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17 May 2013, Gateway House

Moving on from Ladakh

India-China relations can enter a new chapter if bilateral negotiations progress beyond a talk show, and move the focus from borders to business linkages.

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When Indian Prime Minister Manmohan Singh and Chinese Premier Li Keqiang meet on Monday in New Delhi, India and China will project to the world that the two economic marvels — with a combined GDP set to surpass the G7’s by 2025 [1] — are back to business as usual across their contested borders. Certainly, Ladakh will lurk in the shadows of the symbolic meetings. But India needs to put it on the table and demand a genuine stability in relations.

India is scrambling to decipher — or not fully disclosing —- Chinese motives behind a 19-km military intrusion and camp beyond the Line of Actual Control (LoAC) last month in Ladakh. The military move was timed about a month after a once-a-decade leadership transition in Beijing and one month before Li’s visit, his first overseas tour as Premier. In some ways, the 21 day-crisis from April 15 to May 6, has been as revealing on the future dynamics of Asia’s biggest territorial tug-of-war, as the entire last decade of opaque and inconclusive negotiations between India and China.

First, we now know that both nations are working toward ‘an early date’ to settle their boundary dispute left unresolved since 1962. This is a positive step if both sides can get it right. But neither  has shown readiness for a land swap and an exchange of maps. Neither is prepared to alter the status quo or agree on the actual length of the disputed border. Regular boundary negotiations between an Indian and Chinese Special Representatives each are kept behind closed doors.

Indians and Chinese — the world’s most two most populous societies whose nationalist sentiment is key to clinching a mutually acceptable border deal — both deserve clarity on what’s going on. Even well-populated border regions such as Arunachal Pradesh are unaware when and how their maps will be redrawn. Since 2005 China has strongly reasserted its claims on Arunachal Pradesh and its Tawang monastery town as China’s Southern Tibet region on its official maps, media reports and e-passports. Backing down on that will be difficult for Beijing. So China is preparing its domestic mass base to consider its foreign policies favourably by passing on the buck for spoiling relations to India and the Indian press. Global Times, a state-run tabloid, published an editorial saying ‘the Indian government ought to clarify the so-called ”intrusion” in a timely way and assume the responsibility of maintaining a good atmosphere’ and not indulge ‘Indian media habits.’ [2]

Such recent reports in Beijing paint India as provocative and China as a peace-maker, and signal China’s unwillingness to even consider Indian concerns or accept responsibility for destabilising bilateral relations. Strategic distrust on both sides will remain entrenched as border talks move up to the next level. With the 19-km intrusion, the People’s Liberation Army (PLA) has sent India and its own leadership in Beijing a message:  that territorial unification, and military muscle-flexing to achieve it, underscores China’s rise as superpower-in-waiting.

Chinese actions during the 21-day stand-off moved in a smooth, co-ordinated fashion at the military, diplomatic and official media level. In contrast, India was caught off-guard as China took the initiative this year to push for an earlier-than-expected border resolution. Several official Chinese statements emphasise an early date to resolve the dispute. [3] This is a change from the norm, where for decades, India and China have conducted formal relations on the implicit understanding that a final resolution of the boundary dispute is years or decades away. Chinese opinion-makers have been indecisive as well, divided in favour of either shelving the dispute to improve overall relations and economic ties, or executing a swift resolution to move on from history.

Either way, the Ladakh crisis has reinforced above all that economic relations hold the key to Sino-Indian stability. India and China, after all, make for tantalising trends; their consumers combined will spend $10-trillion annually by 2020. Beijing is flush with hundreds of billions of dollars to invest in foreign markets from Asia to Africa. Chinese investments in power and telecom have swooped down on India but India has made limited inroads in the Chinese market to sell software, medicines and hi-tech goods since Indian companies entered China almost a decade ago. Bilateral trade hit $66.57 billion in 2012 — in China’s favour — with an Indian trade deficit of $29 billion. [4] India’s negotiation with Li has to go beyond a talk show and press for longer-term stability on the bilateral economic front and reciprocal market access.

Chinese Premiers typically make foreign visits to ease strategic tensions with one-time procurement trips and investor-delegations waving multi-billion dollar deals.  The last time a Chinese Premier visited India in December 2010, both sides managed to defuse a crisis that lingered for almost two years. Beijing toned down its challenge to Indian sovereignty on Jammu and Kashmir, which was evinced through discriminatory stapled Chinese visas issued to Indian residents of the state, after New Delhi assertively refused to reiterate its one-China policy on Tibet. Li is coming to look for signs of that assertive emerging India when both sides discuss the next big deal on the border and business.

Reshma Patil is Associate Fellow, East Asia Studies, Gateway House: Indian Council on Global Relations. Follow her on Twitter @reshmapatil11 

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[1] Johansson, Å., et al.  (2012), “Looking to 2060: Long-Term Global Growth Prospects: A Going for Growth Report”, OECD Economic Policy Papers, No. 3, OECD Publishing. doi: 10.1787/5k8zxpjsggf0-en Accessed on May 16, 2013.

[2] Global Times. (2013). New Delhi bears brunt of border hysteria. Retrieved from website: Accessed May 17, 2013.

[3] Wei, W. (2013). Five basics to handle our border differences. Retrieved from The Hindu website: Accessed on May 17, 2013.

[4] Embassy of India, Beijing, (n.d.). India-China Bilateral Relations. Retrieved from website: Accessed on May 17, 2013.