The Modi govt's real test is yet to come

Governments today face scrutiny on their 100th day, sixth month, first year or some equally arbitrary period. Like surprise examinations in a school, they end up being haphazard exercises in assessing the true worth of the examinee. For one thing, they are completely subjective. You can choose your metric the Sensex being up or down, inflation, FDI coming in and so on, and shape the argument any way you want. In other words, show the glass as being completely full, half empty, half full, or completely empty.

 

Prime Minister Narendra Modi is welcomed upon his arrival at Deendayal Dham near Mathura on Monday, where he kickstarts a series of 200 rallies to mark a year of his government. Pic/PTI

The real test, however, are elections the small ones in state assemblies and the big one to the Lok Sabha. The Narendra Modi government faces a small test later this year when elections will take place to the Bihar Legislative Assembly and later, in 2016 in West Bengal and in 2017 in Uttar Pradesh. However, since the BJP is not the incumbent party in any of the states, its stakes are relatively low. But, at the end of the day, the real test will take place only in May 2019.

Judged by that measure, the Modi government does have time. The problem, however, is that as of now, we are not quite clear as to the direction it is moving in. The first year should have given us a clear indication of its plans, and the personnel who would execute them. However, we have clarity in neither area. Yes, we are familiar with the numerous slogans and buzzwords — “Make in India”, “Swachh Bharat Abhiyan,” “Namami Ganga”, “Jan Dhan Yojna”, “Shramev Jayate” or “GIAN, Global Initiative of Academic Networks”. But we see no clear policy lines or the organisations which will deliver them. We know that Arun Jaitley is the effective number two in the ministry, and that the Minister for Water Resources Uma Bharti is the nominal head of the clean Ganga campaign, or that Nitin Gadkari handles road building and Venkaiah Naidu does urban development. But none of these figures have stood out so far, as did Jaswant Singh, Arun Shourie, BC Khanduri and Yashwant Sinha in the case of the first NDA.

The challenge before the second National Democratic Alliance government is much more complex than that faced by the first, headed by Atal Bihari Vajpayee. In the last fifteen years, the governmental system has become more stove-piped and clogged.

So, the challenge before the government is not merely to run the system, but to understand that to even to run the government effectively today, there is need to first restructure and reform it. This is where we find little happening, because the Prime Minister in his wisdom has marginalised his political colleagues and privileged the bureaucracy.

However, the bureaucracy is simply unable to cope with the level of expertise required to run the government of today since it lacks an effective system of promoting expertise and upgrading the skills of its own personnel. In a bid to retain control, it has layered the government system with regulations and procedures which have effectively paralysed decision-making.

So, unless this reform takes place, we are likely to see a lot of declarations, slogans and plans, but little happening on the ground.

To break this logjam, Prime Minister Modi needs to, perhaps, imitate Rahul Gandhi and take a break to meditate on his situation. He needs to realise that the people of the country gave him the kind of electoral majority he got, on the basis of his promise of radical reform. It is true that the Modi team has ended the drift of the UPA II era, but in the main through tinkering with the system, rather than overhauling it. Achievements like coal blocks allocation have been more an outcome of a court-driven process than a self-conscious effort to reform. Indeed, within the government there seems to be a belief as expressed in the Economic Survey 2014-2015 that “creative incrementalism” will give India sustainable double-digit growth, rather than radical reforms.

India may have overtaken China in terms of economic growth, but that is scarcely any comfort since almost all estimates say that it would take us a generation or two to overtake the Chinese, even with double-digit growth. But that is assuming we can manage to consistently grow at a high rate for the next two decades and more.

This is where the problem lies. There is likely to be no gain without pain. It is an illusion to think that India can achieve its economic promise without drastic changes in the way it runs its governmental system. Though it is true, Modi recognises this, that the challenge is not just something New Delhi alone can meet; now more than ever, there is need for a functioning partnership between the Union government and the states. The move for a GST is one small forward move. But we need sharp acceleration of that partnership in removing obstacles in inter-state commerce and transportation. Likewise, beyond the promise of Make in India, the Centre and the states need to focus on the immediate problem that the country confronts — rural distress which can only be removed through reforms in our agricultural system.

The one lesson that emerges from the experience of other societies in transition is that we need to see reform as a continuous process. There is also need to understand that in a democracy, the process of reform can only be led by the political class. If there is one weakness that the government clearly has, is the lack of Ministers who are reform minded. It is true that Modi is committed to reform and change. But that is not sufficient, no matter what his supporters may think, he is not a superman. He needs to expand his political team and empower them.

Mid Day May 26, 2015

How the PM put India on an even keel

Most of the comments on Prime Minister Narendra Modi’s first year in office have given him full marks in the area of foreign policy. 

With as many as 19 foreign visits, of which 16 were state visits, Modi has probably set a record of sorts. 

The visits can be looked at through the prism of geopolitics and geo-economics. However, there has also been an additional “geocultural” element in his outreach to the Indian community and in his efforts to burnish India’s Buddhist credentials. 

His key achievement in this one year, has been to right the Indian ship of state and place it on an even keel in the turbulent global waters of today. 

Numerous visits 

The numerous visits allow us to see a clearer pattern of his government’s geopolitical thinking. This is visible in a distinct preference for aligning India with Western alliance through an outreach to the United States, Japan and Australia. 

On the other hand, he has sought to maintain a geoeconomic balance in showcasing India’s potential as the new manufacturing hub of the world. 

Pragmatically, he has aligned India with China in its effort to reset the global financial order. 

As part of this, India has become part of Asian Infrastructure Investment Bank and New Development (BRICS) Bank. He has actively courted and obtained Chinese investment into India, perhaps, not as much as he would have liked. 

Modi’s geopolitical outreach reveals three concentric circles — the outer one including Mongolia, Japan, Vietnam, South Korea, and the US around China’s periphery. In addition, there are two inner ones comprising India’s immediate neighbours who are members of SAARC, and another which took him to the island states of Sri Lanka, Mauritius and Seychelles in Indian Ocean in March. 

It does not take a genius to understand that a great deal of what Modi has been doing is to adjust India’s position in the regional system in the context of the rise of China. 

The latter’s spectacular economic growth has had an inevitable political fallout in India’s periphery and has tilted the balance of power against us. 

China has not only become a major economic power, but is now in the process of becoming a military power. This has implications for India because of our difficult relations with Beijing. Our entire 3,500-km border with China is disputed. Further, since the mid-1960s, Beijing has sought to contain India in South Asia by using Pakistan’s unrelenting hostility to India as its convenient instrument. 

Today, as China aspires for world power status, the simultaneous - though much slower - rise of India is a matter of discomfort for it. 

Chinese pressure 

The result is an intensification of Chinese pressure on India through aggressive patrolling on the Line of Actual Control, the accepted border between the two countries, as well as in Chinese activities in our immediate neighbourhood. 

While Pakistan has been a constant factor, Chinese actions in Myanmar, Bangladesh, Nepal, Sri Lanka and Maldives are of concern to New Delhi. 

Some of this is inevitable, given China’s expanding economic profile, but the worry is that it is aimed at keeping India locked in South Asia. 

Modi’s achievement is that he has pushed a vigorous Indian response. As a result, putative allies like the US and Japan, and presumed adversaries like China and Pakistan, have a clearer picture of the way India thinks. And this leaves no one in any doubt that the last thing New Delhi will do is kowtow to Beijing. 

Unique gesture 

Modi has been quite up-front in this. In an unprecedented gesture, he invited US President Barack Obama to be the chief guest at the 2015 Republic Day celebrations. Further, and more significantly, he agreed to sign up on a declaration on the Joint Strategic Vision for the Asia Pacific and the Indian Ocean. 

India and the US have been moving close to each other since the early 2000s. But somehow, New Delhi shied away from explicitly indicating the direction it desired of this relationship. 

The Joint Vision may be a declaration, but it is also an important first step. In a similar vein, Modi has been outspoken with the Chinese. Instead of trying to paper over differences, Modi bluntly told the Chinese during his state visit earlier this month that they should take a “strategic and long term view” of their relationship with India and “reconsider” their approach on “some of the issues that hold us back from realising full potential of our partnership”. 

How this balancing will play out, only future can tell. But you cannot deny Modi has been uncommonly energetic in pushing the Indian view. 

At the end of the day, the issue will be decided by how things play out on the ground. If he is able to transform the Indian economy and put it on a fast growth track in the coming years, he will sharply enhance India’s weight in the international system. 

Mail Today May 25, 2015

Still Battling Mistrust

The best assessment of the outcome of Narendra Modi's visit to China has been made by the Prime Minister himself. Twice on Friday, he referred to the inability of the two countries to fulfil their potential because of mistrust between them.
This time around, there was no reference to the 2005 formulation that the SinoIndian relationship was a “strategic and cooperative partnership“. The tone and substance of the joint statement, which usually reflects areas of agreement, was modest. Not surprisingly, it spoke of the “imperative of forging strategic trust“.

In his media statement in Beijing on Friday, Modi said he had, in his official talks, “stressed the need for China to reconsider its approach on some of the issues that hold us back from realising full potential of our partnership“. Later, in a speech at Tsinghua University, after outlining his plans and policies for India and the potential of the China-India political and economic partnership, Modi again emphasised the need to “address the issues that lead to hesitation and doubts, even distrust, in our relationship“.
Such candour is not unusual in talks between government heads, but Modi's insistent public references probably left the Chinese bemused. For too long they have gone on with the cynical claim that China's ties with Pakistan are not aimed at India, or that the border dispute is left over from history and is best left for later generations to handle. The simple fact is that Sino-Indian relations are now far too important to be allowed to fester for decades, as they have.
Modi conceded that the Chinese leadership was “responsive“ to him, but it is clear that they hesitated to act on his points. In his press remarks and Tsinghua speech, Modi spoke of the need to clarify the Line of Actual Control as a means of maintaining peace and tranquillity on the LAC, as well as the need for progress on the stapled visa policy. But the joint statement is silent on both issues.
In the same vein, there were probably subjects that the Chinese would have liked to have seen in the joint statement, but they are not there. Tibet and one China are old hat, but Beijing would have wanted a favourable reference to President Xi Jinping's favourite scheme ­ the One Belt One Road initiative that seeks to build overland and maritime connectivity in Central Asia and the Indian Ocean Region.
The reference to the border dispute in the joint statement is anodyne. Both sides seem adamant in wanting to get an “LAC plus“ settlement.
But there has clearly been forward movement in the economic and peopleto-people ties. Investments could come in railways and industrial parks, new consulates will be opened in Chengdu and Chennai, initiatives to encourage province-to-province and business-tobusiness relations will get a fillip through Indian e-visas. As of now, many of the plans are on paper, but there is a logic to closer India-China economic ties that cannot be ignored. Still, as Modi pointed out, at present there is a self-limiting trajectory to the relations. At its heart is a dark area of mistrust, which is actually growing. In the 1962-2000 period, it was primarily related to the memories of the war and China's backing of Pakistan, to the extent of altering the strategic equations in South Asia by giving them nuclear weapons and missiles.
But after 1988 China and India were able to keep aside the problems, maintain peace on a disputed 4,000 km border, build important economic relations and develop convergence on a host of global governance issues.
Till the end of the Cold War, with the Soviets on their side, India effectively balanced China. Our GDPs and levels of technology were roughly the same. But in the 2000s things have changed rapidly and today China's GDP is five times that of India; Russia is drifting towards China.After 2008 China has come to be seen as a world power, bringing in its wake enormous turbulence in the world order.
Yet, the Sino-Indian border dispute continues to fester and the China-Pakistan relationship seems even more solid, with little change in Islamabad's hostility towards India or China's military commitment, the latest to the provision of submarines capable of firing ballistic missiles.Layered upon this are newer areas generating mistrust ­ China's naval activity in the Indian Ocean and the nature of relations with India's close neighbours, Bangladesh, Sri Lanka and Nepal.
So it is not surprising that India, feeling the ground shifting beneath its feet, is furiously modernising its military and racing to build its border infrastructure. It is reaching out to democracies like the US and Japan to maintain a balance of power, and this, in turn, following the logic of great power competition, is scaring China.
In part the mistrust is fostered by a difficulty in understanding how the Chinese system functions. But rising China, instead of becoming more open and democratic, remains opaque, determined to create an authoritarian universe in its governance system, internet, media and international outlook.
But conflict is not inevitable. India and China have themselves shown how it is possible to manage disputes. However, it requires a pragmatic ability to confront festering issues and resolve them. By being unusually forthright in his speeches in Beijing, that is what Modi was trying to tell China.
Times of India May 18, 2015

Incremental Progress, Not Flourishes in the India China Statement

There has always been a touch of rhetorical excess in delineating joint statements between India and China. In 1954 when we signed the agreement on trade and intercourse with the Tibet Region of China, it was prefaced by what came to be known as the Five Principles of Peaceful Co-existence. Years later in 2003, when Prime Minister Vajpayee made his visit to Beijing, it was entitled “a declaration of principles for relations and comprehensive cooperation”.

 

In 2005, the Sino-Indian joint statement following the visit of Wen Jiabao in April 2005 said that it was under the rubric of a new “India-China strategic and co-operative partnership for peace and prosperity.” So it was not surprising that when Manmohan Singh visited Beijing, the joint statement was subtitled “ a shared vision for the 21st Century of India and China.”
In his October 2013 visit, the subtitle was “a vision for future development of India-China strategic and co-operative partnership”. And last year when Xi Jinping came visiting, the joint statement set India and China on the course of “building a closer developmental partnership.”

No high sounding tag
So, it is a surprise that the much-touted joint statement during the visit of Narendra Modi does not have any kind of a high-sounding tag.
When you read the 2015 document and then you read it alongside Prime Minister Modi’s press statement on Friday, it becomes apparent why. From 2005 when India and China undertook a “strategic partnership”, albeit only for peace and security, it has had an iconic status in joint statements. It figured in the 2008 and 2013 joint statements when Manmohan Singh visited Beijing, and it did so again in 2014 when Xi Jinping came to New Delhi. However, this year it is absent. The only reference to anything strategic is “the imperative of forging strategic trust.” Realism seems to be the leitmotif of the document.
There is no reference to the signature Chinese outreach project, now known as the Belt Road Initiative. This is something of a surprise considering the importance China assigns to India in its maritime scheme of things. This can only mean that New Delhi is not quite sold on the idea. However, the more limited Bangladesh-China-India-Myanmar corridor does figure.
In the September 2014 Joint Statement, the two sides had promised to hold a maritime dialogue and cooperate on anti-piracy, naval escort missions, as well as work together in peacekeeping, humanitarian aid and disaster relief. The May 2015 statement does not mention them, a somewhat strange omission in the context of the recent Nepal earthquake.  However, in his remarks to the students of Beijing’s prestigious Tsinghua University, later on Friday, Modi was quite emphatic in stating that India and China use the same sea-lanes around the world, and that the cooperation of the two nations was “essential” to secure them.
In talks such as the ones Modi has had with his Chinese counterparts, the discussions are often candid and blunt. But it is rare that a visiting leader makes a pointed reference to the differences. Modi’s remark that he  “stressed the need for China to reconsider its approach on some of the issues that hold us back from realizing full potential of our partnership” tells the story. India and China have a vast potential for cooperation, but, as some Chinese themselves have been saying, the border issue has become an obstacle.

Balance of terror
But this is only one of the grouses. Even deeper is India’s unhappiness with China’s Pakistan connection. By giving Islamabad nuclear weapons and missiles China has created a balance of terror in South Asia and also given Pakistan a shield which it uses to protect itself against Indian retribution for its support for terrorists operating in India. The latest development, a possible sale of Chinese submarines capable of firing ballistic missiles would be in keeping with Beijing’s strategy of balancing India with Pakistan. Modi’s somewhat plaintive observation that “ I suggested that China should take a strategic and long term view of our relations” points to India’s belief that China is not doing that and is motivated by short-term interests.
Through his remarks we also have a good idea as to what the discussions were about, and where there was little or no movement. Primarily, it was about the border and the joint statement formulation was fairly standard and more or less identical to the statements made earlier. There was no reference in the joint statement on Modi’s suggestion, made first during Xi’s visit in September 2014, and reiterated this time as well,  on “the importance of clarification of Line of Actual Control.” Since the 2000s, China has abandoned this track that sought to work out a commonly accepted version of the LAC as per the 1993 agreement on maintaining peace and tranquillity on the border. The reason, say knowledgeable sources, is that the Chinese are afraid that a commonly accepted LAC would, over times, be vested with a kind of permanence.
Border issues
Modi was being Modi when he pressed his views on the border issues in his speech at Tsinghua University later on Friday. Beyond the rhetoric of what India and China could do together in Asia, and of the economic potential of the relationship, he pointed to the need to resolve the border dispute and in the interim, clarify the Line of Actual Control  and “ ensure that our relationships with other countries do not become a source of concern for each other.”
There seems to be a remarkable turnaround on the issue. It was Xi Jinping in March of 2013 who had, at the sidelines of the BRICS meeting in Durban, first called for an “early settlement” of the border dispute. Yet, here we see Indian leaders endorsing the idea and the Chinese seemingly quiet. Obviously there seem to be deep differences that are unbridgeable for the present.
Both India and China seem to be fixated on a “status quo plus” option, in that each side wants something more than the current LAC. China wants the Tawang tract and India is seeking thousands of square kilometres of territory that the Chinese seized in the western sector during the 1962 war. And this is despite the 2005 agreement on the political parameters and guidelines of a border settlement through which both sides had agreed on a framework which would take into consideration the settled populations of the border regions and the strategic interests of the two sides.
Clearly, much more work needs to be done. For the moment, incremental progress is better than no progress at all.
Meanwhile, as they have done since 1988, the two sides seem committed to promoting relations in other areas. They are already important economic partners, though the trade imbalance remains a niggling worry. However, given China’s resources and India’s needs, the scope for economic cooperation is indeed great. Equally, the two sides already find a great deal of common ground in co-operating in multilateral issues, whether it is the AIIB or the New Development Bank, or climate change and WTO.
However, and Modi is right on this, unless the two sides can fix their “strategic mistrust” they will not be able to fulfill the potential of their relationship.
The Wire May 15, 2015

The Modi government's economic story

In politics, depending on your point of view, one year can be a long, or a short time. The Narendra Modi government has hit that anniversary and while critics charge that he has failed to deliver, his supporters argue that a year is simply too short a time to judge the government of a country as huge as India, and one with legacy issues ranging from corruption to misgovernance.

Modi's arrival was spectacular, at the head of the first party to win a majority by itself since 1989. His burden has arisen not only from expectations he aroused as a prime ministerial candidate, but also from the fact that he has a majority in Parliament, the first PM to have one since 1989. In other words, people believe that he is in a position to change things in a way Manmohan Singh, Vajpayee and his other predecessors of the 1990s were not.

The economic story of Modi's first year in office is mixed, both in the economic and political fronts. GDP has picked up to 7.4 per cent in 2014-2015, after a change in the way it was calculated. The index of industrial production for eight core sectors — coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity — grew 5 per cent in 2014-15 over 4.2 in the previous year. However, areas of concern remain such as declining exports and imports, which went down 2 and 0.5 per cent in 2014-15 over the previous year.

Modi himself is on record saying that it would take him 5-7 years to fulfil his agenda. The issue, however, is not how much time he deserves, but how much he will actually get, and no one can forecast that. Pic/PTI

Of greater concern has been the continued poor performance of the agriculture sector where 600 million Indians are employed. It grew a marginal 1.1. per cent in 2014-15 and experts say that the numbers point to a deepening crisis in this sector.

Corporates and investors were betting on big bang reforms to kick-start growth and FDI has grown over 37 per cent in the past year. As the experience of tax laws imbroglio suggests, reform is not easy. However, the stock market continues to repose faith in Modi, though in the recent past, tax issues have dampened the spirits of foreign institutional investors.

The global fall in crude oil prices came as an unanticipated boon for the new government, as they helped in trimming the import bill and saving foreign exchange. There was good news as well in the inflation front, particularly in consumer prices which are below the Reserve Bank of India's 6 per cent target. However, the fiscal deficit has been contained to a comfortable figure.

On the political front, Modi has not been troubled so much by the shell-shocked Congress party, but elements in the Sangh Parivar who believe that the 2014 victory was a vindication of their politics. Perhaps they are worried that if allowed to go his own way, Modi could run away with the development agenda, and leave them high and dry. So they continue to agitate to push their Hindutva agenda wherever they can, queering the pitch for the BJP and the Modi government.

So far the prime minister has played a canny game. As the Gujarat experience of 2002 revealed, Modi is a skilful and cynical politician, who will not hesitate to use the communal agenda for electoral gain, just as a generation of politicians, from Indira Gandhi, Lalu and Mulayam Singh Yadav have done. Modi has not directly spoken on the issues of alleged attacks on churches or the communal violence in UP, or the inflammatory statements of some so-called sadhus and sants. But he has worked behind the scenes to rein them in because he is fully aware of their potential of derailing his agenda.

He has sought to position himself as a social reformer, keen to push the agenda of “sabka saath, sabka vikas” and promote programmes like “Swachh Bharat” and “Namami Ganga” and for women's empowerment. However, from the public point of view, the most important agenda is neither social, nor cultural, but his promise to rejuvenate India's economy and make it an industrial power. And this is where there are growing doubts about the ability of his government to do things.

There are issues like the land acquisition bill which have generated a lot of opposition. But that is par for the course for anyone trying to change the way the country is being run. He will, no doubt, face even bigger hurdles when he tries to reform the labour laws of the country, considering that biggest trade union in the country, the Bharatiya Mazdoor Sangh is affiliated to the BJP.

The problem seems to be an acute lack of expertise in the system. Modi is wary of his own political colleagues and is hoping that the bureaucracy will do the needful, just as it had done in Gujarat. But, the problem is that debris of a decade of misgovernance and corruption has paralysed the government machinery.

In the old days, a new minister took office things ran on their own. Today, each ministry requires deep restructuring and reform for it to even function effectively. The only people who can lead change are politicians, not bureaucrats. Unfortunately for the party, with stalwarts like Arun Shourie, Yashwant Sinha, BC Khanduri and Murli Manohar Joshi sidelined, the party has a very narrow base of experienced leaders who can lead the process. Mr Modi relies on Arun Jaitley, who is known for his abilities, yet, he simply cannot overhaul a dozen ministries.

Modi himself is on record saying that it would take him 5-7 years to fulfil his agenda. That is a reasonable amount of time. The issue, however, is not how much time he deserves, but how much he will actually get, and no one can forecast that.

Mid Day May 12, 2015

Chinese keep a keen eye on Modi's visit

BEIJING: The overwhelming question a visitor here faces is: What will be the outcome of the visit of Prime Minister Narendra Modi? Will he bring a package to resolve the border question, or will he come with a basket of measures to attract Chinese investment in India? 

It is a tribute to the Indian prime minister’s hard-driving style, that the phlegmatic Chinese are actually intrigued by the prospect of an Indian prime ministerial visit to a capital, which witnesses many a kowtowing foreign leader passing through. 

 

The great neglect 

India is a fairly benign, if distant, distant image to the Chinese. Few are familiar with the border dispute which obsesses the Indian media. 

A leading Chinese expert, Wang Jisi, the erstwhile Dean of Peking University’s School of International Studies, wryly points out that China has neglected India till now, and few in China realise India’s growing strength, considering that its GDP today exceeds that of Russia. 

Yet, as Chinese interests expand into the Indian Ocean, China has begun to focus on India not just as a pesky wannabe that needs to be kept in its place in South Asia, but as an important linchpin in its strategy of transforming its economy from one based on investment and export, to one emphasising consumption and innovation. 

India, then, becomes a destination for Chinese investment, a market for its products, the low end segment of its supply chain and a way station on its maritime silk route. 

The problem that the Chinese face is India’s perception of China. While the Chinese may not think much of India, the Indians certainly view China with some envy, trepidation and even fear. 

In some measure this is an outcome of the traumatic defeat China inflicted on India in 1962. But it has other drivers: China’s relations with Pakistan, its recent forays in the Indian Ocean, and, above all, the fact that the Chinese economy, which was roughly equal in size to the Indian in the mid-1980s, has dramatically outpaced it. Today India’s GDP stands at $ 2 trillion, whereas China’s is pushing beyond $9 trillion. Consequently China’s military budget is three times that of India. 

Five focus areas 

When Modi goes to Beijing, there will be five major areas of focus: First, the continuing effort to resolve the border dispute; second, the mechanisms to maintain peace and tranquility on the border and the seas; third, bilateral relations and the issue of enhancing economic cooperation, as well as issues like river waters and Tibet; fourth, Sino-Indian cooperation in multilateral issues; and fifth, strategic business - issues relating to third countries such as US, Japan, Pakistan, Iran, West Asia, Afghanistan, and so on. 

After calling for keeping the border issue aside, China has begun to realise that the border issue has become an obstacle blocking closer Sino-Indian ties. They have signaled that they are open for a quick settlement, but it is not clear as to what this means. 

In the past they were agreeable in trading the Indian claim on Aksai Chin with theirs’ on Arunachal Pradesh, but since 1985, the Chinese have demanded an India “concession” in the east, such as the Tawang area, in return for a Chinese acceptance of India’s sovereignty over the rest of Arunachal. Aksai Chin has been conveniently forgotten, as it is securely under Chinese control. 

However, the Indian side has been equally vehement in telling the Chinese that conceding the Tawang tract is just not possible. Talking of packages, indeed, the balance of expectation is on Xi Jinping to right the “eastern” tilt to their border claim. 

Issues of mistrust 

But the border is not the sole cause of the strategic mistrust between the two countries. China’s relations with Pakistan remain problematic for India, especially when it comes to the transfer of strategic weapons and technology. 

With China deciding to invest heavily in Pakistan, there is further cause of concern as to the nature of this evolving relationship. 

China says it is worried about India’s ties with the US and Japan. But India has moved cautiously in this area. Modi’s recent remark that it was natural that China, like any other country, will seek “to increase their influence in the international space” should put things in a perspective. 

If things go according to plan, the most important outcomes of the visit will be economic, though we should not rule out a surprise on the border. The bilateral trade is heavily weighted against India and Chinese investment in India is trivial, not in the least because of Indian barriers. 

Xi has promised more investments, but it is really up to New Delhi to work on a strategy of getting the Chinese to put down serious money to further India’s economic goals. 

Mail Today May 10, 2015