10 June 2020
Since early May, the armies of China and India have engaged in regular clashes, resulting in the deployment of thousands of troops to their disputed border in the Himalayas. Neither side wants a full-scale escalation – the conflict has involved fistfights and rock-throwing, not shooting – but the standoff is a reminder of the fractious relationship between the world’s two most populous nations.
Aside from their territorial dispute, which led to a war in 1962, sources of Chinese–Indian friction include China’s close ties to Pakistan and India’s provision of sanctuary to the Dalai Lama. These tensions have worsened since the outbreak of the COVID-19 pandemic. India is pushing to replace China as the world’s manufacturing hub, particularly as the White House looks to decouple America’s economy from China’s. In the weeks before the Himalayan conflict broke out, India reportedly tried to lure 1000 US businesses away from China.
India is also reaching out to Australia, and for similar reasons – shared anxieties about China. This was evident last week, when Scott Morrison and Narendra Modi held a virtual summit and signed a series of security and commerce agreements. The agreements included a deal to allow the two countries access to each other’s military bases for maintenance and refuelling.
Morrison told Modi: “In a time like this, we want to deal very much with friends and trusted partners”. He did not explicitly state the converse – that he wants to reduce his dealings with partners he mistrusts. Yet, on the same day that he and Modi held their summit, Canberra announced plans to screen all foreign investment in “sensitive” assets. This move was motivated by fears that Chinese investment in communications, technology and other critical sectors poses a threat to national security. Unlike the United States, Australia cannot afford to economically separate from China. But Australia is starting to view its trade dependence on China as a risk, rather than a handy bit of good luck.
India, too, worries about the consequences of China’s economic clout. It has refused China’s offer to join the Belt and Road Initiative, fearing that the massive infrastructure scheme will increase China’s influence in South Asia. Meanwhile, despite its historical aversion to formal alliances, it has shown increasing willingness to cooperate militarily with the United States and US allies. The agreement between Delhi and Canberra announced last week was preceded by a similar deal with Washington in 2016.
Indian defence officials have also suggested that Australia may be allowed to participate in the annual Malabar naval exercise, in which India, the United States and Japan are partners. Canberra has long been keen to join the exercise, but Delhi has resisted its involvement, fearing it would be seen as a step towards cementing the four-nation security partnership known as the Quadrilateral Security Dialogue, or the Quad. In the past, India has been concerned that committing to the Quad might unnecessarily anger China. But, as the brawls continue in the Himalayas, and as China’s influence in South Asia grows, India is more willing to send a message of defiance to Beijing.
The summit between Morrison and Modi last week appeared to make less progress on trade than security. Talks on a free trade deal have been ongoing for almost a decade, without success. Modi’s push to further protect India’s agricultural and manufacturing sectors is unlikely to improve the prospects for an agreement.
The relationship between Australia and India has long seemed unfulfilled, partly because the countries’ leaders tend to overestimate the importance of their shared colonial heritage while overlooking their vastly different approaches to US power and alliances. The current alignment of interests between India and Australia is not being driven by their common belief in democracy and passion for cricket. China’s growing power is bringing them together – and this is more likely to lead to deals on accessing military bases than to deals on accessing markets.