ISAS Working Papers

India-China relations are today less cordial but commercially buoyant. In most of the bilateral meetings both countries pledged to increase the bilateral trade volume and in 2015 have signed a strategic partnership. The relationship continues to be beset with tensions that ever so often erupt and threaten to derail efforts to manage the simultaneous rise of two giant economies and Asian powers. A trade balance vastly in favour of China rankles in India where fears for Indian manufacturing abound especially when contrasted with Chinese prowess. Issues of infrastructure, urbanisation, corruption and governance provoke regular stocktaking on the Indian side, leading to heated debates and discussions on the successes and failures of two different political systems. Strong, negative perceptions persist on both sides, characterised by deep sensitivities on political issues, most importantly, the activities of the Dalai Lama in India and the disputed border territories. Nationalism often threatens to boil over and is egged on by a dynamic media in both countries. Border incidents along the un-demarcated Sino-Indian border occur regularly and are often depicted as ‘incursions’ and in the effort to calm tempers, labelled as ‘transgressions’. Nonetheless, Chinese Premier Li Keqiang chose to make India his first port of call signalling that perhaps the regime in Beijing was allocating greater importance to Indian than in the past. What emerges therefore remains a confusing picture of Sino-Indian relations - on the one hand more cooperative and commercially resilient than ever before and on the other hand a relationship that continues to be vulnerable to distrust and nationalism. Reconciling this contradictory picture requires the posing of some concrete questions. Who makes India’s ‘China policy’ and who makes China’s ‘India policy’? To what extent are commercial stakeholders and military strategists involved in the process of policy-making on either side? Are there institutionalised forums within which disputes and concerns are regularly tabled and discussed? To what extent is the bilateral Sino-Indian relationship embedded within multilateral frameworks? What are the main drivers of India-China relations? Does trade continue to be the abiding priority on both sides or do emerging geo-political considerations look to shape the repertoire of concerns and ambitions? Can ‘Chindia’ become the fulcrum of a new Asian Equilibrium?