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#5195, 29 November 2016
Modi’s China Policy: Between Rhetoric and Reality
Niharika Tagotra
Research Intern, IPCS

Prime Minister Narendra Modi’s policy towards China can be best described as a balancing act displaying elements of pragmatism and realism. India has sought closer ties with countries like the US and Japan, but has simultaneously also displayed its willingness to accommodate Chinese interests in the region. After the initial euphoria over the prospects of strengthening the bilateral ties, Modi’s China policy has been remarkably re-shaped by the changing ground realities, with the Indian establishment waking up to the dangers of moving too fast and too soon on its China policy.
The bilateral relations between the two countries under Modi have taken the slow yet steady route. Modi himself has agreed that while India can “speak to China eye-to eye,” the objectives of foreign policy lay not in “changing mindsets” but in “finding common grounds for converging interests.” This careful deliberation of interests with a hint of realpolitik is also reflected in India’s stance over issues of critical importance to China. For instance, while India has been more assertive in demanding a peaceful resolution to the South China Sea (SCS) dispute, in May 2016, it refused to hold joint patrols with the US in the region. It also explicitly ruled out its participation in any such future patrols. This, however, was in stark contrast to India’s participation with the US and Japan in the trilateral naval exercise held in June 2016 in the West Philippine Sea, treading dangerously close to the SCS region. This could be read as a sign of India’s assertion of its dominance over the Indian Ocean, while simultaneously respecting China’s interests in the SCS. Modi during his recent US visit also gave reassurances that by pointing out that China should not be “demonized” in view of the developments in the India-US bilateral ties.
Beyond the strategic sphere, India has been even more accommodating towards China in the economic sphere. Under Modi, there’s been a growing emphasis on demarcating India’s core strategic interests from its economic interests. This is an acknowledgment of the fact that while India benefits from aligning with the US in the strategic sphere, economically, its regional interests resonate more closely with those of China. India has pushed for deals worth $22 billion with China, despite the growing trade deficit. India’s push for strong economic ties with the country stems from the complementary nature of the two economies. That Delhi sees its economic ties with China as vital to the country’s growth can be ascertained from India’s particularly cooperative attitude towards the China-led multilateral economic initiatives such as the Asian Infrastructure and Investment Bank (AIIB) and the New Development Bank (NDB).
The Pakistan conundrum has, however, cast a long shadow over the India-China ties. India’s opposition to the China-Pakistan Economic Corridor, in view of the threat it poses to India’s strategic interests in Pakistan Occupied Kashmir, as along with China’s attempts to block the UN ban on Jaish-e-Mohammed Chief Masood Azhar highlights how the Pakistan factor has further complicated India-China relations. India has been unable to clearly factor in China’s interests in Pakistan as a part of its own China policy. While the rhetoric over the issue has been high, the response by the current Indian establishment has been remarkably muted. There have been attempts to delink Pakistan from India-China ties, but Modi’s back and forth on the ties in view of the developments in the China-Pakistan relations has caused a certain degree of ambiguity.
The present regional security scenario presents India with a range of very complex policy options. China’s attempts at widening its regional influence can substantially threaten India’s core strategic interests, which primarily include a strategic pre-eminence in the South-Asian region, and control of the energy and mineral resources, and the sea lines of communication. Any ambiguity in spelling out its strategic choices will cost India a lot of manoeuvring space in the future. Moreover, in order to benefit from the bilateral economic relations, India will also need to de-link its economic engagements with China from its security interests. Growing bilateral economic interdependence can potentially blunt the more contentious aspects of the relations. This is also the policy that China has been following in its engagement with the US. Despite the usual rhetoric that the two countries engage in over the SCS region, the trade ties between them run deep, hovering around $562 billion in 2013. China is currently the third largest export market for US while the US is China's largest export market. This has given China a substantial amount of strategic space with respect to the US, an approach that holds important lessons for India. 
The organic continuum of India-China relations will also be of much significance in the changed geo-political scenario. With the change of regime in the US, the balance of power in the Asia-Pacific could see significant alteration with smaller states in the region possibly bandwagoning with a more assertive China. This will, in turn, have important consequences for India, which will now need to re-think the regional implications of its global alliances and recalibrate accordingly. The India-US relationship and the US’ China policy, both of which are poised for changes under the new government, will also impact India’s China policy. In the face of changing times, India will need to wait and watch for the events to unfold in the next few months. Until then, the best strategy for India would be to tone down the public rhetoric against China, and look for possible avenues of economic cooperation, while pursuing more robust strategic alliances with the other states in the Asia-Pacific region.

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