Paper: GS-II, Subject: International Relations, Topic: India and its neighbourhood, Issue: India- China ties.
Context:
There are signs of improved business ties after PM Modi–Xi Jinping meeting at BRICS Summit (2024). Upcoming SCO Summit in Beijing has potential stage for further engagement.
Current Restrictions:
- Press Note 3 (2020): Investments from countries sharing land borders with India need government approval.
- Sensitive Sectors (still restricted): defence equipment, nuclear energy, telecom are restricted from investments.
Recent dilution of restrictions:
- India is considering easing restrictions on Chinese direct investments in non-sensitive sectors.
- Visa issuance for Chinese citizens is becoming more liberal.
China’s Conciliatory Signals
- Beijing hinting at willingness to open its market.
- May reduce trade imbalances if India engages cautiously.
Rationale
- Need for China’s Market & Goods:
- India needs access to Chinese raw materials and intermediate goods.
- US trade hostility increases dependence on Chinese inputs.
- Technology & Know-how:
- Potential benefits from China’s leadership in clean-tech industries and AI advancements.
- Shared Growth Potential:
- Asia’s economic promise relies on India–China cooperation.
Challenges in Engagement
Way Forward:
- Engage China cautiously while diversifying supply chains.
- Gradually reduce over-dependence to avoid strategic vulnerabilities.
- Maintain strategic autonomy while working with QUAD and other Western partnerships.
- Use rapprochement as a tactical tool to reduce tensions and secure economic benefits.
Conclusion: While mistrust and security concerns persist, a calibrated rapprochement with China offers India economic and strategic advantages. The challenge lies in balancing engagement with caution, leveraging cooperation for growth while safeguarding national security and strategic autonomy.
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