Meeting of the Generals
Indian and Chinese military leaders meet to resolve the ongoing stand-off along the Line of Actual Control
Hi there, I’m Aman Thakker. Welcome to Indialogue, a newsletter analyzing the biggest policy developments in India. The aim of this newsletter is to provide you with quality analysis every week on what’s going on in India.
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High-Level Talks Held Between Indian and Chinese Military Leaders
On June 6, Lt Gen Harinder Singh, the general officer commanding of India’s 14 Corps, based out of Leh, Ladakh, met with Major General Liu Lin, commander of South Xinjiang Military Region of Chinese People’s Liberation Army to discuss the tensions between the two countries along the Line of Actual Control, the disputed border between India and China. The meetings took place after several rounds of talks between military commanders at lower ranks, which last included at least three rounds of discussions between officers with the rank of major general.
India’s Ministry of External Affairs issued a statement stating only that the meetings “took place in a cordial and positive atmosphere,” and that “both sides agreed to peacefully resolve the situation in the border areas in accordance with various bilateral agreements and keeping in view the agreement between the leaders that peace and tranquility in the India-China border regions is essential for the overall development of bilateral relations.”
The talks between military leaders was preceded by a videoconference between foreign ministry officials on June 5. Naveen Srivastava, Joint Secretary (East Asia) in the Ministry of External Affairs held discussions with Wu Jianghao, Director General in the Chinese Ministry of Foreign Affairs. India’s Ambassador to China, Vikram Misri, and China’s Ambassador to India, Sun Weidong, were also on this call.
While there have been no official statements on the details of these exchanges, media reportage has painted a picture of what India’s demands have been in these meetings. Shubhajit Roy and Sushant Singh of The India Express report:
The Indian agenda for the meeting, an official said, centres around restoration of the status quo ante on the LAC to April-end — before China diverted its forces from an ongoing military exercise towards the Indian side. This translates into an Indian insistence on withdrawal of all Chinese troops from Indian territory – though it falls between the different ‘perceptions’ of LAC of both sides – and removal of all constructions undertaken by the Chinese in the same area.
The Indian side is also going to raise the issue of the limits of patrolling by both sides, as conducted hitherto, and seek restoration. In the Pangong Tso area, Indian troops are not being allowed by the Chinese to patrol up to Finger 8.
India is also seeking a mutually agreed progressive reduction of heavy military equipment, such as artillery guns and tanks, from the rear areas of both sides. This is seen as a confidence-building measure to reduce tensions and a first step towards creating a more conducive environment for further talks.
The Indian side also wants China to stop objecting to infrastructure development activities well within Indian territory. The opening of the 255-km long Darbuk-Shyok-Daulat Beg Oldie road created opportunities for lateral roads, which led to objections from the Chinese.
While these talks are likely to be the first round of several talks to reduce tensions, there are a number of ways this could go depending on what the facts on the ground are. The ongoing debate has been on how far within Indian territory Chinese troops are.
If they are, as Shubhajit Roy and Sushant Singh note, within only the differing perceptions of the LAC, then India can push for a diplomatic solution that both sides could claim as a victory, as happened in Doklam in 2017. However, if Indian troops are 3-5 km into Indian territory, as defense analyst and Col. (retd) Ajai Shukla reports, then India will face a much more difficult choice: either use force to push the Chinese out of Indian territory and potentially risk an escalation of hostilities, or create leverage by making similar incursions against the Chinese in other areas to force a settlement.
There’s no saying how this all plays out for now. All we can do is keep watching closely.
For more on the history of India-China relations, why these stand-offs are taking place now, what China’s motivations might be, and India’s options to respond to the situation, check out these expert voices:
Dr. Ashley Tellis, Tata Chair for Strategic Affairs, in his latest publication “Hustling in the Himalayas: The Sino-Indian Border Confrontation”
Dr. Tanvi Madan, Senior Fellow and director of The India Project at the Brookings Institution, and her fantastic new book Fateful Triangle: How China Shaped US-India Relations during the Cold War.
Dr. M. Taylor Fravel, Arthur and Ruth Sloan Professor and director of the Security Studies Program at the Massachusetts Institute of Technology, in his article for The Washington Post “Why are China and India skirmishing at their border? Here’s 4 things to know.”
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India and Australia Hold a “Virtual Summit”
Prime Minister Narendra Modi and his Australian counter-part, Scott Morrison, held a unique “virtual summit” last week. The summit, which was earlier scheduled for January, had to be postponed due to the bushfire crisis in Australia. The summit concluded with a number of major policy announcements, deepening the bilateral relationship. In a joint statement published after the summit, both leaders agreed to “elevate the bilateral Strategic Partnership concluded in 2009 to a Comprehensive Strategic Partnership.”
The meat of the deliverables of the summit included a total of nine documents that were signed or announced after the summit, including a Mutual Logistics Sharing Agreement, a Framework Agreement on Cyber and Cyber-Enabled Critical Technology Cooperation, and an Implementing Arrangement concerning cooperation in Defence Science and Technology. Both countries also agreed to host a 2+2 meeting of their respective defense and foreign ministers to meet every two years.
Finally, both sides also issued a “Joint Declaration on a Shared Vision for Maritime Cooperation in the Indo-Pacific,” which stated:
As two key Indo-Pacific countries, India and Australia have an enduring interest in a free, open, inclusive and rules based Indo-Pacific region. They have a shared interest in ensuring freedom of navigation and overflight in the Indo-Pacific region, and maintaining open, safe and efficient sea lanes for transportation and communication. With a shared maritime geography and a deep and long-standing friendship, India and Australia are natural partners to work together towards realisation of this shared vision.
India and Australia are committed to supporting a rules-based maritime order that is based on respect for sovereignty and international law, particularly the United Nations Convention on the Law of the Sea (UNCLOS).
India and Australia have common concerns regarding the strategic, security and environmental challenges in the Indo-Pacific maritime domain.
There was also a lot of attention on one initiatives that was not yet announced, but has long-been a focus in India-Australia relations. Australia has long sought to be invited to the annual tri-lateral MALABAR naval exercises, which India hosts with the United States and Japan. Suhasini Haider and Dinakar Peri reported for The Hindu that “India is prepared to expand the Malabar trilateral naval exercise involving India, the U.S. and Japan, to also include Australia.” While the move was not announced during the summit, such an invitation could be expected “soon.”
The summit, with these major deliverables, has given a fillip to India-Australia relations, which have long been considered to be underperforming. While the two countries consistently have highlighted shared values and interests, they have (to borrow a phrase commonly used to describe U.S.-India relations) had to grapple with the “hesitations of history.”
However, this summit showcases how in, some ways, both countries are overcoming some of the hesitations. See this from Dr. Tanvi Madan, and India’s earlier hesitations about the “Quad”:
New Rifts in U.S.-India Trade Ties
The Office of the U.S. Trade Representative (USTR) announced on June 2 that it would begin “investigations into digital services taxes that have been adopted or are being considered by a number of our trading partners” under Section 301 of the 1974 Trade Act. This included India, which, the USTR noted in a Federal Register notice, had “adopted a 2% DST. The tax only applies only to nonresident companies, and covers online sales of goods and services to, or aimed at, persons in India. The tax applies only to companies with annual revenues in excess of approximately Rs. 20 million (approximately US$ $267,000). The tax went into effect on April 1, 2020.”
The move comes as U.S.-India trade ties have continued to worsen over the last few years, with both countries unable to resolve the growing number of issues despite two major pushes to reach a deal. Indeed, the prospect of a limited deal to address outstanding issues - such as the U.S. decision to revoke India’s benefits under the Generalized System of Preferences or India’s decision to raise custom duties and impose local content rules - was raised, both, during Prime Minister Modi’s visit to the United States in September 2019, as well as President Trump’s visit to India in February 2020. Both times, however, the two countries were unable to reach a deal.
Under President Trump, U.S.-India relations seem to be proceeding on two separate tracks. Strategic ties, particularly defense cooperation and greater alignment on a shared vision of the Indo-Pacific region, have proceeded at a fast clip, while economic and trade relations have soured with negative policy action on both sides.
Nowhere was that more evident than last week. On the same day as news broke of USTR’s 301 investigation, President Trump, in a phone call with Prime Minister Modi, invited India to join a next G7 summit to be hosted by the United States, dubbed the “G-11.”
So far, the worsening economic ties have not impacted progress on the strategic front. But that’s a risky assumption to make, especially as the window to reach an agreement on economic issues rapidly closing as the U.S. presidential election heats up.
For more on U.S. India ties, please read my policy memo jointly published by the Institute for South Asian Studies at the National University of Singapore and the Asia Foundation in March 2019.
In Other News
The President of India promulgated two new ordinances - the Farmers’ Produce Trade and Commerce (Promotion & Facilitation) Ordinance 2020, and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance 2020. These ordinances were announced as part of the as part of the ‘Aatmanirbhar Bharat’ (or Self-reliant India) economic relief package announced by the Prime Minister.
Minister for External Affairs, Dr. S Jaishankar, released a brochure outlining India’s priorities for its candidature for the UN Security Council 2021-22. India is a candidate for a non-permanent seat at the United Nations Security Council for a two year term beginning in January 2021.
The Election Commission of India announced new dates for elections to India’s Rajya Sabha, or the upper house of Parliament. The election for 18 seats spanning seven states will take place on June 19th, 2020. The decision comes after the Election Commission had postponed the elections, slated to be held on March 26, 2020, due to the COVID-19 pandemic.
The Chairman of the U.S. House of Representatives Committee on Foreign Affairs, Rep. Eliot Engel, issued a statement on the ongoing tensions along the India-China border, saying “I am extremely concerned by the ongoing Chinese aggression along the Line of Actual Control on the India-China border. China is demonstrating once again that it is willing to bully its neighbors rather than resolve conflicts according to international law.”
The Reserve Bank of India (RBI) released the minutes from its May 20-22 meeting of the meeting of the Monetary Policy Committee. The minutes included a statement by Dr. Michael Patra, Deputy Governor of the RBI, who said that “my view is that the damage is so deep and extensive that India’s potential output has been pushed down, and it will take years to repair” and that “aggregate demand would take time to return to pre-COVID levels.”
Western Coalfields, a subsidiary of Coal India announced the opening of three new coal mines, two in Maharashtra and one in Madhya Pradesh. The three plants together will produce an estimated 2.9 million tonnes of coal per year. Coal India has also stated that the coal mines will directly employ 647 person.
Three to Read
From cogent analysis to potentially big news that you should keep an eye on, here are a few commentaries and other pieces of writing that I found particularly enlightening.
Amb. Vijay Gokhale, former foreign secretary of India, argues in The New York Times: “The world needs balance — at the moment, no country other than the United States has the means to ensure it. At a practical level, its leadership is indispensable. But it’s more than that. The world needs American leadership to remind it that respect for freedom and human dignity provides the best path to a shared future of humankind. The Beijing model — where an authoritarian party-state single-mindedly exalts economic betterment over free political choice — may look attractive to some. But it cannot be widely emulated.”
Stephanie Findlay, South Asia Correspondent at The Financial Times writes: “When India put its 1.4bn people under one of the world’s strictest lockdowns, it centralised control of daily life. Everything seemed to require a permit or stamp, in an echo of the bad old days of the Licence Raj decades ago, when a rat’s nest of rules arbitrated by bureaucrats stifled the country’s economic growth. In 1991, India began to dismantle the socialist-era system of permits and regulations to move to a market-led economy. Red tape persists, but those radical reforms helped unleash growth, helping to lift millions from poverty. The pandemic has been an unwelcome flashback.”
Rudra Chaudhuri and Shreyas Shende, both of Carnegie India, provide recommendations for India’s Strategy in Afghanistan After U.S. Withdrawal, arguing: “The paper presents three sets of strategic actions that could, at least in part, mitigate the risks in question. These actions include adopting a broader diplomatic engagement strategy that accounts for the need to more urgently engage with all parties to the current conflict; continuing to economically support the democratically elected Afghan government and escalate military assistance to the Afghan National Security Forces; and lastly, working with and through other countries invested in Afghanistan’s future.”
Thanks for reading this latest edition of Indialogue. Please let me know if you have any thoughts or feedback by emailing me at aman@amanthakker.com.