The India-China economic relationship is one of the most dynamic relationships of this century. The two neighbours house two-fifths of humanity and their combined economic weight is close to one-fifth of the global gross domestic product (GDP) and rising. Cooperation and competition, trust and occasional distrust, admiration and disdain, friendly embrace punctuated by aloofness, are the ongoing yin and yang characteristics of their relationship.

The rise of the two nations is inevitable, although the global, especially Western, perception of their rise is markedly different. The rise of China causes anxiety whereas India’s rise is seen as benign. Whatever the merits of awe, the destinies of the two neighbours are intertwined. Why then is India officially giving a cold shoulder to this month’s mega meet on One Belt, One Road (Obor) in Beijing? Is this rebuff just a part of the cyclical ups and downs of the geographic siblings? Or is it a harbinger of a long-term hardening of stance, which would be wholly unwise?

Obor is the new silk road initiative, both by land and sea, announced by Chinese President Xi Jinping in 2013. It’s the most ambitious infrastructure and connectivity project in history, aiming to connect China with Europe by land and rail, and to Africa and Asia by sea. This Belt and Road Initiative (BRI), as christened by the Chinese, will eventually encompass 100 countries representing 70% of the world’s population, 55% of GDP and 24% of global trade.

You can’t blame the Chinese for not dreaming audaciously. Never mind that many of the details are missing. Never mind that the timeline is ambiguous. But China is known to be patient. Remember when asked what he thought of the French Revolution of 1789, former Chinese premier Zhou Enlai said, “It’s too early to say?" (That quote is apocryphal but an apt summary.)

The BRI has a scope, in which not all is in Chinese hands, since it involves solving security, diplomatic and sovereignty concerns. Even simple things like land acquisition for roads and railways can be tricky. Who will own the assets once they are created is also not clear. The belt and road pass through some of the most volatile regions in Central Asia, and success is not guaranteed. These are but matters of detail, which will get ironed out, one project at a time.

What’s clear, however, is that BRI will entail $5 trillion worth of infrastructure building in the next five years itself. This creates immense economic opportunities, in terms of investment, project contracts and employment.

Remaining engaged with BRI, however fuzzy it looks now, is thus an imperative. After all India has not remained aloof from the Brazil-Russia-India-China-South Africa (Brics) bank or the China-initiated Asian Infrastructure Investment Bank.

China’s rail connectivity project with Europe predates the formal announcement of BRI. For instance, cargo trains have been running regularly from Hamburg to Shenzen for several years. This year, a freight train went from Yiwu to London in 16 days, traversing nine countries. If the already existing Trans-Siberian Railway is made high speed (a Chinese speciality), then London to Beijing can be covered in 48 hours in the not-too-distant future. Can India afford to remain disengaged from this emerging scenario of global trade?

India’s problem is with the China-Pakistan Economic Corridor (Cpec). This $50 billion predominantly Chinese investment will link Central Asia and China to the Indian Ocean through the deep sea port of Gwadar. But it is being constructed in the disputed territory (i.e. legally owned by India) of Pakistan-occupied Kashmir.

India’s boycott of the May meeting is captured by the comments of the foreign secretary. He said that if China is sensitive to issues of sovereignty, how then is it going ahead with Cpec, which violates India’s sovereignty? Meanwhile, the chief minister of Jammu and Kashmir wondered why India is not joining Cpec as a partner to bring economic benefits to the region. This is a sticky issue with differing views even among government officials. It won’t be surprising if the Chinese are willing to negotiate an acceptable “workaround".

The point is that the Cpec issue can be isolated and addressed, without India rebuffing the whole of BRI. As enunciated in the historic 1954 Panchsheel Declaration, and reiterated by President Xi in 2013, the foundation of relations between the two nations includes an amicable approach to addressing each other’s core concerns. Cpec and Arunachal Pradesh are examples of those core concerns.

But let’s not lose sight of the big picture. India-China bilateral trade has grown at among the fastest rates in the world, and investment flows are now picking up fast. The trade imbalance has become too imbalanced and unsustainable in recent years. This was because Chinese exports to India grew by more than 500% in 10 years, whereas the reverse flow grew only by about 25%. As a result, almost half of India’s total trade deficit is with just one country, China.

It is in both countries’ interests to bridge this gap, by (a) increasing India’s exporters’ access to the China’s market; and (b) rapidly increasing capital inflows from China to India. For instance, the Chinese provide the world’s largest number of outbound tourists, but not even 0.1% of their 100 million globetrotters come to India. Surely this can be increased tenfold?

Since both economics and geopolitics are equally important, engagement and not disengagement is the right approach to BRI. Hope cooler heads and wiser counsel will prevail.

Ajit Ranade is chief economist at Aditya Birla Group.

Comments are welcome at views@livemint.com

Close