Complex Relationship Between India and China
India and China have a fraught relationship, marked by historical territorial disputes along the Line of Actual Control (LAC), leading to military stand-offs and a lack of trust.
Recent discussions suggest some progress in disengagement talks, but major issues like the militarization of the border remain unresolved.
High-level meetings, such as those between India’s NSA Ajit Doval and Chinese officials, indicate attempts to resolve tensions, but outcomes remain uncertain.
India is grappling with whether to accept the altered status quo established by China, which could have long-term implications for border security.
China's behavior suggests a strategy of attrition, expecting India to gradually accept new realities rather than addressing core issues first.
Recent Border Disputes, Economic Ties, and Implications of Chinese FDI
India faces significant challenges from a growing trade deficit with China, which reached over $105 billion in 2023, complicating economic relations
While some suggest increasing Chinese foreign direct investment (FDI) to integrate with supply chains, this poses risks to India’s security and economic independence.
Analysts warn that Chinese investments may not lead to reduced import dependence and could result in low-value additions in critical industries
In dialogues, China has pushed for a level playing field for its companies in India, emphasizing issues like visa facilitation and resuming direct flights, which India views as symptomatic of deeper problems.
Both China and the West are increasingly "securitizing" their economies, making it essential for India to navigate its position carefully.
Historically, Chinese investments in other countries have not significantly enhanced local manufacturing capabilities, raising concerns about their impact on India's industrialization.
India should adopt a cautious approach to Chinese investments, selectively allowing FDI in sectors aligned with its national security and industrial goals
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