While Washington pushes for anti-China alliances, New Delhi treads cautiously, knowing its neighbor is here to stay

The Galwan is one of the many Himalayan rivers. A narrow mountain stream, in some places almost a brook, in others a turbulent, seething mass of icy water foaming on the rocks. The river, which few people knew about except geographers, diplomats and military personnel – staff officers in Delhi and Srinagar and ordinary soldiers who regularly patrolled the disputed territory of the Line of Actual Control between India and China – suddenly became the talk of the town in June 2020.

Then, literally a couple of months after the announcement of a strict nationwide quarantine in India and China because of the Covid-19 pandemic, a not uncommon skirmish between patrols took place on its banks. Indian and Chinese soldiers patrol without live ammunition, in accordance with a 1996 agreement, and such episodes usually end with a dozen bruises and bumps and a few broken bones. But not this time: as far as we know, one of the newly appointed Chinese commanders responsible for this area decided to demonstrate to the Indians and his superiors his uncompromising nature, initiative and tactical talents.

The Indian military was not going to back down: just recently, Chief of Defense Staff Bipin Rawat said that it was necessary to review the priorities and structure of military spending, threatening to freeze the program to build a third aircraft carrier for the navy and the contract to buy 110 fighters from Israel. The army had an opportunity to clearly demonstrate that its spending should not be cut.

The outcome of the clash in the Galwan Valley shocked India. Twenty people were killed, and neither side used firearms – the injuries sustained from falling off a cliff at night, the fast flow of an icy river and the lack of medical care were enough. The Chinese reported four of their own killed, while Indian media later accused the Chinese of concealing losses and wrote about 40 dead PLA soldiers.

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In one way or another, Indian society, already frustrated by the strict lockdown and frightened by reports from Covid-19 hospitals, demanded a tough response from Prime Minister Narendra Modi’s government, and the Indian authorities were forced to meet voters halfway. Everything that Modi and Chinese President Xi Jinping had managed to achieve in bilateral relations over the preceding two years went down the drain.

Modi had visited China in April 2018, unexpectedly for most Indians and outside observers. At the time, relations between Delhi and Beijing were far from ideal: the Indians were frightened by the growing Chinese presence in Southeast Asia and the Indian Ocean region, where in 2016 the Chinese began building a naval base in Djibouti. Indians were irritated by the support that China was providing to their long-time adversary Pakistan.

In addition, less than a year had passed since the standoff on the Doklam plateau, where the Indian Army came to the aid of the Bhutanese military, preventing the Chinese from unilaterally adjusting the border line in their favor. Therefore, both the fact of the visit and its outcome came as a surprise: the negotiations took place in an extremely friendly atmosphere, and the concept of the “Wuhan spirit” firmly entered into common usage, by analogy with the term “Shanghai spirit,” used to describe an atmosphere of mutual trust, understanding and readiness for cooperation.

The following year, Xi Jinping visited Modi in Mahabalipuram. There, according to media reports, the “Wuhan spirit” grew even stronger. Then, the pandemic began and the Galwan Valley incident occurred, demonstrating that the most ambitious strategic plans can collapse due to a nasty virus combined with an overly proactive commander along a disputed section of the border.

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Only five years later, during a personal meeting between Modi and Xi at the BRICS summit in the Russian city of Kazan, was it finally possible to turn the Galwan page in the history of bilateral relations. A full-fledged settlement of all problems is still far away, and it is too early to talk about the return of the “Wuhan spirit.”

Soon after the Kazan summit, however, both sides withdrew forces from the border and agreed on patrol schedules to avoid future clashes in the disputed areas. At the recent meeting between Chinese Foreign Minister Wang Yi and Indian National Security Adviser Ajit Doval, the parties agreed on a six-point program of further cooperation regarding the border. India, which until recently had looked at its northern neighbor in the Himalayas with demonstrative suspicion, has suddenly changed its anger to mercy, and not without reason.

Until recently, India has successfully pursued a policy of ‘Duobus litigantibus tertius gaudet’ (the third party enjoying itself while two are fighting). The Americans, who are trying by hook or by crook to prevent the growth of China’s power and its transformation into the world’s leading economy, are ready to pay handsomely for Sinophobia. India is in such a convenient strategic position that the US helps it simply because it exists and has a territorial dispute with China – until, of course, it is settled, and India and China become best friends.

Delhi understands very well what exactly the US wants from the Indians, but does not see this as a particular problem as long as American and Indian interests coincide.

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Neither India nor the US want to see China as the only world superpower and the only pole of power in Asia. However, the Indian elites realize that China will not disappear from the world map and will forever remain India’s neighbor. This means that even a successful conflict in the present may result in huge problems in the future, and India has no reason to lend blind support to the American strategy, because all the benefits in the event of its successful implementation will go to the US, while India will get the bruises.

Before the “Galwan incident,” India was quite successfully trying to sit on two chairs, developing economic relations with both the United States and China. In that situation, this was the only reasonable strategy.

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By 2014, India had a lot of problems with its economy, and the Modi government, which won the elections that year, launched a package of programs in order to maintain the growth rate at least at 5% of GDP, aimed to include India in global production chains. The key programs were infrastructure development (construction of roads and railways, canals and ports) and the mass retraining of specialists, who were taught skills which are in demand in the new world.

Both China and the US were extremely important to India: the work of almost all sectors of the Indian economy, from pharmaceuticals to IT, depended on Chinese imports, and the US was (and remains) the most promising export market for India.

After the Galwan incident, the balance was destroyed, and the Modi government, realizing that it would not be possible to resolve the situation in relations with China in the coming years, decided to squeeze the maximum possible out of the border incident, behaving in an emphatically unfriendly manner and demonstratively limiting the import of Chinese capital and the presence of Chinese companies in the Indian market.

This did not particularly affect Indian-Chinese economic relations – trade turnover is still growing – but Western investment in the Indian economy increased.

Nevertheless, in the last year, there has been a tendency towards a decline in foreign direct investment from Western countries. There are many reasons: the problems in the global economy that resulted from the Ukraine conflict, the uncertainty associated with the US elections and the future policy of Donald Trump, and, finally, the unfulfilled hopes for a tough decoupling.

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As it turned out, American and European companies are not at all going to urgently move
production away from China. In order to continue the already launched reform programs and prevent internal socio-economic problems, the Indian authorities need new investments – and China emerges as the only potential source.

The next round of the waltz with the participation of Beijing and Delhi will, of course, have its own peculiarities. The Chinese will clearly not be allowed into border areas and the most sensitive strategic industries, and the flow of FDI will be directed into infrastructure projects – while special attention is paid to preventing the excessive growth of Chinese influence.

This article was first published by Valdai Discussion Club and edited by the RT team.