The clash between India and China on June 15 left twenty Indians and an unknown number of Chinese soldiers dead. This led to a wave of public outrage in India. Retired Indian generals came on television to demand that India take the fight to China (with claims that the military is supremely confident it could do the job) and the Indian public started talking about boycotting Chinese goods. Neither option is a particularly good one for India. War would be prohibitively expensive for India and unlikely to achieve the country’s strategic objectives. Instead, there are diplomatic, economic, and military choices that India can make to both achieve greater security and put pressure on China. 

Why War Doesn’t Work

Although the drumbeat for war is being beaten in India, while the Chinese are downplaying the incident, an armed conflict will do little to resolve India’s security dilemma along the Himalayan border with China. The coronavirus and the economic downturn caused by currency demonetization, when coupled with an expensive war, however, limited the latter might be, could lead to a serious downturn in an economy that is already bleeding. The problem gets compounded by the fact that unlike the aging populations of Europe, India is a young nation with a median age of twenty-seven.  Employment, therefore, becomes important for the prevention of large-scale unrest and a war that further weakens the economy would not help. 

Secondly, the Indians are right that they are well-fortified along the border and therefore it would be difficult to dislodge them from their positions. The Indians, therefore, are confident that there will not be another 1962-type war where the Chinese overran Indian positions and went fairly deep into Indian territory. China, however, is not going to fight a 1962-like war and will, instead, depend on increased mobility and better fire-power to inflict casualties on India. The fear then is that the Indians would achieve marginal gains at severe economic costs or get a bloodied nose and have little to show for it. No one in India seriously believes that the Indian military could get back the land it lost to China in the 1962 war. 

Further, the Chinese have a $14 trillion economy compared to India’s $2.9 trillion economy and could, therefore, sustain a conflict over a longer period of time. The Indian estimates on a war are based on a rosy picture where it goes on for a couple of weeks and then there is diplomatic intervention by the international community. But things may not go according to Indian calculations and there are doubts about how long India could sustain a war effort. In 2017, the Indian Comptroller and Auditor General issued a report that said that India had enough ammunition for a ten-day war and while the armed forces have certainly built up their reserves for this crisis, it is not clear how long those reserves would last in an extended conflict. To sum up, why fight an economically draining conflict to achieve what are at best-limited objectives?

Thirdly, the international community is not going to give substantial support to India and, instead, likely to adopt a neutral position in the conflict particularly since the Chinese now have created economic interdependencies around the world that are making other countries less willing to challenge China’s perceptions and actions in world affairs. Greece, for example, sold its port of Piraeus to China and in return blocked a European Union (EU) statement criticizing China’s human rights record. The rest of the EU is considering whether to allow China to build the 5G communications network on the continent and is, therefore, unlikely to offer more than lukewarm diplomatic support to New Delhi.

Similarly, despite nearly three decades of an Indian “look east” policy, the ASEAN countries are now linked in a dense economic web with China and this year ASEAN surpassed the EU as China’s major trading partner.  As a consequence, the ASEAN countries are unlikely to side with India and risk killing the Chinese economic goose that lays the golden eggs. 

Fourthly, Indian diplomats, academics, and journalists are fixating on the Quad while not understanding its limitations. In New Delhi, this author has found a puzzling enthusiasm among the policy classes for the Australia option even though the truth is far less flattering to Canberra because Australia cannot break its economic interdependence with China. Canberra’s major exports are commodities, education, tourism, agriculture, and services and four of these revenue earners depend on a continued and thriving economic relationship with the Chinese. Australia sells large amounts of copper and iron ore to China and it was this sale of minerals that sparked a boom in the Australian economy that has continued until this year. China imports $63 billion Australian dollars of iron ore, $16 billion of natural gas, and $14.6 billion of coal from Australia. Large numbers of Chinese students study at Australian universities and contribute $12 billion to the Australian education system while Chinese tourists are vital to the Australian tourist industry. Australian data reveals that the country gets 8.5 million visitors annually and 1.4 million of those are Chinese. Further, Australia makes $43.9 billion Australian dollars from tourism and $12 billion of that comes from Chinese tourists—over 25 percent of the revenues earned from tourism are from Chinese visitors. Australia now sells about $12 billion of agricultural products to China which is about a quarter of Australia’s total agricultural exports. Not surprisingly, Australians are reluctant to talk about militarily engaging China and, in actual fact, Australia can do little to China unless it is in concert with the United States of America. If India is not attractive enough to make other countries abandon Beijing or weaken their ties with it, then what can New Delhi do to address its new security dilemma?

India’s Options

India’s options lie in two areas which would require the country to make bold and revolutionary changes to its foreign policy and in its approach to the international economy and foreign investments. Economically speaking, the Indians cannot compete with the Chinese in terms of providing alternative supply chains to western manufacturers but they can provide a prize that the west would find hard to resist—and that is the award of contracts for India’s 5G network to western companies. Huawei and other Chinese firms have lobbied hard to get access to the Indian market of 1.3 billion people for, if it was coupled with 1.4 billion Chinese, it would give Beijing a formidable numerical advantage in the global race to establish a 5G network. For India, it would help send a message to China that it does have other economic alternatives and that it can piggyback off the West’s technological prowess to launch its own future economic and technological growth which will depend on the successful adaptation of 5G and artificial intelligence (AI) into different parts of the Indian economy. In fact, 5G coupled with AI would serve as the basis for transforming India into a knowledge economy.

Such an opening of the economy would also be the first step to moving towards a broader freeing up of the shackles that continue to make doing business in India remains cumbersome for most companies (India is now ranked seventy-seventh by the world bank in terms of ease of doing business while New Zealand, Singapore, Denmark, Hong Kong, and South Korea make the top five and China is ranked forty-sixth).  While making the economy more open to global investment is a first step, the real shift may have to come in a reorientation of Indian foreign policy with a hard look at the policy of nonalignment.

A New Foreign Policy?

Since achieving independence in 1947, India has followed a policy of nonalignment which was incorrectly labeled as neutrality by the West. Nonalignment proposed that the country keep its distance from both superpowers but side with one of the other based on the merits of the case that was being debated. Nonalignment was rendered impotent during the Chinese war of 1962 when Nehru asked Kennedy to provide an emergency supply of arms and ammunition to the beleaguered Indian armed forces. Later, in 1971, India signed a Peace and Friendship Treaty with the Soviet Union to alleviate Chinese and American pressure on New Delhi during the Bangladesh crisis. Few, therefore, took India’s nonaligned credentials seriously. 

In the post–Cold War era, nonalignment has continued but faced by the rise of China, and the recent clash in the Galwan Valley, India needs to reconsider the policy and take a side in the international power rivalry—and that side means a closer link to the United States. Such a closer link may take the form of giving the U.S. Navy a strategic base along the Indian coast or in the Andaman and Nicobar Islands since would give the United States a strategic chokepoint to the Strait of Malacca.

A closer alignment with the United States would provide multiple advantages to India particularly when considering the two-front threat that India now openly faces. The Indian military has planned for a two-front war against China and Pakistan but such a conflict would stretch the Indian forces thin and in the aftermath of the war impose a significant economic burden on the economy as the country would have to rebuild and increase its military assets.  Giving the United States a base on Indian territory, however, raises the costs for both Pakistan and China of waging a war—whether limited or full-blown—because it would raise the ire of Washington and that is something that Islamabad certainly does not want while Beijing would have to reconsider its strategy.