A Reset in India-Nepal Relations

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Publication for Institute for South Asian Studies 

Summary
India and Nepal enjoy a close, yet complicated relationship. This has, however, gone downhill with the recent border controversy after the latter decided to redraw its map. The increasing dominance of China in the Himalayan state has led to further impediments. It is time for India to employ a broader communication strategy and have a transparent approach to restore the ‘special relationship’ with Nepal which is today interpreted differently by both sides.

Introduction
No two countries enjoy as close and as complicated a relationship as India and Nepal. In recent times though, it is the ‘complicated’ part that has been more on display. On every such occasion, Nepali political leaders invoke the spirit of nationalism with India getting blamed for being insensitive or, worse still, a bully and interfering in Nepal’s internal affairs. A pattern repeated over decades, this has strengthened an anti-Indian sentiment and also distorted perceptions of the positive aspects of the relationship. Both countries need to find a way out of this negative spiral. Partial tinkering will not resolve matters; what is needed is a thorough review enabling a reset that will be beneficial for both countries in the 21st century.

Kalapani Controversy
Recent months have seen a downturn in the relationship, this time triggered by the boundary issue of Kalapani. In May 2020, the Nepal government took an unprecedented step of issuing a new map of the country, that incorporated not only the 60 sq km of territory (Kalapani) on its western border, to which Nepal had first raised a claim in 1996 and about which both countries have had inconclusive discussions, but also added another adjoining 330 sq km by unilaterally changing the tributary of Kali river that constitutes the boundary between the two countries as defined in the 1816 Treaty of Sugauli between Nepal and the East India Company.

After the revised map was issued on 20 May 2020, it was introduced as a constitutional amendment proposal and adopted with overwhelming support. On 18 June 2020, President Bidhiya Devi Bhandari signed it into law. Any suggestions that such an irrevocable move would shrink any room for talks with India were swept aside in the rising swell of Nepali nationalism. Most of the opposition parties also voted in support of the amendment.

Source: Map from article by Kanak Mani Dixit and Tika P Dhakal in Scroll.in.

The immediate provocation was the virtual inauguration of an 80-kilometre long road from Ghatibagar to Lipulekh pass at 17,000 feet on the India-Tibet boundary. The track has long been the traditional route for Indian (and Nepali) pilgrims to reach Mount Kailash and Mansarovar lake in Tibet. It is also the pass for border trade between India and China since 1954. The road was in the making for a decade and at no stage had Nepal protested about its alignment.

After India issued new maps last November following the changed status of the state of Jammu and Kashmir into two separate union territories of Ladakh and Jammu and Kashmir, Nepal revived its request for holding bilateral talks on the Kalapani issue. Since the new map only dealt with the internal alignment of a provincial boundary and nothing changed in so far as the boundary with Nepal was concerned, the Indian response was lukewarm. India later suggested that meetings could take place after the COVID-19 crisis was over and regular travel between the two countries was restored. Since the road passes through Kalapani, Nepal interpreted it in May 2020 as a ploy by India to claim Kalapani.

Politics and History of Kalapani
However, the politics and history for Kalapani, like for most controversies in India-Nepal relations, is a little more complicated. K P Sharma Oli was sworn in as Nepal’s Prime Minister on 15 February 2018. His autocratic governance style had led to growing unhappiness among the opposition and within his own party but under the new Nepali constitution, a no-confidence motion cannot be admitted for the first two years. Political rumblings began in March 2020 and gradually, a move began within the Nepal Communist Party (NCP) to implement a one-person-one-post rule which would require Oli (who is Co-chair of the NCP and Prime Minister) to relinquish one of the posts. In end-April 2020, Oli issued two ordinances designed to help him out of his predicament but mounting public criticism forced him to withdraw these. A temporary truce with other NCP leaders was managed, with Chinese Ambassador Hou Yanqi playing a visibly active role in the rapprochement.

At such a moment, the controversy with India over territory was a political lifeline for a beleaguered Oli. He promptly donned the mantle of Nepali nationalism, vowing to restore Nepal’s territory. As a result, rumblings within the NCP subsided but these are likely to resurface and Oli will once again blame India for plotting his ouster.

Oli’s relationship with India is marred by mistrust. India had brokered the deal following the 2013 election between the Nepali Congress and the United Marxist Leninist (then headed by Oli) that split the prime ministership period between the two. However, India’s urging in September 2015 to delay the adoption of the new constitution to accommodate Madhesi demands was seen by Oli as a turnaround by India. He manoeuvred a deal with the Maoist party (the two merged before the 2017 election to form the NCP) and first took over a prime minister in October 2015. Faced with growing Madhesi protests, which often turned violent in the Terai (areas bordering India), against the constitution, movement of trucks from India to Nepal came to a halt. Oli accused India of mounting an economic blockade while India called it a disruption in supplies caused by the deteriorating security situation. The result was an acute shortage of essentials like liquefied petroleum gas, petrol, diesel, medical supplies and so on. As a landlocked country, Oli turned to China to negotiate access routes. After a few months, India relented and the situation was restored. In 2017, Oli successfully used his Nepali nationalist credentials of having stood up to India and led the NCP to a convincing electoral victory.

The history of Kalapani is equally mixed up. In the early years of the 19th century, Nepal’s territorial expansion brought it into conflict with British India and the resulting Anglo-Nepal war ended with the 1816 Treaty of Sugauli. The western boundary is defined as the Kali river which arises in the Himalayan mountains. No maps or coordinates are attached. The problem arises north of Garbyang village where a number of tributaries join to flow southward as Kali. Which of these tributaries is to be labelled as Kali? Survey maps of this period have kept changing with improved techniques and access to the remote area. However, as early as 1817, an exchange of letters makes it clear that Nepal’s attempt to lay claim to the villages Nabi and Kuti by using the western tributary as the Kali river was rejected (See Annex A). The subsequent survey maps indicated that the origin of the Kali river was the Kalapani springs, thereby giving the river its name.

“The whole of Kumaon became British territory and the only point in dispute was a small and unimportant tract to the north. By treaty the Kali was made the boundary on the east, and this arrangement divided into two parts parganah Byans, which had hitherto been considered as an integral portion of Kumaon as distinguished from Doti and Jumla. In 1817, the Nepal Darbar, in accordance with the terms of the letter of the treaty, claimed the villages of Tinkar and Changru lying to the east of the Kali in parganah Byans, and after inquiry had shown that the demand was covered by the terms of the treaty possession was given to Bam Sah, who was then Governor of Doti. But not satisfied with this advantage, the Nepalese claimed the villages of Kunti and Nabhi as also lying to the east of the Kali, averring that the Kunti Yankti or western branch of the head-waters should be considered the main stream as carrying the larger volume of water. Captain Webb and others showed that the lesser stream flowing from the sacred fountain of Kalapani had always been recognised as the main branch of the Kali and had in fact given its name to the river during its course through the hills. The Government therefore decided to retain both Nabhi and Kunti, which have ever since remained attached to British Byans.” (1)

Map from article by Sam Cowan

However, Nepali narrative often suggests that British India wanted to keep the Lipulekh pass with it in order to control Tibetan trade and hence redrew survey maps later. Nepal was not in a position to do much about it.

A new complication arose when the Nepali royalist regime, nervous after Maoist China’s takeover of Tibet in 1950, sought Indian assistance to man the Nepal-Tibet border. Eighteen border posts were set up and Nepal maintains that India removed all except one and this was on the basis of a tacit understanding between King Mahendra and Prime Minister Jawaharlal Nehru. However, this seems unlikely because King Mahendra was quite adept at balancing India and China. With deteriorating relations between India and China from 1959 onwards, he moved in 1961 to settle Nepal’s boundary with China which begins near Tinkar pass. This point is about 10 km further east of Lipulekh pass, reflecting the Indian perception of the India-Nepal boundary alignment.

The ground reality is that India and Nepal share an open border that allows for the free movement of people. Given the lack of infrastructure, the road would be seen as benefitting people on both sides of the border and consequently, its alignment did not raise concerns during the decade-long construction phase but became a convenient emotive issue at a time of domestic political instability. The inauguration of the road by the Indian Defence Minister, Rajnath Singh, on 8 May 2020 provided a ready catalyst.

Political Instability and Brinkmanship
The Kalapani background provides an illustration of how Nepal’s relations with India often get woven into its domestic politics and result in brinkmanship with India. This tendency is more visible in times of political uncertainty. Nepal’s political transition to a multiparty democracy, which began in 1990 has been a tortuous process. The tussle between political parties and the Palace, a decade long Maoist insurgency and emergence of new political forces finally led to a new constitution in 2015. The 250-year-old monarchy was abolished and Nepal was declared a federal republic with seven newly created provinces. The first election under the new constitution, held in 2017 made Oli the 26th Prime Minister in these 27 years, a clear indicator of the turbulent domestic politics of Nepal’s transition to democracy.

Yet, these peculiar aspects have been part of the relationship from the outset; it is just that these have now become more toxic. All political leaders when facing domestic persecution have found asylum in India, including the Maoist leaders when they were underground. This is not a new phenomenon. King Tribhuvan, whose powers had been constrained by the Rana regime, had sought asylum in the Indian Embassy with his family in 1950. However, this is what draws India into Nepal’s domestic politics. Hence, there is no surprise that the peace deal to end the decade-long Maoist insurgency in 2005-06 was brokered by India.

The Palace was adept at using the cover of Nepali nationalism for its manipulations of political factions in Nepal, frequently painting inconvenient politicians as “pro-Indian”. However, the Palace took care to maintain a relationship with Indian elites to ensure that communication channels remained open and brinkmanship did not make a situation irretrievable. It provided a degree of continuity in the relationship even with frequent changes of prime ministers. This is one reason why the 1950 Treaty of Peace and Friendship came into being and the unique institutional ties between the armies of both countries have contributed to the special relationship.

India-Nepal Special Relationship
The strong people-to-people relationships are rooted in a shared religion, language and culture and further cemented with ties of kinship. At a political level, it is reflected in the 1950 Treaty of Peace and Friendship. Today, this treaty is resented by large sections of the Nepali population who consider it an unequal treaty. Most Nepalis are unaware that it was Nepal’s rulers who had pushed for this treaty in order to maintain special ties with independent India that they had enjoyed with British India. A key driver was that Nepal’s security concerns had been heightened by the Maoist revolution in China in 1949 and its subsequent takeover of Tibet.

This treaty provides for an open border between India and Nepal and enables Nepali nationals to work in India without a work permit and enjoy ‘national treatment’ with regard to engaging in commercial and economic activity such as purchase of property, opening of bank accounts etc. Nepali citizens are allowed to apply for all government jobs in India except for the Indian Foreign Service, Administrative Service and the Police Service. Nepali citizens can join the Indian armed forces as commissioned officers and they have risen to the ranks of two-star generals. These provisions are extended to Nepali nationals on a non-reciprocal basis. Informal estimates put the number of Nepalis working and living in India at five million.

The treaty also has ‘secret’ side letters that were exchanged which have no longer been secret for over 50 years (See Annex B). These letters required Nepal to consult India on its defence requirements and provided India with the right of first refusal for projects relating to exploitation of natural resources, both of which Nepalis perceive as unfair. In actual practice, these provisions are no longer observed. For over a quarter century, India has repeatedly agreed to requests by successive Nepali prime ministers to review and update the treaty. Yet, each time the issue is suggested for inclusion in a bilateral agenda, Nepal prefers to sidestep the issue.

The 1950 treaty was drawn primarily from the 1923 treaty between Nepal and British India. The difference is that British India was an imperial entity. India inherited the role in 1947. However, it was not a super power as imperial Britain but a large poor country struggling to build its institutions and also a democracy that wanted to be perceived as a good neighbour. The dichotomy has proven difficult to reconcile, often leading to ups and down in India’s relations with Nepal. Interestingly, the same dichotomy has existed with respect to Bhutan but has been managed more successfully. The 1949 Treaty of Friendship with Bhutan was a legacy document and was replaced by a new treaty in 2007 with the introduction of a parliamentary democracy in Bhutan.

Another unique aspect of the close ties is the institutional relationship between the defence forces of the two countries. British India had begun recruiting Gurkhas into its army after the 1816 Treaty of Sugauli. In 1947, four of the 11 regiments became part of the British army and the other seven became part of the Indian army. A trilateral agreement between the United Kingdom, India and Nepal, signed in 1947. enabled India to continue recruiting Nepali Gurkhas for these regiments, which today consist of 39 battalions. The Maoists had sought to block this but local demand forced them to revise their stand. While annual recruitment is approximately 1,300, there are 125,000 ex-soldiers in Nepal who receive pensions and other benefits routed through the Indian Embassy in Nepal. Since 1950, both sides have a tradition of the Army Chief of one country being made an honorary general of the other army too.

Till the 1990s, there were no Nepali security personnel deployed on the 1,751 kilometre-long border. In 1996, Nepal deployed 410 army personnel to protect customs offices and other sub-offices in the Terai from Maoist insurgents. In 2001, India deployed a para-military force, Sashastra Seema Bal (SSB) on the India-Nepal border to enhance a sense of security in the border region, tackle problems of smuggling, narcotics, fake currency, trafficking of women, illicit weapons and also cross border movement of criminals. With the establishment of its Armed Police Force, Nepal set up 22 border observation posts in 2007 to coordinate activity with the 450 SSB posts. Today, Nepal has 123 posts and after issuing the new map, announced a decision to increase these by 100 next year and then gradually up to 500, to match the 533 posts currently maintained by the SSB. The growing presence of the security forces is bound to create an irritant for the people who have been used to free and unfettered movement.

Notwithstanding the political ups and downs, economic ties historically determined by geography and connectivity have grown. Two-thirds of Nepal’s foreign trade is with India, which also accounts for half the foreign direct investment into Nepal. The Nepali currency is pegged to the Indian rupee, giving it greater stability. India provides over 3,000 scholarships every year to Nepali students for high school, college and university education.

India has also maintained an extensive development cooperation programme in Nepal, building roads and highways, optical fibre links, medical colleges, trauma centres, polytechnics, schools, health centres, bridges and solar electrification in remote villages. For flood protection and embankment construction in Nepal, India provides more than US$10 million (S$13.9 million) every year. To facilitate cross-border movement of people and goods, India is providing US$40 million (S$55.7 million) to build four Integrated Check Posts on the border, US$100 million (S$139.3 million) to extend five railway lines into Nepal and another US$100 million (S$139.3 million) to enhance the road network in the Terai region, where rivers and streams during monsoon months hamper movement.

A lot of Indian assistance is geared to reach out into the rural areas. A three decade-long programme of providing iodised salt to be distributed to the remotest areas has virtually eliminated iodine deficiency disorders like goitre that were widespread. Every year, Indian doctors conduct more than 400 diagnostic and surgical camps in rural areas for treating cataract and trachoma patients. Nearly 500 ambulances and 100 school buses have been given to primary health centres and schools in remote areas.

Disbursements of pensions, medical and social welfare programmes to the 125,000 ex- servicemen and their families cost US$1.7 billion (S$2.3 billion) annually. Following the 2015 earthquake, Indian disaster relief teams became the first responders, reaching the affected areas within two days, while the Indian government pledged US$1 billion (S$ 1.3 billion) for reconstruction. Such programmes ensure a positive people-to-people relationship which is in contrast to the anti-Indian narrative that periodically emerges from Kathmandu; aggravated during periods of political infighting.

Nepali Nationalism and a New China
Nepal’s mountainous geography has made for a highly diverse and stratified society. It has traditionally been ruled by the hill upper castes (Bahuns and Chettris) that constitute 29 per cent of the population. Together with the five per cent of Newars, these are the more prosperous, urbanised elite. The indigenous hill tribes (Magars, Gurungs, Rais, Limbus and Tamangs) are 30 per cent. The Terai based population is 25 per cent Madhesis (with similar caste structures as on the Indian side of the border leading to close kinship ties), four per cent Muslims and seven per cent Tharus (indigenous plains tribals). Till 1958, the Madhesis needed a permit to enter the Kathmandu valley. Leadership of the traditional political parties has invariably been drawn from the hill elites. Rising political consciousness among the Madhesis and tribals became the driving force behind identity politics in recent decades and behind the demand for a federal structure when the new constitution was being drafted.

Frequent recourse to the anti-Indian narrative by Nepali politicians when they are in opposition and the need to blame the government for being pro-India has imposed an economic cost because the roles of government and opposition get reversed fairly soon and the story keeps repeating. An example is the hydel sector. Nepal today has a power generation capacity of 1,000 megawatts (MW) and needs to import 500 MW from India to meet domestic demand even though it has a hydel potential of over 50,000 MW. On the other hand, Bhutan has an installed generating capacity of 1,500 MW and exports three-fourths to India, which has boosted its per capita income to four times that of Nepal.

One aspect that has changed in Nepal is China’s growing presence and role. Nepali leaders, beginning with King Mahendra in the 1960s, have been adept at playing the China card to extract a better bargain from India. China maintained good relations with the Palace and this enabled it to address its security concerns regarding the Tibetan refugee community’s activities. For the rest, its consistent advice to Nepali leaders was to maintain good relations with India, given its close links. With the abolition of the monarchy, China has been actively pursuing outreach with the political parties and has begun to play a visible role in domestic politics. Its growing economic weight positions it as a potential development partner and Nepal has enthusiastically joined in the Belt and Road Initiative. Oli’s marked tilt towards China has taken place at a time when China is actively expanding its presence in South Asia and the Indian Ocean region, heightening India’s concerns. This makes it clear that India needs to invest more deeply in its policy towards Nepal as any neglect will extract a higher political cost than was the case earlier.

Need for a Review
The time has come for India to undertake a thorough re-assessment of its Nepal policy and the premises on which it was based. Political instability and a young democracy, abolition of the monarchy, federalism, rising discontent among the Madhesis (and other marginalised groups), a youthful population with a median age of 24 years and a growing Chinese role, have altered the ground realities of Nepal. The current impasse over the new maps has made early resumption of dialogue unlikely. Perhaps this is just as well for it provides India with time to reflect on how it wants to shape its relationship with Nepal to mutual advantage.

Political brinkmanship and frequent recourse to Nepali nationalism has contributed to the narrative of anti-Indianism that India can no longer afford to ignore. Earlier, opposition leaders would whip up nationalist emotions to accuse their government of being pro-Indian and then privately explain it to Indian leaders as the route to gain power while assuring them of fully backing stronger India-Nepal relations once they were in authority. Once in power, as the honeymoon period ends, they would find it difficult to deliver on their assurances, blaming the opposition for queering their pitch. Nepal’s failure to exploit its hydel power potential is a pertinent example of how this has stymied development in this critical sector. In the age of social media, the old ‘wink-and-nod’ style of diplomacy no longer works. Brinkmanship tips over the point of no return as the case of the Kalapani map demonstrates.

Nepal’s intellectual elite attributes its new found assertiveness to its young democracy. Recalling the ‘special relationship’ is often seen as a throwback to earlier years when issues were managed behind the scenes. Frequent reiteration of shared religious, cultural and linguistic ties is perceived as a stifling closeness. Invoking the rhetoric of ‘roti beti ka rishta’ (ties of sharing bread and through cross-border marriages) is increasingly associated with the Madhesis though the hill elites also enjoy significant kinship ties across the border. India needs to employ a more innovative communication strategy based on transparency. Only then can the cobwebs of myths surrounding the ‘unfair’ treaties of the past be removed.

This does not mean disengagement but actually implies engagement at multiple levels, conscious of a new Nepal’s sensitivities. It also means that India should refrain from actions that antagonise the people of Nepal as it learnt in 2015 when the Narendra Modi government was blamed for the ‘blockade’ causing widespread economic hardship. There are two other lessons that India needs to draw from 2015. Rising Madhesi political consciousness has led the hill elite to tag them as Indian ‘fifth columnists’ which does the Madhesis a disservice. Oli successfully projected the Indian blockade as further evidence of Indian links with the Madhesis as they were the ones protesting against the new constitution. Too close an identification with any group that accounts for 25 per cent of the population is not a good position for India to be placed in. The second lesson is that Nepal should be seen as a foreign country and not as a factor to be used in India’s domestic politics. There was a widespread assumption that with Assembly elections in Bihar scheduled for November 2015, a pro-Madhesi posture would help the Bharatiya Janata Party (BJP) which had been trailing. As it transpired, the strategy did not work and when India relented because of widespread criticism, some Madhesi leaders accused India of letting them down.

Some pro-Hindutva elements linked to the BJP believe that shared ties of Hinduism, invoked by talking about Kashi Vishwanath in Varanasi to Pashupatinath in Kathmandu (both old Shiva temples) or Ayodhya in India and Janakpur in Nepal (birthplaces of Ram and Sita), are the permanent glue that bind the two countries. However, this is a delusion. Nepal is a sovereign state and Nepalis are not swayed by religious sentiments when it comes to sensitive sovereignty-related issues. It is worth recalling that an innocuous comment by a popular Bollywood actor Madhuri Dixit some years ago that Nepal seemed much like India was criticised as being a sign of Indian expansionism or that riots had erupted in Nepal when it was alleged that another popular actor, Hrithik Roshan, had made anti-Nepali remarks in a television interview, an allegation that later turned out to be baseless.

The beginning has to be made with the 1950 Treaty of Peace and Friendship which is seen by a majority of Nepalis as a symbol of what is wrong in India-Nepal relations and is at the core of the ‘special relationship’. India should stop going along with the Nepali tactics of blaming India for an ‘unfair treaty’ but shying away from discussing what to do about it because it would push them to acknowledge the special advantages that it provides to Nepal. As the larger country, India needs to make it clear that it will be generous and that it is not seeking to impose reciprocity.

However, all issues arising from the special relationship will need to be put on the table. These would include open borders and visa free travel, non-reciprocal privileges available to Nepali nationals, trade and transit issues, linkages between institutions like the two armies, joint river embankment and flood management, security cooperation if there are going to be border controls and so on. While not all can be covered in a single treaty, how these will be dealt with will depend on how the two sides agree to recast the fundamental premises of the bilateral relationship.

The primary negotiations will be among political leaders and officials but India will need to employ a much broader communication strategy, consisting of appropriately tailored measures, to address all sections of the Nepali population. A more transparent approach is necessary so that a balance can be restored to the ‘special relationship’ which today is interpreted differently by both sides. The political leaders will have to take their respective parliaments into confidence. Hopefully, this will provide a clearer measure of the benefits to people on both sides while removing those contentions that have accumulated a baggage of mistrust. It is an exercise that needs political maturity but will stand both countries in good stead in meeting the challenges of the 21st century.

NOTES

(1) Excerpt from The Himalayan gazetteer, vol. 2, part. 2, by Atkinson, Edwin T. (1884), page 679e.

Annex A

Appendix-IV

Letter of the Government of India to Commissioner of Kumaon, September 5, 1817.

To

G.W. Traill Esqr.
Commissioner for Kemaon.

Sir,
I am directed to acknowledge the receipt of your dispatch of the 20th August with the several documents stated to be enclosed.

  1. The Governor General entirely approves your having declined to transfer to the Chountra Bum Sah the two villages of Koontee, and Nabbee in Pergunah Byanse without the specific orders of Government on the ground of their being situated to the west of the stream ordinarily recognized as the principal branch of the Kali in that quarter.
  2. On examination of the maps transmitted by you and of the facts and circumstances detailed by yourself and Lieutenant Webb has left no doubt on the mind of the Governor General that the stream denominated Kala Panee is that which is to be considered as the principal branch of the Kali and as such it is to be held the boundary between the possessions of the two states as a question of equity and just construction of the Treaty therefore our retention of those villages cannot be objected to. It appears on the other hand from your report and Lieutenant Webb’s, that considerable inconvenience would result from their surrender to the Nipaulese on these considerations then, His Lordship has determined not to relinquish any portion of Pergunah Byanese lying to the Westward of the Kala Panee and you will accordingly be pleased to intimate this resolution together with the grounds of it to Chountra Bum Sah.
  3. You are authorized to pay to Buh Sah Sonat Rupees 140.13 on account of the Revenues of the Villages of Tinkar, and Chaunguroo.
  4. A copy of this letter will be transmitted to the Resident at Catmendhoo whom the Governer General concluded you have furnished with a copy of your dispatch and its enclosures if not, you will be pleased to do so without delay.

I have the honour to be
On the ganges Signed I Addam
Above Allahabad Secy, to the Governer General
5th September 1817

A True Copy
Sd / –
Secy to the Gov. General.

Annex B

Treaty of Peace and Friendship and Letter of Exchanges, extracted from Bhasin, A. S. (2005). Nepal-India, Nepal-China Relations: Documents 1947-June 2005. Nepal-India.

Volume-I, page 94-98

Providing Direction To India-EU Relations

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Publication for Institute for Study of International Politics

Summits are occasions to provide a sense of direction and the 15 th India-EU summit to be held in virtual mode on 15 th July is no exception. Prime Minister Narendra Modi, European Council President Charles Michel and European Commission President Ursula von der Leyen are fully aware that their meeting is taking place in unusual times when both India and EU are facing new challenges. The COVID-19 pandemic has accelerated many trends, both political and economic, that were barely discernible when the last summit took place in Delhi in October 2017.

From 2017 to 2020
Recall, France had elected its youngest president in Emmanuel Macron and in Germany, Chancellor Angela Merkel won an unprecedented fourth term, pushing back decisively against the populist trend that had been gaining ground as UK under PM Theresa May had commenced Brexit negotiations. President Trump had taken over and his statements about ‘America First’ had only strengthened European determination for ‘more Europe’ as the way forward and a democratic India would be a key partner.

The 53 paragraph long Joint Statement that issued in 2017 provided a rich menu for cooperation – human rights, counter-terrorism, outer space, cyber space, climate change, renewable energy, sustainable development, skill development, education, migration, water management, science and technology – these were all areas where India and EU had or were committed to having bilateral dialogues. In addition, there were paragraphs referring to common positions on a host of other issues – G-20, WTO, Afghanistan, Libya, Syria, Ukraine, Middle East Peace Process, Myanmar, Iran nuclear deal (JCPOA), Africa – reflecting the wide range of foreign and security policy consultations.

The India-EU annual summit process began in 2000 and the twelfth summit was held in 2012. The thirteenth took place after five years and this time too, it is taking place after a gap of three years. Why these long gaps? The answer lies in the fact that though the menu has been vast, it lacks depth. Differences have persisted on fundamental issues that have prevented substantial forward movement. So, the 53 para Joint Statement may reflect good optics about the breadth of the relationship, the fact that the next summit is taking place after three years means that the depth is lacking and fundamental gaps still need to be bridged.

Getting Rid of Bottlenecks
Politics is like riding a bicycle; one has to keep moving forward because standing still is not an option. India and EU launched negotiations on an ambitious Broadbased Trade and Investment Agreement (BTIA) in 2007 but these negotiations stalled in 2013. In the run-up to the 2017 summit, efforts to overcome the differences failed and the Joint Statement merely “noted the ongoing efforts of both sides to re-engage actively towards timely relaunching negotiations” for a BTIA.

In seven years, India-EU trade has grown but remains much below its potential. Unlike with some other partners, India and EU enjoy a balanced trade relationship with bilateral trade (in goods) at over Euros 100 billion and trade in services adding another Euros 40 billion. EU companies have invested Euros 90 billion and Indian companies that came in much later have invested Euros 70 billion in EU states. During these seven years, new trade and investment issues have been added. Keeping negotiations at an impasse creates an illusion but the reality is different. Both sides need to display political leadership and commitment to get the relationship out of this morass. If a BTIA is not considered possible then the infructuous exercise should be terminated and more modest agreements salvaged in areas where it is possible.

Basis For A Reset
This requires both sides to undertake a serious internal review. India needs to assess the merits of an agreement with EU now that RCEP does not appear to be on the cards. Brussels needs to push more with individual member states to soften their stands on their pet product lines so that India does not get frustrated about carrying out 27 separate negotiations. COVID-19 is bringing about fundamental changes in international trade patterns and altering supply chains driven in the direction of greater resilience.

EU’s core strength lies in a 440 million strong affluent consumer market that provides it with considerable regulatory clout in areas where Brussels enjoys authority. In such sectors as food safety, environment and labour standards, industrial safety and now with GDPR in data privacy, Brussels has competence and has developed technical capability.

However political solidarity has been severely tested during the COVID -19 crisis as it was seen as a national issue. Instead of the old response of ‘more Europe’, member states reacted by putting up walls going against the fundamental tenets of free movement of goods, services, capital and people. This has forced EU leaders to undertake serious introspection about its internal divisions, between ‘old Europe’ and ‘new Europe’, between liberal democracies and ‘illiberal’ democracies, and between the ‘frugal states’ and the weaker economies.

In addition, EU also needs to contemplate a future with a weaker trans-Atlantic alliance. This affects not just NATO members but also the non-NATO EU member states. And more crucially, it forces the EU to figure out whether it can adopt a common approach towards China.

In 2012, China launched a new cooperation programme with central and east European countries and with the recent addition of Greece, it now stands at 17+1. Of the 17, 12 are EU member states. In march, EU adopted new foreign investment screening regulations to bring about greater intra-EU harmonisation. The underlying concern was that in a COVID battered economies, European companies should not become easy pickings for Chinese cash rich entities. However, states are bound to take ‘utmost account’ of the EC’s advice but retain the final authority as a sovereign right.

India is in the middle of fundamental changes in its relations with China too. Recent incidents have shown that the old modus vivendi has broken down. There are many new areas that can bring EU and India together in a more meaningful and productive partnership because of a shared faith in democracy and an open, rule-based order. To achieve such a result at the 15 th India-EU summit, PM Modi and Presidents Michel and von der Leyen must get the legacy bottlenecks out of the way and set clear directions for the future course.

Iran Ties Need Quiet Diplomacy

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Published in The Hindu on 18th July, 2020

Recent reports that Iran’s Transportation Minister Mohammed Eslami had launched the track laying programme for the 600 km long rail link between Chabahar and Zahidan last week sparked concerns that India was being excluded from the project. Iran has since clarified that it is not the case and India could join the project at a later stage. This keeps the door open for IRCON
which has been associated with the project even as India continues with the development of Chabahar port.

Connectivity for Afghanistan
Providing connectivity for Afghanistan through Iran in order to lessen its dependence on Karachi port has enjoyed support in Delhi, Kabul and Tehran since 2003. Chabahar port on Iran’s Makran coast, just 1000 kms from Kandla, is well situated but road and rail links from Chabahar to Zahidan and then 200 kms further on to Zaranj in Afghanistan, need to be built. With Iran under sanctions during the Ahmedinejad years (2005-13), there was little progress. IRCON had prepared engineering studies estimating that the 800 km long railway project would need an outlay of $1.5 billion. Meanwhile, India concentrated on the 220 km road to connect Zaranj to Delaram on the Herat highway. This was completed in 2008 at a cost of $150 million.

Things moved forward after 2015 when sanctions on Iran eased with the signing of the JCPOA. An MOU was signed with Iran during Prime Minister Modis’s visit to Tehran in 2016 to equip and operate two terminals at the Shahid Beheshti port as part of Phase I of the project. Another milestone was the signing of the Trilateral Transit and Transport Corridor treaty between Afghanistan, Iran and India. In addition to $85 million of capital investment, India also committed to provide a line of credit of $150 million for port container tracks. Phase I was declared operational in 2018 and India’s wheat shipments to Afghanistan have been using this route. An SEZ at Chabahar was planned but re-imposition of US sanctions has slowed investments into the SEZ.

India was given a waiver from US sanctions to continue cooperation on Chabahar as it contributed to Afghanistan’s development. Despite the waiver, the project has suffered delays because of the time taken by US treasury to actually clear the import of heavy equipment like rail mounted gantry cranes, mobile harbour cranes etc. With regard to the rail-track project, a financing MOU was signed under which India undertook to provide $500 million worth of rolling stock and signalling equipment including $150 million of steel rail tracks. In fact, the railway tracks currently being laid are those supplied by IRCON. Iranian responsibility was for local works of land levelling and procurement. The MOU between IRCON and Construction and Development of Transport Infrastructure Co expired last year. Further, the Iranian company undertaking some of the works, Khatab al Anbiya was listed by the US as Special Designated Entity leading IRCON to suggest to the Iranians to appoint another contractor.

Meanwhile, Iran has ambitious plans to extend the railway line from Zahidan to Mashad (about 1000 kms) and then another 150 kms onwards to Sarakhs on the border with Turkmenistan. Another plan is to link it with the INSTC towards Bandar Anzali on the Caspian Sea. In 2011, a consortium of seven Indian companies led by SAIL had also successfully bid for mining rights at Hajigak mines in Afghanistan that contain large reserves of iron ore. However, developments at Hajigak remain stalled because of the precarious security situation in Afghanistan continues.

Why Iran Needs China
In 2016 January, just as sanctions were eased, Chinese President Xi Jinping visited Tehran and proposed a long term comprehensive, strategic partnership programme that would involve Chinese investment in Iranian infrastructure and assured supplies of Iranian oil and gas at concessional rates. Reluctant to be tied in too close a Chinese embrace, Iran kept the negotiations going for years. China patiently permitted a limited barter trade; SINOPEC prolonged its negotiations on developing the Yadavaran oilfield while CNPC pulled out of the South Pars gas project last year, after initially promising to take over the French company Total’s stake.

Meanwhile tensions in the region have been growing since last year with missile strikes in Saudi Arabia claimed by the Houthis and a US drone strike in January killing IRGC chief Gen Qassim Soleimani. During the last four weeks, there have been more than half a dozen mysterious explosions including at the ballistic missile liquid fuel production facility at Khojir, advanced centrifuge assembly shed in Natanz and the shipyard at Bushehr. Reports attribute these to US and Israeli agencies in an attempt to provoke Iran before the US elections.

In May, US announced that it wanted UN Security Council to continue the ban on Iranian acquisition of conventional weapons. UNSC Resolution 2231 was adopted in July 2015 by consensus to endorse the JCPOA and contains a 5-year restriction on Iran’s importing conventional weapons that ends on 18 October. Even though US unilaterally quit the JCPOA, it is threatening to invoke the automatic snapback of sanctions provisions of JCPOA. UK and France have criticised US duplicity but are unlikely to exercise a veto. At the same time, Iran hopes that November may bring about a change in the White House that opens options for dialogue.

Iran’s Balancing Act
Just as it has been a tricky exercise for India to navigate between US and Iran to keep the Chabahar project going, the Rouhani administration has found it difficult balancing act to manage the hardliners at home while coping with Trump administration’s policy of ‘maximum pressure’.

Russia and China are the only countries to veto US moves in the UN Security Council. Even so, the Iran- China comprehensive, strategic partnership roadmap has run into opposition in the Majlis. After the recent elections, the Reformists are down from 120 seats to 20 while the Principlists (Conservatives) are up from 86 to 221 seats in a house of 290 members. A former IRGC Air Force commander Mohammed Ghalibaf, former Mayor of Tehran who ran unsuccessfully for President against Rouhani in 2013 and 2017 has been elected the new Speaker. Hard liners have accused Foreign Minister Zarif of undue secrecy surrounding the agreement amid rumours that China may be taking over Kish island and that Chinese troops would be stationed in Iran to secure Chinese companies and investments.

Iran may well be considering a long-term partnership with China but Iranian negotiators are wary of growing Chinese mercantilist tendencies. It is true that China has greater capacity to resist US sanctions compared to India but Iran realises the advantage of working with its only partner that enjoys a sanctions waiver from US for Chabahar since it provides connectivity for land-locked Afghanistan. Iran and India also share an antipathy to a Taliban takeover in Afghanistan. This is why Iran would like to keep the door open. Nevertheless, India needs to improve its implementation record of infrastructure projects that it has taken up in its neighbourhood. There are numerous tales of Indian cooperation projects in Nepal, Bangladesh, Sri Lanka, Myanmar etc suffering delays and cost over-runs that only make it easier for China to expand its footprint in our neighbourhood. The key is to continue to remain politically engaged with Iran so that there is a better appreciation of each other’s sensitivities and compulsions.

Writings On The Chinese Wall

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Publication for Observer Research Foundation

There is an old saying – coming events cast their shadows before them. This is certainly true in India-China relations. For three years prior to the 1962 war with China, there were clear signs that disagreements on the border were becoming sharper but Prime Minister Jawaharlal Nehru was unwilling to believe that China would resort to war.

And yet again, in recent years India has ignored the writing on the Chinese wall, assuming that the slew of agreements signed, beginning in 1990s would ensure a peaceful border. Prime Minister Narendra Modi was perhaps so convinced of the virtues of his personal diplomacy with President Xi Jinping over 18 summits since 2014 that the darkening shadows cast by the cumulative evidence of increasing incursions and what these implied were disregarded. Even as the official statements talked of disengagement to ease the 45-day stand-off, the gloves came off and more than 20 Indian soldiers were killed in the fighting at Galwan Valley in Ladakh on the night of 15-16 June. Unconfirmed reports put the number of Chinese casualties at over 40.

These are the first casualties since October 1975 when four Indian soldiers from Assam Rifles were ambushed at Tulung La in Arunachal Pradesh. In keeping with the three-decade old understanding, no shots were fired; the present casualties resulted from iron rods, batons studded with barbed wire, stones and hand to hand combat which only makes it more grisly. Why have things come to such a pass when India and China have concluded multiple agreements regarding maintenance of peace and tranquillity and confidence building measures during the last three decades? How did India fail to register the changing ground reality?

The current priority will be to restore normalcy to the border through negotiations leading to disengagement and restoration of status quo ante. However, the important challenge is for India to undertake a deeper examination that has been long overdue about the premises on which its China policy has been conducted in recent decades. Growing evidence in the last decade would indicate that these premises are in need of review and many of the understandings based on them have outlived their utility.

The 1988 Opening With China

The process of re-normalising ties with China after the 1962 war began in 1988 with the visit of Prime Minister Rajiv Gandhi when both countries agreed to put the boundary dispute on the backburner and focus instead on building economic, commercial and cultural aspects of the relationship so that a more conducive environment could be created over time that would enable both sides to address the boundary issue. A Joint Working Group on Boundary Question was also set up to keep matter under review.

The underlying thinking on both sides was that while neither side was in a position in 1988 to be able to achieve an acceptable solution to the boundary dispute, hopefully, after a passage of time, it would be better placed to reach an outcome that would be better and more acceptable. Such an assumption on both sides would only be natural and reflective of a sense of pragmatism that led to the shift in the relationship in 1988.

The first major development thereafter was the Agreement on the Maintenance of Peace and Tranquillity along the Line of Actual Control in the India-China Border Areas, concluded in 1993. The clunky title reflected a compromise. The concept of a Line of Actual Control (LAC) had been suggested by the Chinese Premier Zhou Enlai to Prime Minister Nehru in his letter dated 7 November 1959 “as the line up to which each side exercises actual control”. This was significant for settling the boundary dispute in the western sector while in the eastern sector, the Chinese leader suggested that the LAC coincided broadly with the 1914 McMahon line. Nehru rejected the notion because India considered the India-China boundary in the western sector to be defined by the 1865 Johnson Line, a point disputed by China.

Following the 1962 war, China asserted that it had withdrawn 20 kms behind its claimed LAC, a notion that India had never accepted. India took the stand that China had illegally occupied Aksai Chin area which was part of Indian territory. The language of the 1993 Agreement marked a shift by acknowledging the LAC. The shift was justified on the ground that the reference to the LAC was without qualifying it either as the 1959 or the 1962 LAC; this enabled India to claim that it interpreted the reference as its own version of the LAC.

Para 1 of the 1993 Agreement commits both states to resolve the boundary question “through peaceful and friendly consultations” and that pending an ultimate solution, “the two sides shall strictly respect and observe the line of actual control between the two sides”. However, given that India and China did not share a common understanding of the LAC, the 1993 Agreement added “In case the personnel of one side cross the line of actual control, upon being cautioned by the other side, they shall immediately pull back to their own side of the line of actual control . When necessary, the two sides shall jointly check and determine the segments of the line of actual control where they have different views as to its alignment”. This fudge or creative ambiguity lay at the heart of the 1993 Agreement.

This was followed three years later by the 1996 Agreement on Confidence- Building Measures in the Military Field Along the Line of Actual Control in the India-China Border Areas. Since India and China perceived the LAC differently, any use of this term had to be accompanied with the phrase “in the India-China Border Areas”. Both sides agreed to reduce military presence in these areas and also added constraints on the size and nature of military exercises in these areas. Both sides also committed not to “open fire” within two kilometres of the line of actual control. Evidently this restraint was observed at Galwan even though more barbaric means were employed.

A significant addition was in Article X – “Recognising that the full implementation of some of the provisions of the present Agreement will depend on the two sides arriving at a common understanding of the alignment of the line of actual control in the India-China border areas, the two sides agree to speed up the process of clarification and confirmation of the line of actual control”. It reflected the realisation that differing perceptions of the LAC carried the potential for misunderstanding and conflict. The common understanding was to be reached through exchange of maps, an exercise completed for the middle sector (pertaining to the border falling in Uttarakhand and Himachal Pradesh) in 2001 as this was the least contentious; thereafter the process stalled.

Realising that the Joint Working Group on Boundary Question was unable to get around politically sensitive boundary issues, a new dialogue channel was added following PM Vajpayee’s visit to China in 2003. Both sides agreed to appoint a Special Representative (SR) “to explore from the political perspective of the overall bilateral relationship the framework of a boundary settlement”. On the Indian side, the National Security Adviser has been the SR while on the Chinese side it has been the State Councillor; currently Foreign Minister Wang Yi also holds this position and is the SR. Twenty-two rounds of talks have been held between the SRs but clearly, the “clarification and confirmation” of the LAC as well as the contours of a “boundary settlement” have remained elusive.

There was a sense of optimism when the Agreement on the Political Parameters and Guiding Principles for the Settlement of the India-China Boundary Question was concluded in 2005 but it turned out to be short lived. Among the principles identified were “the principle of mutual and equal security”, aligning the boundary “along well-defined and easily identifiable natural geographical features” and safeguarding “due interests of their settled populations in border areas”. These were widely interpreted to mean that Arunachal Pradesh which had a settled population would remain part of India and in the western sector, India would have to make adjustments in keeping with geographical features so that Chinese connectivity through Tibet to Xinjiang was not impaired. However, the SR level talks failed to sustain the 2005 momentum and translate these expectations into forward movement.

By 2005, the number of incidents where patrols of both countries often came face to face had started growing. Accordingly, a Protocol to the 1996 Agreement on CBMs was concluded on Modalities for the Implementation of Confidence Building Measures in the Military Field Along the Line of Actual Control in the India-China Border Areas. Article IV of the Protocol defines the procedure for exercising restraint in such situations – On coming face to face, both sides were to refrain from advancing further, return to their bases, inform their respective Headquarters to enable consultations, not use or threaten to use force, treat each other with courtesy and refrain from provocative actions. However, these provisions have been ignored in recent years as there have been increasing reports of pushing and shoving and stone throwing causing injuries though neither side suffered fatal casualties till the present showdown in Galwan area.

It is clear that 2005 was the high point in terms of registering some forward movement, though incremental, in terms of managing the situation in the border areas. After 2005, summit level meetings have continued to take place regularly and some new agreements were also concluded but these did not further the boundary dispute resolution. The SRs have met regularly but were also unable to register progress on the boundary question. Part of the reason is that in recent years, the agenda of the SR’s talks has expanded and now encompasses the entire gamut of the bilateral relationship as well as exchanging views on regional and global developments, thereby diluting the focus on the core issue.

In 2012, an Agreement on the Establishment of a Working Mechanism for Consultation and Coordination on India-China Border Affairs was concluded. It provided for the Joint Secretary level officers in the respective Foreign Ministry(s) to “study ways and means to conduct and strengthen exchanges and cooperation between military personnel and establishments of the two sides in the border areas”. Art V of this Agreement states that they “will not discuss resolution of the Boundary Question or affect the Special Representatives Mechanism”.

The following year saw another Agreement on Border Defence Cooperation being concluded after a prolonged stand-off in Depsang in Ladakh. Art VI enjoined both sides not “to follow or tail patrols of the other side in areas where there is no common understanding of the line of actual control in the India-China border areas”. It reiterated the need for exercising maximum restraint as agreed in the 2005 Protocol. Significantly, the 2012 and 2013 agreements did not reflect material progress on the LAC or boundary issue; these merely reiterated suggestions that were no longer working on the ground.

How The Ground Reality Changed
The future is always marked by uncertainty and a policy is an attempt to provide a map for the foggy road ahead. Looking continuously into the rear-view mirror for assurance that one is on the right road creates a bias that will lead to a crisis, exactly as has happened with China. Underlying political realities had changed dramatically from 1988 but Indian policy makers and leaders found reassurance in policy continuity.

In 1988, when both countries embarked on the new chapter in their relationship, Indian GDP was $296 billion (in 2010 dollar value) and Chinese GDP was $312 billion. In per capita terms, India was marginally better off. The defence budget of both countries was at par, at $20 billion each. A decade later, in 1998, Indian GDP rose to $421 billion while China moved faster to reach a trillion dollars. Indian defence spending rose to $24 billion while Chinese spending went up to $33 billion. This gap grew larger and in 2008, as Indian GDP reached $1.2 trillion, Chinese economy was nearly four times larger at $4.6 trillion. Indian defence budget was $44 billion while Chinese budget had reached $133 billion. During the last decade, the gap has further widened; Chinese GDP is estimated at five times that of India while its defence budget has climbed to four times that of India.

A similar gap was growing in other areas too. From near zero in 1988, bilateral trade registered a modest beginning, crossing $2 billion by 1998. By 2008, China had emerged as India’s biggest trading partner with a $41 billion turnover and the imbalance was evident in India’s $21 billion trade deficit. This has only grown further to over $50 billion at present, indicating that continued engagement in the current manner was placing India at a disadvantage on account of a non-level playing field.

In other words, the growing gap in capabilities across the board was an unmistakable trend that undermined the political basis of the 1988 policy. The basic assumption in 1988 that India would be better placed after a passage of time to achieve a more acceptable resolution to the boundary dispute was no longer valid. While it is true that India had registered considerable progress between 1988 and 2008 and had improved its standing vis-à-vis many countries but relative to China, India’s position had worsened.

As the account of the discussions on boundary CBMs indicates, it is around the same time that progress in these dialogue mechanisms began to stall. References to the 21 st century as the Asian century that included the rise of both China and India had been an accepted phraseology in bilateral statements but no longer found mention after 2008.

The LAC clarification process had stalled even as both countries stepped up patrolling. The number of “transgressions” reported by India began to grow to over 400 a year. India embarked on improving its connectivity infrastructure in the border areas. Since no progress had been made on clarification of the LAC and each side was engaged in more robust patrolling up to its perception of where the LAC lay, face-offs became more frequent. Transgressions became prolonged stand-offs, requiring diplomatic and political intervention. New agreements merely reiterated restraint but remained unable to address either the underlying reasons or impose restraints on patrolling. In short, it was just a matter of time that a face-off would turn violent and get out of hand and this is what happened on the night of 15 June.

A New Policy Reset
Currently, analysts are speculating more about the proximate causes that have led to the crisis. These span a range of factors – domestic compulsions on the Chinese leadership facing troubles at home, distraction from the criticism on China’s handling of the COVID-19 pandemic, unhappiness with India’s statements following the declaration of Ladakh as a union territory last year, concerns about India’s expanding infrastructure in border areas, signalling aimed at growing Indian ties with the US as US-China ties remain locked into a downward spiral, or just part of China’s growing assertiveness also on display with Taiwan, Hong Kong and in South China Sea in recent months. However, the Indian analysis needs to dig deeper and examine the changed political drivers behind China’s behaviour.

Right now, both sides have taken firm stands but it is not in either side’s interest to escalate matters. Nevertheless, a prolonged stand-off appears likely. This will force India to review its plans on building infrastructure in border areas by ensuring adequate security and surveillance. In this case too, the Darbuk-Shyok-Daulat Beg Oldi road had been in the making for years and occupying heights at vulnerable points to secure the road would have avoided the unpleasant surprise that faced us in 2020.

Since the 2020 incursions are seen as different from the recent incidents as being larger in scale and across multiple locations, it can only be concluded that the Chinese side wanted to unilaterally force India back from its perceived LAC. India has therefore sought a restoration of status quo ante, as in April. It is difficult to predict how and when this is going to be achieved through negotiations. The Chinese attempt in Ladakh seems to be similar to its salami slicing tactics in the South China Sea where the steady land reclamation has enabled it to convert atolls into islands with runways and missile defences, creating a new military reality. But suffice to say, China’s unilateral approach has forced India to rethink on the fundamental basis of the relationship by making it clear that the 1988 assumption is no longer tenable.

Therefore, what is needed is a thorough review of the three-decade old policy. It has become evident that an ambiguous LAC is unlikely to remain peaceful and tranquil. Creative ambiguity worked for a while but its time was running out, a fact that Indian policy makers should have foreseen but were somehow reluctant to accept. China did not face a similar compulsion because it had improved its relative standing and continuing ambiguity was to its advantage. Formalising an understanding of the respective perceptions is only the first step; then will come the harder challenge of resolving the differences. And in the meantime, a new set of CBMs will need to be worked out to guide activities in the grey zone of overlapping LACs, in order to prevent future incidents.

These negotiations are going to be long and contentious. Compared to the 1990s when the early agreements were concluded, today the bilateral relationship has become multi-dimensional providing both sides with additional leverages and also a stake in not allowing the situation to spin out of control. At the same time, areas of concern have also grown. In the past, it was China’s defence, nuclear and missile cooperation with Pakistan that remained a constant irritant for India but was never discussed; it still exists today and CPEC adds to it. However there is a host of other issues – trade imbalances, market access, foreign investment entry regulations, non-tariff restrictions on commercial activities, China’s growing footprint in India’s neighbourhood including in the Indian Ocean, developments in South China Sea, BRI, interpretation of free and open Indo Pacific and role of Quad, and many more, including some that both sides have not taken up in recent years but could be revived like Tibet, Taiwan, Xinjiang.

In sum, since the basis of the old modus vivendi is no longer tenable, both sides need to start by asking how they visualise their relationship in the coming decades.