India Not Giving in, Will Hold Its Ground against China

Abhinandan Mishra

12 July, 2020 12:00 AM printer

India will continue to hold its ground militarily and economically against China even as it continues to engage with the Chinese at the diplomatic level to ensure that the previous status quo that existed at the Line of Actual Control (LAC) until mid-April before the PLA moved into “disputed areas” is achieved.

“The talks are revolving around this broad premise. The situation on the ground has to go back to as it was in April. We have been telling them, directly and indirectly, that we have made up our minds (as to how seriously Indian government is seeing this whole development). The military presence on both sides is ‘huge’. Both of us know that things cannot be resolved by using force and ultimately it will have to be resolved through talks. Having said that, our attitude is of acting ‘aggressively’ now rather than waiting for things to happen on their own. Things are moving at multiple levels, the results of some of them will be seen in the coming days, and some in the coming months,” a government official said, while sharing the overall policy-wise sentiment of the Narendra Modi government which is dealing with one of its biggest challenges.

Last week, India banned the use of 59 mobile applications that were of Chinese origin while also banning the involvement of any Chinese company, including those which are working in joint ventures, to participate in the lucrative national highway projects in the country. The official source said that if things do not move at the LAC as the Government of India wants it to, in the coming few days, policymakers will be taking more decisions that will ensure that China does not get access to one of the biggest markets in the world.

“We are the biggest market in the world. In the coming days, it might happen that we will not allow their products or products of other MNCs that are being manufactured in China to be sold in India. The MNCs will have to shift their plants and factories to other countries if they want to sell their products in India. We might even have to take a decision regarding allowing Chinese goods using our supply routes to go to the West. Despite being affected by Covid-19, Indians have been spending more money than citizens of other countries. Come Diwali, if things do not improve at the LAC, the huge money that Indian consumers have been spending for years on Chinese goods, will be spent on products that are not of Chinese origin,” the official said.

The government, according to the official, has given enough signals to both public and private enterprises, officially and unofficially, that it will not encourage any more investments from Chinese companies as it wants to reduce Chinese imports to India by at least two-thirds of what it is now by the end of this year.

The first big step towards this objective, the official added, would be barring Chinese companies from investing and earning from the upcoming 5G market in India. “We have done our studies and we can bring the 5G environment without them (Chinese companies). However, Chinese telcos have already invested a huge amount of time and resources in anticipation of the 5G rollout. No option is off the table (regarding barring Chinese telcos),” the official added.

Another official stated that things are moving at a very rapid pace when it comes to recalibrating ties, especially when it comes to military coordination with the United States and Australia, both of whom have their own problems with Xi Jinping-led China.

“The Indo-Pacific Deterrence Initiative (PDI) is going to play a major role in the coming days in the region surrounding India. Australia is facing the same problems of an expansionist China and naturally we are working together in this context. China is fast losing influential friends across the world. Those who are sitting quietly right now, will have no choice but to take a call soon to secure their territorial integrity, including Nepal,” he said.

The first lot of Rafale fighters (six pieces), which were originally slated to be delivered in February-March next year, will now land in India by the end of this month. Earlier last month, Defence Minister Rajnath Singh, who was on a visit to Russia, made arrangements for the quick procurement and supply of additional arms and ammunition in the wake of the stand-off at the LAC. All the items on the procurement list, the official added, were accepted and will reach India soon.

The understanding among policymakers is that the economy will be running smoothly and would have recovered from the shock of Covid-19 by mid-September, October.

“Market sentiments are already on an upward trend, the worst is over and now demand will again come back, even if slowly, leading to normalcy of supply. A lot of money and food grains have been transferred into the system and they have already started reaching the beneficiaries. The result of other various government initiatives (related to economy) will start becoming visible soon,” another official said while explaining the reasons for the positive sentiments.

As per multiple independent surveys, India will continue to attract maximum investments, after China, in the Asia-Pacific (APAC) region in the coming months. According to the latest assessment by Bain & Company, a global management consulting firm (Asia-Pacific Private Equity Report 2020), though China remained the top market for investments, India’s challenge to its position at the top is intensifying.

The report stated that in 2019, investments in India grew faster than any other market across the region, taking its investment value higher than other major APAC economies such as South Korea, Australia, New Zealand and Japan. The country’s investment value was also higher than the Southeast Asia average. As per the report, there were more than 1,000 deals last year, a significant number of which were large deals in excess of $100 million. As a result, the overall sum of investments registered a 70% jump from 2018, and was more than 100% higher than the average of the previous half decade. In 2019, India’s internet and tech sector represented 28% of the Asia-Pacific market, twice its share in 2015.


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