Happymon Jacob
In the last decade, China emerged as India’s most consequential national security challenge, a reality that has become more pronounced since a deadly skirmish at the countries’ disputed border nearly three years ago. In June 2020, Indian and Chinese troops clashed along the Line of Actual Control (LAC) in the Galwan Valley—the worst such incident in decades. The standoff remains unresolved. As geopolitical tensions rise, China’s superior military strength and proximity to India enhance the intensity and immediacy of its threat.
India recognizes the danger China poses to its security, and the current Bharatiya Janata Party (BJP) government has taken some steps to meet the challenge—but it remains reluctant to publicly acknowledge them. Meanwhile, India has lost territory to China along their disputed border since the 2020 clash, and another border skirmish further east last December shows that its deterrence is breaking down. In addition to the BJP’s electoral considerations, New Delhi’s aversion to speaking openly about Beijing’s threat stems from a few factors, from the growing power differential between the countries to a lack of political will within the BJP.
For India, responding to Chinese aggression is not only a military question; it’s complicated by political and business interests that have led to incentive structures for New Delhi when it comes to deciding if, when, and how to counter Beijing. Ironically, the BJP’s culture of hypernationalism prevents it from purposefully addressing the threat emanating from China. But without a shift in approach, China’s looming influence is only likely to keep building.
In 2022, China’s GDP was close to $18 trillion, while India’s was less than $3.5 trillion. Last year, China’s defense budget was around $230 billion, more than three times India’s. This power differential provides China with a military advantage over India. But perhaps more importantly, India’s capacity deficit has secondary implications.
There is little clarity on how India’s strategic partnerships with the United States or major powers will come into play in the event of a standoff with China. New Delhi has no assurance that its partners will come to its aid, given their own trade dependence on Beijing and the absence of mutual defense agreements. The Quadrilateral Security Dialogue, or the Quad—comprising Australia, India, Japan, and the United States—is not envisioned to help member states during military crises. India should assume that its strategic arrangements won’t result in direct military assistance in a conflict with China.
Second, India does not have a clear plan for how to manage potential escalation with China if New Delhi does respond with force to Beijing’s so-called salami slicing strategy along the border. China is the superior power, creating a dilemma for India: It cannot escalate with the assurance of a win, and it cannot deescalate without losses. India last faced a superior adversary in a war six decades ago. Then, as now, the opponent was China—and there was a less-pronounced power differential. Today, the fight could easily escalate from a skirmish along the LAC to unfamiliar domains of cyber and hybrid warfare. New Delhi likely recognizes this possibility.
Economic logic also underpins India’s lack of acknowledgement of the threat from China. India has become the world’s fifth-largest economy in part with the help of cheap products sourced from China, from fertilizers to data processing units. Imposing a trade ban on Beijing in retaliation for its aggression at the border is likely to be counterproductive, as economist Arvind Panagariya recently pointed out in the Economic Times. During the 2021-22 fiscal year, Chinese exports to India accounted for 15.4 percent of Indian imports but just 2.8 percent of total Chinese exports. It’s clear that New Delhi would face greater losses than Beijing if it imposed sanctions.
Pressure from business interests likewise shapes India’s approach toward the China threat. The Indian government may recognize the political ramifications of China’s aggression on the border, but for the Indian business community China remains an unavoidable market opportunity. The business community’s perspective is understandable; products sourced from China are cheaper than those made elsewhere. The business community sees the resulting trade imbalance as the government’s problem; Indian business still profits. As a result, India and China have only furthered their trade relations despite growing tensions.
So India’s strategic interests and the interests of the business community are increasingly mismatched, and there is an apparent lack of consensus even within the government when it comes to the threat from China. Although India’s Ministry of External Affairs appears keen to push back against Beijing, other ministries are less enthusiastic. The Ministry of Commerce, Ministry of Railways, and Ministry of Science and Technology are reluctant to damage the relationship with China, compared to the Ministry of Defense or the Ministry of External Affairs. As the saying goes, one’s stance depends on where one sits.
The Indian military is realistic about the power differential with China, but it has said that it has options on the table and that India’s security agencies are exploring ways to meet the China challenge. The prime minister’s office remains silent on the issue; this lack of consensus makes it difficult for India to take a unified stance against Chinese aggression. All of this shows that the economic reality compromises New Delhi’s national security decision-making vis-à-vis Beijing. If India does decide to act against China, military victory may be out of reach; economic reprisal from Beijing is near certain.
At least some senior Indian policymakers see China’s aggression along the LAC in 2020 as a response to India getting too close to the United States, such as through its strengthened engagement with the Quad. Other officials and commentators think India’s efforts to improve infrastructure near the border led to the crisis. Either way, India’s lesson learned is that it should refrain from provoking China; even acknowledging the ongoing threat from Beijing could fall into the category of provocation in New Delhi’s eyes. As a result, India may continue to soft peddle with the Quad—avoiding any attempt at militarizing the Quad and naming China a common threat, for example.
Finally, the issue of political will within the BJP complicates India’s response to China. The ruling party is concerned about the cost of acknowledging the threat without standing up to Beijing. Given Modi’s overwhelming approval ratings in India and his ability to sell a master narrative, this may seem to make little sense. But Modi’s statement in the wake of the 2020 standoff that “no one has intruded into our territory” has created a commitment trap; it could harm him politically to go back on his words. Moreover, ignoring China’s actions on the border is less costly for the BJP government than acknowledging and not doing much about it. If the Modi government mentions the China threat, it will have to act against it.
Monocausal arguments attempting to unravel the puzzle of India’s underbalancing behavior toward China provide only imperfect explanations. It’s possible to understand New Delhi’s rationale from a policy perspective, but not openly calling out the Chinese threat ultimately ends up playing into Beijing’s hands. Unless India can break out of its overcautious self-restraint and tactical loop with China, the Chinese People’s Liberation Army forces will keep chipping away at Indian territory.
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