21 April 2015

Why India needs to reformulate its China policy

Brahma Chellaney

The hype over Prime Minister Narendra Modi’s China visit next month is likely to obscure the underlying strategic dissonance and tensions between the world’s two most populous countries on issues extending from land and water to geopolitical aims.

Two issues stand out: An increasingly asymmetrical trade relationship and a gradually rising pattern of Chinese border incursions in several regions since 2006, when China for the first time claimed Arunachal Pradesh as ‘South Tibet’.

India-China commerce constitutes one of the world’s most lopsided trade relationships: China’s exports are 3½ times greater in value than its imports, and it buys mainly primary commodities from India but exports value-added goods to it. For example, China’s steel producers find India an easy dumping prey, with Chinese dumping of steel items rising almost fourfold under Modi’s watch in 2014. New Delhi, by tamely allowing China to rake in growing profits through such trade, in effect funds the Chinese strategy to encircle India.

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