India will be the biggest loser if it seeks economic retaliation against China over terrorism snub

Neeta Lal says New Delhi must carefully weigh the calls to review liberalised policies towards Chinese companies following a perceived diplomatic slight

PUBLISHED : Tuesday, 12 April, 2016, 1:24pm
UPDATED : Wednesday, 13 April, 2016, 10:40am

When Indian National Security Adviser Ajit Doval meets his counterpart Yang Jiechi ( 楊潔箎 ) for a strategic dialogue in Beijing this week, topping his agenda will be a discussion on China blocking India’s bid to have Pakistan-based Jaish-e-Mohammad’s chief Masood Azhar proscribed as a terrorist by the UN Security Council.

India blames the group for carrying out a series of deadly attacks against Indian targets, including one on the Indian Parliament in December 2001 that brought the two neighbours to the brink of war. However, China has maintained that as Azhar’s case did not meet the “requirements” of the council, it has to be put on “technical” hold. This is in stark contrast to the stance of the US, the UK and France, which back India.

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This snub from Beijing has stirred up a hornet’s nest of negativity in India, which expects its neighbour to have a more unequivocal stance on terrorism. Some also see in it a veiled attempt by Beijing to warn India not to band together with the US on regional security. Indian policymakers feel this insensitivity should be reciprocated by a review of Delhi’s liberalised policies towards Chinese companies.

In the past two years, India has fast-tracked a number of security clearances and China has been the biggest beneficiary. It has also been struck off India’s list of “countries of concern”, with the aim of bolstering foreign investment. Further, Chinese companies have received an effusive welcome from the Narendra Modi government for setting up big-ticket industrial projects in sectors including power, telecoms and railways.

Despite these dynamics, the widespread belief in India is that China will continue to support its “all-weather friend” Pakistan on terrorism matters.

The issue requires a well-thought-out response from New Delhi, not one driven by impulse. Balancing the competing imperatives of negative public opinion with wider strategic and economic objectives is the need of the hour. India needs massive infusions of foreign investment to fuel its growth. India-China bilateral trade – currently worth US$71 billion – isn’t worth jeopardising over political issues.

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By risking commercial ties, India will only end up undercutting its own development. Retaliatory measures are never the answer to delicate geopolitical problems. India’s best riposte would be to strengthen its own security networks to prevent future attacks while continuing with its dual policy of engagement with China. For its part, China can be more empathetic towards the security needs of a neighbour with whom it shares the world’s longest border.

Neeta Lal is a New Delhi-based senior journalist