US President Donald Trump may not yet win a Nobel Peace Prize for ending the Ukraine war, but perhaps he could apply afresh for making two other arch-rivals suddenly join hands.
Yes, India and China have seen a sudden thaw in their ongoing cold war for the last several years due to mitigating circumstances emanating from halfway across the world in Washington, DC. The US President’s antagonism towards India, manifesting in a spate of tariffs and penalties on India, has inadvertently sparked off Beijing and New Delhi to turn to each other, even if it is yet to be a full-blown embrace.
Because India is yet to forget what a pincer grip of an embrace it can be.
History is the best teacher, right from how ‘Hindi-Chini bhai bhai’ gung-ho of Nehruvian idealism crash, boom, banged on the slopes of the Himalayas in Arunachal Pradesh and across the borders in 1962, and how even later, Chinese troops were gulping down territory in Ladakh even as PM Modi hosted Chinese supremo Xi Jinping with good intentions. And less said about how the People’s Republic turned the recent India-Pakistan skirmish into a test and trial run for the new armaments it supplied Islamabad, the better.
“India-China trade is like walking a tightrope – the promise of lower costs and smoother supply chains pulls from one side, while the risk of dependency leaves the economy exposed if ties sour,” pointed out Chandrika Raghavenra, assistant professor – economics & international business at Great Lakes Institute of Management, Chennai.
Of course, one way of looking at it is as a new-age adaptation of that eternal Sun Tzu’s Art of War saying – enemy of my enemy is my friend. India-China twain only meets at the intersection of an intense displeasure with a common enemy, in this case, Trump’s America. Yet, for India, the current zeitgeist, after being left at the trade deal altar by the Americans, would be to play shy after getting bitten, but also play smart at it. Strategic autonomy is the operative word, with oodles of references to India’s pre-Cold War stance of Non-Alignment.
Of course, half the play is still aimed at the audience on Capitol Hill and Pennsylvania Avenue, as India’s sudden overtures to not just China, but Russia and even Brazil, can be viewed from the prism of negotiations that may have stalled, but will never really end. If Washington is threatening India with 50 per cent tariffs, and even doubling it as Trump’s trade advisor Navarro said overnight, or even if you look at the recurring threats on anything from H1B visas to tariffs on pharma and electronics, India could just be countering them with its own play-the-field playbook of cosying up to Washington’s rivals.
But what makes this power play different is that it is not just about diplomacy or geostrategy, but about real world trade, with its own real implications on economy, growth and the future. India finds itself caught between the devil and the deep sea, so the question is whether it will go for a devlish embrace or take the plunge into that deep sea – it needs the trade with the US that, in the long run, contributes at least a few percentage points to the GDP directly and indirectly, while it has a 100 billion dollar umbilical cord with China on trade and manufacturing that is hard to cut off.
“India’s trade-related outreach to China is as much a political issue as it is an economic one,” said Munish Sahrawat, president & dean of the Himachal Pradesh-based Shoolini Business School, “While cheaper Chinese imports can ease pressure on key industries, they also deepen India’s trade deficit and expose critical supply chains to a rival.”
What is the way out? For India, the immediate best-case scenario might just be to use the situation to improve its bilateral relations with China, indicating to the US that it will not cave under pressure, even while working the backchannels, perhaps, to work out a trade deal. Meanwhile, the last few months of trade mayhem has clearly shown New Delhi the writing on the wall it is yet to fully internalise – not only that you need to NOT put all your eggs in one basket, but perhaps, you need to use this crisis to finally bite the bullet of further reforms domestically. The question is, can Modi afford to, either which way.