Political compulsion led to Chinese goods boycott, another India-China face-off not likely to happen

On June 16 the focus of all Indian media shifted from the pandemic to the India-China face-off that took place at Galwan Valley in Ladakh. The breaking news in India about the tension at the Valley mentioned three Indian soldiers being killed. But, as the day progressed, the number of Indian soldiers martyred at the border rose to 20. Among those killed included a Colonel rank officer.

The Chinese troops also suffered some casualties, but the Chinese government opted not to reveal the numbers. However, Chinese media houses like the Global Times did accept that casualties were suffered on the Chinese side as well.

This stand-off between India and China is not new. In the past both the countries have witnessed two wars, one in 1962 and the other in 1967. But since then, despite sharing 3400 kilometres long Line of Actual Control (LAC) which traverses from Ladakh to Sikkim and Arunachal Pradesh, no such incident took place at the border between the two Asian giants. Until now.

The stand-off at the LAC led to India losing 20 of its soldiers. According to The Hindu newspaper, China had also captured 10 Indian soldiers during the face-off but they were released later.

The face-off at the border shifted global focus on India which has a nationalist government led by Prime Minister Narendra Modi. All were waiting to see how he and his government would react. However, it took over 36 hours for Indian Defence Minister Rajnath Singh to react. That too through social media. And he chose to skip naming China in his tweet. Singh will soon be going to Russia to participate in the 75th Victory Day Parade of WW II in Moscow. The unavailability of the minister gives a clear hint that India is not going to confront China right now.

This stand was further reinforced when PM Narendra Modi, during a meeting with the opposition parties, stated that Chinese soldiers had not violated the LAC in Galwan Valley. Modi, who came to power by projecting himself as a strong man who promised to take up nationalist issues head on, has been silent about the face-off. Modi’s statement, claiming that the Chinese army had not entered India, went viral on Chinese Social Media including Weibo.

Despite the conflicting statements, it is likely that India might take measures on all fronts – military, diplomatic, economic and political, since the present government’s supporters (cadres) are hyper nationalists who have been led to believe that the army is sacred and if anything happens to them then it needs to be avenged if not through military power then in some other way.

Within a year from now, India has two major state assembly elections coming up — Bihar and West Bengal. And the ruling Bharatiya Janata Party (BJP) will be seen using all kinds of tricks and calculations to win these elections. Hence, they will certainly not want to alienate its nationalist voters. Interestingly, the regiment that faced the violations at the border was the Bihar regiment and within 48 hours of the martyrs being brought home a soft election rally speech has already been made by the PM.

However, it’s likely to be a tightrope walk for the government to get things their way. We explore the options.

Do not mix diplomacy with military action 

Most of the Indian army veterans believe that mixing up of acts of diplomacy and military has pushed India into the present situation. On June 15 Indian army personnel patrolling along the LAC were sent unarmed to talk with the Chinese troops. The talk took a violent turn as the armed Chinese personnel started brutally hitting the unarmed Indian army representatives in the most primitive manner.

Indian Army’s Defence and Strategic Analyst Major Mohammed Ali Shah (retired) reacting on the issue says, “On June 23 Foreign Ministers of both India and China will talk. I wonder why it is taking so much time? This should have been done immediately. And also, they will have an online interaction when this should have been a face to face interaction with the officials visiting China.” He further adds, “Soldiers are trained to fight, they are not diplomats. There is a defence attaché system for diplomacy. But it happens at the level of Generals. We army men do every kind of work right from diplomatic talks to participating in rescue operations during the flood, to tackling acts of terrorism. But soldiers on the borders should not be sent to talk and they should also be given orders to use arms when they are attacked. Our policymakers should know that our soldiers are not cannon fodders.”

The army Major also stressed upon the need to boycott Chinese product in India. “Almost 60 per cent of Indians are using Chinese mobile phones, so boycotting will have a big impact,” he feels.

To understand the impact of the call to boycott Chinese products we spoke with some of India’s well-known economists.

Call to boycott Chinese product is political with no impact on the ground realities

Paranjoy Guha Thakurta, senior journalist, economist and political commentator says, “Hypothetically if India completely ends trading with China, meaning zero trade—no import, no export, India will be hurt more than China. Whatever investment China has made in India’s neighbouring countries for the decade and a half — be it Pakistan, Sri Lanka, Myanmar, it has been limited to basic infrastructure development, like making ports and roads. However, in India China has invested around 5.5 Billion US Dollar in Tech companies. Right from Xiaomi to OYO, Vivo, Big Basket, Make My Trip the list of Chinese investment in Indian companies is long. There are at least 40 such Indian companies where the Chinese have invested.”

Guha Thakurta further points out, “Whatever is happening in Ladakh – the military stand-off taking place, it is easy to say let’s boycott China. But then let us remember that this is not 1930 British India where (Mahatma) Gandhi can call and say boycott clothes and people will do it. It’s a globalised India today. There is a tech war going on between China and America. Despite Modi trying to show that he is close to China he is perceived by China to be closer to America. So, if America is having a trade war with China and India also decides to have a trade war with China, it will not help anyone.”

He maintains, “At present 30-40 per cent of LED bulb components in India come from China. Around 60 to 70 per cent APIs (Active Pharmaceutical Ingredients) are from China. API is very much in demand for factories manufacturing life-saving drugs, cancer drugs and anti-viral drugs. So won’t this boycotting China movement force these medicine factories here to shut down? Everybody knows what impact that will have on India’s health sector, which is already having a tough time due to the pandemic.”

“Let political people call for the boycotting of Chinese products. Let Swadeshi Jagran Manch (an affiliate of Rashtriya Swaysewak Sangh, the ideologue of ruling BJP) do what they want to do. We have seen a family in Gujarat throwing a television set from their building, but all this will not make much of a difference to India’s trade relations with China,” adds Guha Thukurta.

Limited Options 

Mohan Guruswamy, well-known Indian economist and advisor to India’s Finance Minister in 1998, maintains that while India does not have much option as far as military action is concerned, the trade ties are likely to continue between the two countries— as Japan has with China. He points out, “India has limited options to tackle such situations. But the Indian Air Force has its base near the area of conflict and its use can be very impactful. India can also use its sea way to fight against the Chinese army.”
According to Guruswamy, to hurt China on the economic front India needs to do it at the Foreign Direct Investment (FDI) level and also by cancelling work contracts given to Chinese companies. “In fact, during the Narendra Modi rule the Chinese investment in the Indian economy has increased. So this call to boycott Chinese products should start from the government level.”

He also points out, “India can also trade with Taiwan and even Thailand, to hurt China economically. Time will tell whether or not India has been able to hit back China economically.”

Guruswamy further adds, “However, I think while having diplomatic talks India should continue its trade with China. Japan and China have been doing the same since long.”

Trilateral Talks—Not just between India, China and Russia, but also India, China and Pakistan 

Executive Editor of Force Magazine (a news magazine on national security) and co-author of Dragon On Our Doorstep, Ghazala Wahab first ruled out the possibility of any more face-off between India and China in the near future. She says, “India knows that it cannot fight against China unilaterally, as it will bring further damage to India along with loss of face.”

Wahab further says that India does not have many options on the military front and it will involve trilateral talks with Russia and China to resolve the issue. “In fact, after the incident that took place on the intervening night of June 15-16, India dialled Russia. But Russia downplayed it and stressed upon the need to maintain peace in Eurasia and Asia Pacific region. Russia maintained that it will be beneficial for all the three countries.”

According to Wahab a trilateral meeting between India, China and Russia has been scheduled on June 23. This was confirmed by Army veteran Shah as well.

The national security analyst went on to highlight the issue which led to the escalation of conflict between India-China – the abrogation of Article 370 in Jammu and Kashmir. She says, “After the abrogation, apart from Pakistan, China was the first country to register opposition. China had told India that it cannot change the status quo of Ladakh. China had also not only objected to the revoking of Article 370 but had also put forward its demand of holding a trilateral talk between India, China and Pakistan, which India had ignored. However, now India has to accept it.”

She quickly adds, “But it will not be easy for the Indian government, as Article 370 has its political repercussions as well. Implementing it would mean a loss of face for the Indian government. China also wants India not to change the order of Asia. So there is no doubt about India having a trilateral talk not only with Russia but also with Pakistan on the Kashmir issue, with China acting as the mediator.”

However, according to Wahab the talks between India, China and Pakistan may not be at Foreign Minister level, it may remain a low-key affair.