But Modi regime wants robust India-China ties
Given Mr Narendra Modi's long standing ties with China, established during his tenure as Chief Minister of Gujarat, it was a foregone conclusion that under his rule at the Centre, relations between New Delhi and Beijing will improve significantly. The ball has already been set to roll towards this end. In the six weeks that Mr Modi has been in the Prime Minister's Office, he has already hosted Chinese Foreign Minister Wang Yi who visited New Delhi earlier this month. Now, Vice President Hamid Ansari is travelling to China. It's not only his first trip to the Middle Kingdom but also the first by an Indian Vice President in 20 years. later this year, India is expected to roll out the red carpet for Chinese President Xi Jinping, following which Prime Minister Modi will embark on a tour of China. These back-to-back visits, facilitating political engagement at the highest levels of leadership in New Delhi and Beijing, are not just proof of the importance that both sides attach to the relationship but also of the renewed interest and enthusiasm in the bilateral. In Beijing especially there is a lot of buzz about the Modi sarkaar and its focus on growth and development. As Prime Minister Modi re-starts the economic engine in New Delhi, Beijing looks forward to doing business with a resurgent India.
However, even though commerce has been the focal point of the India-China bilateral, the numbers from this sector have been less than promising. Much attention will, therefore, be on Minister of State (with independent charge) for Commerce and Industry, Ms Nirmala Sitharaman, who is part of the Vice President’s entourage. She will be meeting her Chinese counterpart Gao Hucheng and is expected to discuss the drop in bilateral trade, the widening trade deficit, India's unheeded demand for greater access to the Chinese market and China's unfulfilled promise on foreign investment.
In the first case, bilateral trade has declined from around $75 billion in 2011 to about $65 billion last year. At this rate, it seems unlikely that the two countries will be able to meet the $100 billion target that they had set for 2015. Much of this drop is attributed to the fall in Indian exports to China. This, in turn, has widened the already large and worrisome trade deficit, which had averaged at about $35 billion dollar in the past few years, to about $40 billion this year. Allowing Indian pharmaceuticals and IT concerns greater access to Chinese markets can help balance the books in India’s favour, but China has consistently resisted these efforts. With regard to investments, it has yet to put into India even a fraction of the kind of money it pumps elsewhere in the world. Every year, China invests about $100 billion globally while its Indian investment is just about $900 million. Much of this is in Gujarat, although a few other States have now sought a greater share of the pie. But given the ‘security concerns' associated with Chinese investments, the UPA regime had put most of these proposed projects on hold. Now, the Modi administration has begun moving the files — in fact, on the eve of the Vice President's China tour, the Government gave an in-principle approval for the Chinese to set up industrial parks around the country. But the great wall of distrust between the two nations will take time to break.