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Is it Rational for India to Stand Between US-China Confrontations?

by Aakash Agarwal - 24 June, 2020, 12:00 473 Views 0 Comment

On 31st May 2020 the “Global Times” has published an article articulating that “it is advisable for India to stay away from the US-China confrontation”. “Global Times” is principally possessed by the Chinese government i.e. the communist party of China. Practically all the articles published here are in accordance with the Chinese foreign policy and the Chinese government uses it as a roundabout measure to pass on its messages to the external world without assuming any political liability. We have to remember this by India-China going up against one another at Ladakh outskirt.

What has happened so far?

News is coming that China is expanding its military at India-China border and comparably accordingly, India is additionally expanding the size of its trooper. Between this standoff between two Asian giants, the Global Times has published, “India has little to gain from engaging in a US-China conflict over any topic, with more to lose than gain”. It has threatened India that, “crippling Indian economy cannot afford any more shocks”.

Presently, the US-China pressures are raising over a wide range of issues, for example, COVID-19, Hong Kong, and the incorporation of Taiwan in the WHA meet. Numerous specialists have communicated their perspectives that another cold war has emerged between the two biggest economies of the world. The last cold war has been seen among the US and USSR which the US has won after the disintegration of the USSR. The Chinese mouthpiece has prompted India to be cautious under this circumstance and not to get included under this showdown. It has said, “If in a new Cold War, India leans toward the US or becomes a US pawn attacking China, the economic and trade ties between the two Asian neighbours will suffer a devastating blow. And it would be too much for the Indian economy to take such a hit at the current stage”.

What would we be able to decipher from this announcement? Is China intending to force extreme exchange obstructions on Indian exports? Or is it planning to suspend its exchange with India? A step followed like Pakistan. Or it is planning to hit the Indian economy with some other geopolitical move? Now, the question emerges that, is it extremely feasible for China to give a stun to the Indian economy? For the better comprehension of this issue, let us take a look at some measurable figures between the two nations.

Bilateral trade between both nations

During 2019-20, the reciprocal exchange among India and China remained around USD 85.2 billion where India sends out products worth just of USD 17 billion and imports around USD 68.2 billion accounts for an enormous exchange deficiency worth of USD 51.2 billion, which is highest among all of its trading partners. This demonstrates we are in a roundabout way refinancing an economy that doesn’t keep an uplifting disposition towards our nation. During the same period, the portion of China in India’s general exports was around 5.2 % though the portion of India in China’s general exports is simply around 3 % which shows that China is moderately a more significant export market for us than we are for China.

On the other hand, the portion of China in the general imports of India is around 14.2 % while the portion of India in the general imports of China is simply around 0.9 %. This demonstrates among the two Asian mammoths; India is relatively more dependent on the Chinese economy. In the most pessimistic scenario, on the off chance that China suspends its exchange with India, at that point, the Indian economy can confront a significant blow in the short run because of the reliance of India on Chinese imports.

Data Source: ITC Map

The figure shows the percentage share of China in the overall imports of India in the accompanying sectors. It shows the reliance of India on Chinese imports in these segments. Out of India’s all-out imports of silk, 69% originated from China. Correspondingly, out of India’s complete imports of electronic equipment, 41% originated from China. In particular, in the present situation, the medicines produced by the Indian pharmaceutical industry require active pharmaceutical ingredients (API) which we predominantly import from China.

Additionally, Chinese cell phones have immense strength in the Indian cell phone market. The piece of the overall industry of Chinese brands in the Indian cell phone market arrived at a record 66% during Q1 2019. Xiaomi remained the cell phone market pioneer in Q1 2019 with a 29% share, however, its shipments declined by 2% Y-o-Y.

Given the enormous reliance of Indian businesses on Chinese imports in the event that China out of nowhere stops its supply to India, at that point, this will really give a stun to the Indian economy. There is a likelihood that our enterprises may get deadened for some time. Although, India has a good understanding with the South Asian nations like Vietnam, Indonesia, that it will assist with resuscitating the Indian economy from this stun yet this requires a pre-arranging. In this way, it is better for the govt. of India to get ready ahead of time for such sort of potential outcomes.

Conclusion

Why is China giving such explanations from its side? Is China truly worried that India can line up with the United States? I feel that there is a gigantic chance that India would line up with the US since the US has as of now has reported the development of the G7 group which is a significant geopolitical development. The UK has additionally proposed a D10 gathering; it is a gathering of those nations which do not want China’s involvement in regards to 5G innovation in their individual nations. As of late, the US has given an explanation that they are prepared to collaborate in light of India and different nations keeping the capacities of the Chinese military.

By saying this, the US is showing that in the future they will frame China explicit unions to control war-like circumstances. This announcement gives influence to India. After this announcement, China has said that the circumstance at the India-China outskirt is levelled out and there won’t be any harm to any of the nations. In any case, China has sent a message through its paper that if India lines up with the US India may confront some reaction from China in the future. In this way, it is a superior procedure for India to plan ahead of time for any such prospects.

Aakash Agarwal
Aakash Agarwal
Author is Economics student at Doon University, Dehradun, India. He has a keen interest in foreign policies and International affairs.

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