Diplomatic developments in the past two months indicate that India and China maybe coming to resolution of the impasse on the Line of Actual Control [LAC] persisting for the past four and a half years after China pushed its forces to occupy areas which were patrolled by either side violating at least four agreements on peace and tranquillity.
The rationale for a mutually acceptable compromise if it does happen is unclear.
Is it a decision reflecting pragmatism to sustain India China relations with a limited agreement on disengagement and de-escalation or the end of strategic patience adopted to wear down the other side through calibrated engagement?
The Indicators
A series of engagements at the ministerial and official level have been held in the past two months.
There were two rounds of talks between the foreign ministers of India and China and two rounds of meetings at the official level. In addition there has been a meeting at the National Security Adviser and equivalent level held this month in St Peterburg in Russia on the sidelines of a BRICS meet.
This has led to speculation over a breakthrough in the disengagement and de-escalation in two of the remaining sectors where the standoff is continuing – Depsang Plains and Demchok.
While it may be difficult to assess what has been ongoing in the talks which remain a closed book by both sides for obvious reasons, there is a momentum building up which may lead to a breakthrough during a high level interaction of the leaders Prime Minister Narendra Modi and President Xi Jinping.
Modi and Xi are expected to be present in two important summits, the BRICS in Kazan in Russia in October and the G 20 Summit in Brazil in November.
Yet to reach a reasonable compromise there is a lot of ground to be covered. This is particularly so to achieve the Indian objective of restoring status quo ante or at the minimal level establishment of buffer zones so that the current face off between the PLA and the Indian Army is de-escalated.
Here is a review of the diplomatic developments and the military and economic imperatives for India and China to reach a closure to the present impasse.
Diplomatic Developments
After two consecutive meetings of the Foreign Ministers in the Month of July India and China held two meetings [30th and 31st ] of the Working Mechanism for Consultation & Coordination on India-China Border Affairs (WMCC). A Meeting of the National Security Adviser and equivalent on the Chinese side was held on September 12.
In a brief Press Release India’s Ministry of External Affairs stated, that National Security Adviser Shri Ajit Doval, KC met Member of the Communist Party of China (CPC) Political Bureau and Director of the Office of the Central Foreign Affairs Commission, Mr. Wang Yi on 12 September 2024 in Saint Petersburg, Russia on the sidelines of the Meeting of BRICS High-Ranking Officials Responsible for Security Matters/National Security Advisers.
The meeting was viewed as an opportunity to review the recent efforts towards finding an early resolution of the remaining issues along the Line of Actual Control (LAC), which will create conditions to stabilize and rebuild bilateral relations.
The two seasoned leaders “agreed to work with urgency and redouble their efforts to realize complete disengagement in the remaining areas”.
Indian NSA conveyed that peace and tranquility in borders areas and respect for LAC are essential for normalcy in bilateral relations, a policy that India has been following rigorously over the past four years. This even though economic and trade relations between India China remain on stream with China being the largest trading partner of India in recent years.
Reflecting on the same meeting Chinese Foreign Ministry on September 13, attempted to portray a positive picture of developments highlighting that troops have disengaged at four places in Eastern Ladakh, including Galwan Valley- the site of clash in June 2020.
The Chinese spokesperson Mao Ning said, “In recent years, front-line armies of the two countries have realised disengagement in four areas in the Western sector of the China-India border, including the Galwan Valley. The China-India border situation is generally stable and under control.”
During the meeting, both Mr. Wang and Mr. Doval discussed progress made in recent consultation on border issues and agreed to deliver on the common understandings reached by leaders of the two countries, enhance mutual understanding and trust, create conditions for improving bilateral ties and maintain communication to this end, she said.
In a separate event in Switzerland, speaking on recent developments, India’s External Affairs minister Dr S Jaishankar said, "We made some progress in the ongoing negotiations. I would say roughly you can say about 75% of the disengagement problems are sorted out."
He was speaking at the Geneva Centre for Security Policy in Switzerland and added, “We hope that if there is a solution to the disengagement and there is a return to peace and tranquility, then we can look at other possibilities".
The minister also said what happened in 2020 was a violation of multiple agreements for reasons which were still not entirely clear to India. "We can only speculate about it. The Chinese actually moved a very large number of troops to the LAC at the border and naturally in response, we moved our troops up. It was very difficult for us because we were in the middle of a Covid lockdown at that time," he said, describing the development as dangerous.
"Now, we could see straightaway that this was a very dangerous development because the presence of a large number of troops in these extreme heights and extreme cold in near proximity could lead to a mishap. And that's exactly what happened in June 2020," he said, referring to the Galwan Valley clashes.
Military Situation and Imperatives
Against this diplomatic backdrop, crux of resolution is agreement to end the military standoff.
Attempts are being made to narrow down the differences, but possibly as neither side is willing to give way to disengagement and de-escalation in the crucial sector of Depsang Plans and Demchok, there is unlikely to be a breakthrough unless there is a green signal to the Senior Commanders from New Delhi at the next meeting to be held at the military level.
The military commanders may finalise the modalities of the disengagement at Demchok.
It, however, may take a few more rounds of negotiations to end the stand-off at Depsang, where the Chinese People’s Liberation Army (PLA) has deployed well inside the territory of India and has been blocking the Indian Army’s access to Patrolling Points 10, 11, 12, 12A, and 13, sources in New Delhi were quoted by the Deccan Herald.
This is so as all-important Depsang Plains flank the edge of the Daulat Beg Oldi [DBO] landing ground which leads to the Karakoram Pass.
The Depsang Plains overlook the approach to the Karakoram Pass, allowing China to monitor and potentially control access to the pass.
China's control over the Depsang Plains enhances its ability to monitor and influence activities belt, including access to the pass.
While Demchok is significant but relatively lesser so than Depsang.
The terrain around Demchok, often referred to as the "Demchok Funnel," is relatively flat, allowing for the deployment of mechanized forces. This makes it a potential route for any offensive operations into Ladakh.
Historically, Demchok served as a link between Ladakh and Tibet through the Indus River route.
The Indian government has been making efforts to improve infrastructure in Demchok, including better road connectivity and communication facilities. These developments are crucial for maintaining a strong presence in the region.
At the same time, deployment of large forces, troops, tanks and guns in the harsh high altitude environment in Eastern Ladakh for long periods is debilitating for the armed forces leading to defocus on modernisation.
Economic Imperatives for India
What are the economic imperatives for India and China.
At the ET World Leaders Forum on August 31, the External Affairs Minister said, "India has a special China problem that is over and above the world's China problem." "Once you understand that because there is a general problem with China as well as our own situation, all of you know we have a very difficult situation at the border for the last four years. I think the sensible response to it is to take the precautions that a country like India is taking."
The Economic Survey published by the Ministry of Finance a day before the Union Budget in July advocated attracting investments from Chinese companies to boost exports. The Survey suggested a change in stance reasoning that countries such as Mexico, Vietnam, Taiwan, and Korea are benefiting from the China-plus-one phenomenon pursued by Western firms, with a simultaneous rise in investment from China.
On the other hand, India approved only a quarter of the total 435 foreign direct investment applications from China up to June last year since the modification in Press Note 3 was introduced in April 2020.
Now there is a move to increase momentum to attract Chinese investments.
A portal to facilitate the approval of short-term business visas for Chinese technicians, essential for operationalising production units and boosting output in sectors under the government’s flagship Production Linked Incentive (PLI) scheme, has begun functioning.
The visa process may gather pace. While India issued just 2,000 visas to Chinese nationals in 2024 from about 200,000 before the pandemic in 2019, the Indian government is now cutting down visa delays for Chinese technicians, responding to demands from businesses. Chinese manufacturing machines require skilled technicians which are lacking in India thus the easing of rules is a practical measure while at the same time investments may also be facilitated soon.
This comes as it is evident that in the last five years, electronics imports from China and Hong Kong have far outnumbered imports from other major manufacturing hubs like South Korea, Japan, Taiwan, and all ASEAN countries, combined.
In the financial year 2023-24, India imported electronic components worth over $12 billion from China and $6 billion from Hong Kong, thus indicating that India’s growing footprint in electronics manufacturing may not yet be translating into reduced reliance on Beijing.
An inter-ministerial panel has recently approved investment proposals in the electronics manufacturing sector, including some from Chinese companies such as Luxshare and a joint venture between Bhagwati Products (Micromax) and Huaqin Technology. China is already the largest trading partner of India in the past five years and more.
For China to expanding the footprint in the large Indian markets with an expansion of manufacturing taking place under various schemes assumes importance.
Thus, there may be a strong economic imperative for a breakthrough on the LAC, which for India is a pre-requisite.
Imponderables
With both Modi and Xi likely to attend the BRICS summit at Kazan in Russia from October 22 to 24, and the G20 summit at Rio de Janeiro in Brazil from November 18 to 19, Indian and Chinese diplomats are exploring the possibility of a meeting between the two leaders on the sideline of any of the two summits. This can happen only if there is a scope for a major development in relations between the two sides particularly on the LAC.
Much will also depend on the underlying geopolitical and regional developments and internal framing of a resolution particularly in India given an aggressive approach adopted by the opposition parties in New Delhi.
Will there be any breakthrough as the Indian Prime Minister and Chinese President Xi attend the BRICS Summit in Kazan in October or later remains to be seen?
