forced to look at alternative markets and India would be a tempting proposition. Keeping safeguards in place for sensitive products, both Beijing and New Delhi need to explore how they might reinvent their relationship. Enhanced trade strengthens bilateral ties.

Furthermore, by opening the Indian market to external competition, production efficiencies and cost reduction would follow. The consumer would benefit. India’s critical misfortune is that for over seven decades, Indian business and industry has clung to the apron strings of government, pleading for protection against outside competition, so that they might continue to dish out substandard products in the domestic market. The net result has been the sacrifice of the manufacturing sector and its disinterest in modernizing and in conforming to international standards and becoming competitive. Consequently, the consumer has been forced to suffer inefficiencies and high costs. All this could undergo a transformative and fast-tracked shift and could enable Indian products to enter markets that China might be forced to vacate. 

The billion-dollar question is whether both countries are willing to rewire their approach towards each other and embrace the multiple opportunities that are waiting to be taken advantage of, not just through enhanced trade but also greater connectivity. Direct flights would be a no-brainer. Is it not surprising that two of the largest countries in Asia don’t have direct flights? This would not only boost tourism but also open-up an entirely new destination for Indian students wishing to go abroad for higher studies. After all, China has three universities in the top twenty QS global rankings. A step-by-step re-calibration of the relationship is clearly warranted.

Need for pragmatic approach

Enmity between Beijing and New Delhi is not to the advantage of either country. A less combative and adversarial approach is not a realignment of relations but of strategic interests.

At the same time, New Delhi needs to be cautious while dealing with China. Lessons from the betrayal Nehru suffered at the hands of China should not be forgotten. Beijing, under President Xi Jinping, has been openly hegemonic, and even, threatening towards smaller countries, such as the Philippines, Vietnam and Japan, especially on the South China Sea dispute. This is not likely to change. Nor indeed would Beijing give up its claims on Indian territory.

In such a scenario, closer engagement with Beijing, does not mean that New Delhi needs to abandon its call for open sea lanes and unhindered movement through the South China Seas, or its support to QUAD, or participate in the naval exercises in the Pacific, or disown His Holiness the Dalai Lama, or break trade and other contacts with Taiwan, to name a few. Each is critical to crafting India’s foreign and security policy towards China, the ASEAN, and the Indo-Pacific. They are all part of India’s strategic national interest, as is the acquisition of new and sophisticated weapon systems that act as a deterrent against adventurism by other countries. Two steps forward and one step backward appears to be a pragmatic approach towards Beijing. It is a language China would understand, perhaps, even respect.

A shift in India-China relations can be a global game changer.

(The author is a former Indian diplomat. Views expressed are personal.)