India China border issues – How can India maintain balance between conflict and trade relations? Is make in India a solution even as raw materials are supplied by China?

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The fierceness of Chinese aggression has become explicit not only to India but also to the rest of the world. India – China border tension has been continuing since decades but the recent clashes between both the troops in Ladakh has damaged the bilateral relationship from its core. A new question of China specific policy is in the mind of Indian diplomats.

Beside current pandemic, due to border issues bilateral trade has declined at its lowest as well as India’s deficit in bilateral trade is also lowest. Government of India has imposed extra duty on Chinese imports besides some Chinese apps has been banned. Government has amended FDI policy to prevent Chinese companies from acquiring huge stake in Indian market at a very lower cost.

It is very much evident that China is both militarily and economically stronger than India but as of geopolitical experts both the country will not go to a direct war as both holds nuclear power. China’s intention is to dominate Asia and to prevent India from becoming closer to US.

Balance between conflict and trade relations : India suffers huge trade deficit in India – China bilateral trade. Preventing China from accessing huge market of India is to hit China economically as a measure of retaliation against aggression. It may affect Indian industries in reverse as our 70% industrial inputs come from China. But we have to take a stringent step and this is an opportunity for native start-ups to grow in their full potential in this tough time.

China’s fear of blockade of Malacca strait by Indian Navy is another factor here. From current situation the theory of appeasement in respect of China is proved to be wrong. Being an open market Delhi cannot resist imports but we have to reduce dependence upon China by Made in India products.

Trade war has become a trend of tactics in strategic diplomacy. New Delhi is in full mood to send a clear message to Beijing that it will not bear any strain on its sovereignty and territorial integrity. If Beijing accelerates aggression in the Himalayas, India will increase its presence in the South China Sea with US, Japan and ASEAN. Make in India products to replace dependence on China will take near about 5 – 6 years on instant basis and in this journey we need help from Japan, EU, US etc. How this journey will be carried is yet to be clarified by government.

Solution : In the campaign of self reliant India we are concerned about Chinese imports. Well its fine. But what about US, Japan or South Korea? This campaign in its true sense will consume near about two decades but in present circumstance to tackle China we need foreign help.    

Raw materials for Make in India : In order to replace China from industrial inputs in India we have to take following steps :

  • Mining policies to be eased with proper regulation
  • Fast conduct of Deep Ocean Mission
  • Fast completion of Chabahar port to import minerals (e.g. Uranium, Lithium) from Afghanistan
  • Sufficient liquidity to start-ups and existing companies.

Besides these, workers with proper technical skills are also required as manufacturing of electronic device is not same like manufacturing of PPEs. We have to complete infrastructural projects to attract FDI. Replacement of imports by production of raw materials is possible obviously with stringent policies and timely investment. India is blessed with resources, what we need is political will and proper strategy to use it. 

India has witnessed many tough times in its history and every time it has become stronger. This journey will not be easier at all. Both government and private sector will have to run through various challenges because somewhere we have to be independent to fulfil our ambition of a $5 trillion economy. No one is permanent friend or permanent enemy in geopolitics. Equation can be changed in wink of an eye. New Delhi must be prepared for any further events like this.    

-Shuvajyoti Dutta