India and China agreed on new patrolling arrangements along their disputed Himalayan border in October. © AP
Natasha Agarwal and Paresh Batra
Last month offered a rare glimpse of progress in the strained relationship between India and China. The two nations agreed on new patrolling arrangements along their disputed Himalayan border, and their leaders — Xi Jinping and Narendra Modi — held talks at the 16th BRICS summit in Kazan, Russia.
Yet, this modest diplomatic thaw has yet to ease tensions in their economic relations. With national security concerns increasingly intersecting with economic interests, India remains cautious about welcoming Chinese capital and labor. This stance, however, has been marked by mixed messages.
For example, although the India Economic Survey 2023-2024 advocated for more Chinese investment, Commerce Minister Piyush Goyal quickly clarified that India’s position on Chinese investments remains unchanged. Similarly, External Affairs Minister Subrahmanyam Jaishankar, while noting there’s no formal policy against Chinese FDI, emphasized the “common sense” need for careful scrutiny. Indian leaders continue to perceive China as a “special China problem” in a broader global context.
For businesses, this dichotomy hinders the development of cross-border commercial relationships. Further dampening the confidence and willingness of Chinese entrepreneurs to invest in India are New Delhi’s restrictive visa policies, investment regulations, and a business environment that appears unfavorable toward China.
As The Global Times, a Chinese state media outlet, states: “Without enhancing mutual trust, India will struggle to boost Chinese investments.” Mutual trust is the foundation of any stable, long-term relationship. Therefore, rebuilding this trust requires both nations to adopt a neutral approach, focusing on shifting perceptions toward each other across all levels of society.
Chinese President Xi Jinping and Indian Prime Minister Narendra Modi meet on the sidelines of the BRICS summit in Kazan, Russia, on Oct. 23. © ReutersTo this end, India could focus on fostering more people-to-people exchanges between the two countries. The Indian government could reciprocate China’s outreach to Indian passport holders by reinstating visa issuance across all categories for Chinese passport holders, including reestablishing its e-visa policy for China. Functionalizing a visa portal to facilitate short-term business visas for Chinese passport holders required under the government’s Production Linked Scheme (PLI) is in itself inadequate to facilitate the humongous people-to-people exchange that is required for perceptual changes between the two “population giants.”
Moreover, New Delhi and Beijing should expedite the resumption of direct flights between the two countries. This would not only facilitate bilateral economic exchange but also support multilateral economic ties. For instance, non-Chinese foreign businesses with supply chains in China may find India a more attractive investment destination if doing business with China from India were made easier.
India and China could adopt a multi-pronged, interdisciplinary approach to promote people-to-people exchanges across various levels. For instance, both nations might benefit from mutual learning about each other’s governance structures.
To support this exchange, a program involving government officials, academia, businesses, and other stakeholders should be considered. This could include both theoretical and practical components. The theoretical aspect might involve courses led by experts on each country’s governance models, while the practical aspect could consist of field trips and interactions with civic officials. Such exchanges would not only foster public-private knowledge partnerships but also offer insights on adapting and integrating newly acquired knowledge into each country’s domestic context.
India has signed Cultural Exchange Programs with 78 countries, including one with China that could be a valuable step toward rebuilding mutual trust. Such a program might enable cross-campus collaborations in language, music, dance, culinary arts, and more, fostering deeper empathy and understanding between the people of both nations.
Exchanges such as these could be piloted through existing India-China sister-city partnerships, revitalizing and breathing new life into these connections.
It is imperative to be cognizant of the fact that rebuilding mutual trust is going to be an iterative process. Perception management alone toward normalization of bilateral ties will take both nations only that far. Taking a leaf out of the learnings from Da Wei, a Chinese scholar at Tsinghua University: “Diplomacy starts with education.” Educating each other about one another’s cultures and histories could be a meaningful first step in rebuilding mutual trust.
Ultimately, mutual learning fosters mutual understanding, paving the way for mutual trust and shared benefits for all.
source : asia.nikkei