The Political Fix | Friday Links: Can India really boycott China? + Tanvi Madan on Indo-US relations post-Galwan

All the links you need on Indian politics & policy, plus an expert Q&A.

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“It is worth keeping in mind that it is the vision of India as a strong, prosperous or growing, democratic power that makes it attractive to the US as a counterbalance and a contrast vis-à-vis China—but also more broadly.

If India falters over time across those three dimensions, Washington will get disillusioned. As my book shows, that is part of what led to the unraveling of the India-US alignment in the 1960s.” 

That’s Tanvi Madan, senior fellow at the Brookings Institution and author of the recent book, Fateful Triangle: How China Shaped U.S.-India Relations During the Cold War.

We have a new format for the Friday Links editions starting this week.

Every Friday we hope to bring you a Q&A with an expert, scholar or author on a topic that is currently in the news in India – and recommendations for what else you should be reading on the subject. 

If you have suggestions for who we should reach out to or who you would like to hear from, write to rohan@scroll.in

But before we get to this week’s Q&A, here are your links: 

To boycott or not

There has been much talk about the need for Indians to boycott Chinese products and refuse to accept investment from China in light of the June 15 violence that led to the deaths of 20 Indian soldiers in Eastern Ladakh, with Beijing not revealing casualties on its side. (For the background, read the last two issues).

Despite talk of disengagement between the two sides, China continues to be the aggressor, with satellite imagery and reports confirming that not only is the Chinese tent that led to the June 15 violence back up, Beijing’s troops have also opened up a new front in Depsang. (Read Sushant Singh’s report for more details).

Amid all this, one question confronting Indians – even as the government plans extra tariffs on some Chinese products, considers banning Huawei or ZTE equipment for mobile operators and effectively forces marketplaces to identify the country of origin for products – is whether there is the wherewithal to actually wean India off of Chinese goods.

Here’s my colleague Shoaib Daniyal on this question:

For one, China is India’s largest source of imports by some distance. In 2018-’19, India imported goods worth $88 billion from China (including Hong Kong). This was more than 17% of India’s total imports. This figure is more than double what India imports from the United States, which is at the second place with goods worth US$ 36 billion.

Aside from the big picture numbers, which suggest India might be able to make some products at home (though it would be more expensive for the consumer), there are some sectors, like pharmaceuticals, in which dependence on China is overwhelming. And there’s also the matter of China’s not-insignificant investments in Indian startups.

Rathin Roy, echoed by Roshan Kishore, asked not if India can boycott China, but whether it should at all (in an interview which you should read because he also explains his decision to leave the government think tank, NIPFP):

“We are not buying Chinese goods today out of any love for China. Why are even our sewing needles manufactured in China? We are not able to manufacture even low-end products as cheaply as China is. And therefore it is a rational economic decision to buy something from somewhere when it is sold as cheaply as possible…

We have to grow up and do much more than just, in a fit of childish pique, say that we are boycotting Chinese products. We will have to put the hard work in to make things here that people of India want to consume and reduce our dependence on the rest of the world. We have to recognize that you cannot compete with China when so much of your GDP comes from low-end services.”

Linking Out

Q&A

Tanvi Madan is a senior fellow at the Brookings Institution and author of Fateful Triangle: How China Shaped US-India Relations During the Cold War.

I spoke to Madan about how the latest incident might shape ties between India and America going forward, and got recommendations on what someone new to the subject ought to read.

In your book, and in a recent piece for the Times of India, you argue that Indian policymakers have always believed they have time to deal with Beijing, which has often proven to be untrue. Do you believe that this conflict is a big enough jolt to change that perspective?

It’s too soon to tell. It’s been enough of a jolt that we have seen a hardening of views on China, and not just in the public. The [Indian] foreign minister has told his Chinese counterpart that the Galwan clash will have a “serious impact” on the bilateral relationship. There’s been a remarkable convergence among a number of India’s former diplomats who have served in Beijing—engaged with it—that China is primarily a challenge, this is watershed moment that will have serious repercussions, and that the relationship and the architecture of boundary agreements need to be reassessed. We have even seen some steps on the economic side, which might be a preview of further restrictions to come or a signal to China. 

Whether it results in a timely national effort to confront the challenge remains to be seen. As then Defence Minister George Fernandes pointed out in 1998, the “reluctance to face the reality” that China is a problem—and not a distant one—is “primarily rooted in having to face the challenges which accepting this situation or this reality will kind of confront you with.”

Governments have had other priorities—some very understandable ones. And accepting that China is a major challenge—one that is only increasing—will require making trade-offs that are not easy, including between how much you spend on defense versus development, prioritizing prosperity or economic self-reliance, the resources devoted to China versus Pakistan, and the desire for autonomy versus the necessity of alignment with partners. And each of these trade-offs involves a domestic politics versus security/prosperity trade-off. 

It’s not yet clear whether the jolt is sufficient enough to make leaders and the people willing to make the hard choices—even sacrifices—required. These choices are even tougher to make as India faces a trifecta of crises: a national security crisis, a health crisis, and an economic one. But they are not impossible. In fact, making one set of trade-offs can make another set easier. If you can expand your economic pie, for instance, it gives you more resources to spend on both development and defense.

Some believe India should now ally much more closely with the US. Others worry that the Trump administration is too inconsistent for that to happen. You argue in the book that certain conditions have to be met for India and the US to tackle the China challenge together. Are those conditions in place right now?

First, I’d note that this is not about alliance versus non-alignment. For one, the US is not offering or asking for a traditional alliance of the NATO sort. Second, you can’t think about non-alignment between China and the US the same way India thought about it between the Soviet Union and the US during the Cold War. This time, one of the major power competitors is an Indian adversary, to put it bluntly. So non-alignment is not an option overall.  

My book notes that an India-US alignment requires the two countries to agree on the nature of the China challenge, as well as its urgency and how to approach it. I think today you see convergence on many of those aspects, which is why there is already a fair degree of alignment between the two countries—as well as some other common partners. 

As long as those conditions sustain, I think the question ahead is how much closer this alignment will get i.e. the decision will not be about whether or not India will align with the US, but about the terms and extent of that alignment.

One caution: India and the US will not align on every issue. Indeed, even in terms of approach toward the China challenge, there are differences, including whether Russia is part of the solution or problem. But if those differences are managed well, they will not be insurmountable obstacles.  

Through much of the last decade, India was actively pushed by Washington as a counter to Beijing. But with India struggling to raise its economic stature under Modi (indeed, not matching the GDP growth of the 2000s), has India become less important to the US as a factor in China relations?

For a number of reasons, India has actually become more important for Washington in the China context.

For one, the rise of China and particularly its assertive global and regional behavior have made Washington more focused on the China challenge. It is seen from a more competitive prism than in previous decades—and not just by Republicans but by Democrats as well.

Second, the US has been looking for countries to burden share, and India has been willing to do more, especially in the region. Third, over the last two decades, Delhi has shown an increasing willingness and desire to work with the US and its allies and partners. Finally, even with slower growth than in the 2000s, India is a partner that can still bring a lot to the table. 

Nonetheless, it is worth keeping in mind that it is the vision of India as a strong, prosperous or growing, democratic power that makes it attractive to the US as a counterbalance and a contrast vis-à-vis China—but also more broadly. If India falters over time across those three dimensions, Washington will get disillusioned. As my book shows, that is part of what led to the unraveling of the India-US alignment in the 1960s.

You've argued that Washington needs to better understand India's need for diversification, despite a common view of China as a challenge. Do you believe there is sufficient understanding of this in policy circles in the US and the broader West?

I think there is more understanding among American policymakers of India’s diversification approach of maintaining multiple partnerships, and that it does not mean that India has equidistant relationships with every partner. However, it can still pose difficulties at the operational level—the Russia/S400 saga is a prime example. So while in general terms, Washington might comprehend why Delhi maintains a relationship with Moscow, American officials believe that India’s acquisition of this platform will complicate or limit greater interoperability between the American and Indian militaries in the future. 

In broader policy circles, there can still be a perception of non-alignment as an ideological concept rather than a diversification strategy. That can indeed lead to observers not recognizing how far Delhi and Washington have come as partners—and indeed what might be possible in the future. 

Having said that, I suspect we’ll see more understanding across the world of diversification. Many countries seem to be choosing a similar strategy in this more uncertain era and faced with competition between two countries (China and the US) with whom they have relationships. 

Indian External Affairs Minister S Jaishankar said in December that he "cannot overstate the importance of the flow of talent for Indo-American ties." How do you read the latest decision on H-1B visas and how that might affect Indo-US ties? 

I read it as a domestic political decision, one that will be debated over the next year or so. One reason why trade and immigration policy choices can be tougher to tackle in the bilateral relationship is because they involve domestic constituencies and politics. The H-1B announcement does complicate private sector decisions, and public perceptions.

These are not minor issues in the India-US relationship because business and people-to-people ties are an important part of it. However, I do not think it will be a deal-breaker for the relationship and I do not think the Indian government will make it one. The US is too important to them for other reasons—including strategic ones. Stakeholder on both sides will continue to make the case that Indian talent can help create jobs, and contribute to America’s post-COVID recovery. 

What does everyone – the media, the public, even other experts – get wrong about India-US relations or the India-US-China triangle?
Not wrong per se, but I think many continue to believe that China’s role in shaping the US-India relationship is a recent post-2000 phenomenon. 

What was one thing you didn't know before you began research for Fateful Triangle?
There are many things I did not know, which is what made the book interesting research and write.

But I did gain a better understanding from particularly my archival research, that policymakers are (1) operating under a series of constraints (e.g. resources, capacity, politics), and (2) often faced with sub-optimal choices from which to pick. 

What 3 books/podcasts/papers/articles should we read on the current moment or on the subject in general?

That’s all for this Friday Links edition of the Political Fix. Please send feedback or suggestions for who we should talk to next by writing to rohan@scroll.in.