India-China relations

The Brahmaputra,also known as the Yarlung Tsangpo in Tibet, the Siang/Dihang River in Arunachal Pradesh, and Luit, Dilao in Assam, originates in the Manasarovar Lake region, near the Mount Kailash, flows through South Tibet, India, and Bangladesh.
The construction of Dams over Brahmaputra River in Tibet region has raised concerns among Indian side. It has been a long-standing part of the grand South-North Water Transfer project conceptualised as early as in the 1950s by Mao Zedong.

Both the countries are among the highest populated, together constituting 37% of world’s population.

Important points from Historical interactions:

1. The Brahmaputra agreement between China and India is a suboptimal arrangement within broader bilateral relations. China has thus far agreed to share hydrological data on the Yarlung Tsangpo/Brahmaputra (YTB) during the monsoon season. Further cooperation on water, however, is in a state of a deadlock. The agreement, at best, is a piecemeal discount offered by China.
2. Discussions over the YTB have often been overshadowed by the border dispute.
3. Departing from the past, China’s approach to trans-boundary water sharing is shifting towards multilateral arrangements. Eg. In 2015, China signed the Lancang-Mekong Cooperation (LMC) framework.
4. China is cooperating more with Bangladesh on water issues. China charges approximately $125,000 for the data it provides to India; at the same time, it sends similar data to Bangladesh for free. China could well be aiming to encircle India to reach a deal on the sharing of YTB that favours China’s objective of economic expansionism.
5. Indian approach to the YTB issue is influenced by developmental imperatives and domestic politics. India’s own water diversion plans – the national river interlinking project – Bangladesh and Pakistan have criticised India for being hypocritical in its approach with China. India tends to play the lower riparian card to gain sympathy from its domestic political constituencies, especially of Assam and Arunachal Pradesh.

Environmental concerns:

6. Flooding in states like Assam and Bangladesh affecting flora and fauna in prominent national parks like Kaziranga which is home to some of the critically endangered species.
7. Himalayan belt is prone to frequent earthquakes.

Brahma Chellany: Northward rerouting of the Brahmaputra waters (known as Yarlung Tsangpo in Tibet) from the Tibetan borders through constructions of dams would lead to drying up of river downstream in Assam and Bangladesh.

Nilanjan Ghosh: Water flows in arid Tibet are much lower than in the Indian side. Most of water to Brahmaputra comes from Indian monsoon and tributaries of Indian rivers so even with Zangmu Dam there isn’t much water for China to divert.

India’s Plans:

1. It needs to clearly envision the desired end goal and strategic outcomes for dealing with impending water conflicts.
2. It needs to de-emphasise China’s role for the time being and restrengthen its relationship with Bangladesh. It needs to push the impending Teesta river agreement and restore its image as a responsible upper riparian.
3. India needs to mirror its strength and firmness in negotiations with China on water rights, as it did in the case of the Doklam stand-off and in opposing the Belt and Road Initiative, rather than projecting itself as a victim.

Both the countries must work towards not just preserving the environment and restoring ecological balance but also to sustainably use the water resources for its abundant population.

China forms an integral part of the global supply chain, and India too is heavily dependent on Chinese imports, ranging from a variety of raw materials to critical components. China accounted for over 5% of India’s total exports in financial year 2019-20 and more than 14% of imports.

According to data from 2019, a staggering 70% of electronic components, 45% of consumer durables, 70% of Active Pharmaceutical Ingredients (APIs), and 40% of leather goods come from China.

Products such as fertilizers are 76% cheaper, electronic circuits 23%, and data processing units around 10% cheaper if made in China.

Debt-trap diplomacy is a theory that describes a powerful lending country or institution seeking to saddle a borrowing nation with enormous debt so as to increase its leverage over it. Debt-trap diplomacy was associated with Indian academic Brahma Chellaney, who promoted the term in early 2017.

How does China’s debt trap diplomacy work?

1. To gain rapid political and economic ascendency across the globe, China is dispensing billions of dollars in the form of concessional loans to developing countries, mostly for their large-scale infrastructure projects.
2. These developing nations, which are primarily low- or middle-income countries, are unable to keep up with the repayments, and Beijing then gets a chance to demand concessions or advantages in exchange for debt relief.

What concessions are demanded by China?

1. Sri Lanka, for instance, was forced to hand over control of the Hambantota port project to China for 99 years, as it owed massive debt to Beijing. This allowed China control over a key port positioned at the doorstep of its regional rival India, and a strategic foothold along a key commercial and military waterway.
2. In exchange for relief, China constructed its first military base in Djibouti. Whereas Angola is replaying multibillion-dollar debt to China with crude oil, creating major problems for its economy.

What are these concessional loans granted by China?

1. The ‘concessionality’ factor is achieved either by offering interest rates that are below the market rates or leniency in the grace period, and often with a combination of both.
2. These loans generally have long grace periods.

Has India taken any loans from China?

1. India has not entered into any loan agreement directly with China.
2. However, it has been the top borrower of Asian Infrastructure Investment Bank (AIIB), a multilateral bank wherein China is the largest shareholder (26.6% voting rights) and India the second (7.6% voting rights) among other countries.

How is the debt trap affecting India, then?

Most of India’s neighbours have fallen prey to China’s debt trap, and ceded to China’s $8 tn project – One Belt One Road Initiative (OBOR) which seeks to improve connectivity among countries in Asia, Africa and Europe.

Many nations have ceded control over strategic sea ports which can affect India’s regional security.

China through OBOR can increase India’s political cost of dealing with its neighbours because Kashmir, which India considers its part is also used in OBOR by Pakistan.

Kautilya, the famous India theorist on statecraft, suggests it is important to monitor and contain the activities of the state’s “enemy” and its diplomacy through engagement and cooperation rather than war.

Brahma Chellany, India’s leading China expert, writes in The Japan Times: “Indeed, by working to establish its dominance along the major trade arteries, while instigating territorial and maritime disputes with several neighbors, China is attempting to redraw Asia’s geopolitical map.”

In The Times of Central Asia, James Dorsey informs that a leaked long-term plan for China’s massive $56-billion investment in Pakistan exposes the goals of Beijing’s One Belt, One Road initiative as a “ploy for economic domination, the creation of surveillance states, and allowing China to influence media landscapes.”

Kautilya, the famous India theorist on statecraft, suggests it is important to monitor and contain the activities of the state’s “enemy” and its diplomacy through engagement and cooperation rather than war.

Steps by India:

1. New Delhi has been promoting Japanese investment in the Iranian port of Chabahar.
2. Indian efforts towards joint India–Japan Asia–Africa Growth Corridor are aimed at checking China’s OBOR initiative, though it is no match to BRI.
3. India plans to step up foreign diplomacy by highlighting poor returns and debt trap issues.
4. New Delhi is also actively involved in Quad involving USA, Australia and Japan. It aims to deter China’s control over South China sea and collectively reduce trade imbalance with China.

BRI is a global infrastructure development strategy adopted by the Chinese government in 2013 to invest in nearly 70 countries and international organizations.

For India, BRI is a plan to dominate Asia, warning of what some analysts have called a “String of Pearls” geoeconomic strategy whereby China creates unsustainable debt burdens for its Indian Ocean neighbors in order to seize control of regional choke points.

“India does a lot with China in the multilateral arena for its own reasons,” says CFR’s Alyssa Ayres.

What does China hope to achieve?

1. BRI serves as pushback against the much-touted U.S. “pivot to Asia”.
2. Promoting economic development in the western province of Xinjiang, where separatist violence has been on the upswing.
3. Restructure the economy to avoid the so-called middle-income trap.

New Delhi’s Concerns:

India has repeatedly said it will not join BRI because it does not offer a level playing ground to the country’s businesses. It has also opposed BRI because a key component – the China-Pakistan Economic Corridor (CPEC) – passes through PoK.

China’s engagement with India’s immediate neighbors through these corridors threatens to alter existing power dynamics in the region. Eg: port of Hambantota, which the Sri Lankan government was forced to lease to China for ninety-nine years in 2017.

1. China may run afoul of accepted international standards and norms;
2. BRI would undermine Indian sovereignty claims on disputed border territories and other security interests, especially vis-a-vis China and Pakistan;
3. BRI will lead to China wielding greater geopolitical influence and undue economic and diplomatic leverage over the policymaking decisions of India’s neighbours in ways that disadvantage India.
4. BRI is not based on principles such as good governance, rule of law, and transparency. It also suggests the initiative creates unsustainable debt burdens in some recipient countries.

Potential Advantages for India from BRI:

1. BRI would provide a way to help finance the country’s domestic infrastructure projects. The economic benefits India could accrue might be especially pronounced in the northeastern part of the country.
2. BCIM corridor would lead to huge infrastructure boost in the N-E India which has been historically neglected.
3. India could access easy connectivity to Central Asia that would lead to better trade relations with those countries.

India can take steps as in:

1. New Delhi must invest in and develop its strategic assets—like the Andaman and Nicobar Islands, for instance—to project power across the Indian Ocean.
2. India will likely maintain bilateral collaboration with countries like Japan while also remaining engaged with entities like BIMSTEC and the Bay of Bengal community, of which China is not a part of.
3. India must not only respond to the changes Chinese engagement is prompting in its neighborhood but also collaborate with partners to further its vision of regional connectivity, while accounting for its own capacity and resource limitations.
4. New Delhi must seek help from partners like Japan when necessary to build and upgrade its infrastructure and create an alternative to Chinese-led connectivity corridors and infrastructure projects.
5. Countries like Australia, France, Germany, the UK, and the United States are keen to see India play a leading role in the region. With collaboration like QUAD (USA, Australia , Japan along with India) India can deter Chinese aggression in South East Asia to an extent.