India and China: progress in talks, more hurdles ahead

If the momentum of top-level summitry between China and India is any guide, relations between the world's two most populous countries should be in good shape. There is surging trade, a rising tempo of interactions and co-operation in multilateral forums on issues like energy security and climate change. The nine deals signed by Indian Prime Minister Dr Manmohan Singh in Beijing last week built on the eight struck when his counterpart Premier Li Keqiang visited New Delhi just five months ago. But such activity belies the reality that ties are not as strong as would be expected. It is a fact highlighted by the most important of the latest agreements being to prevent border military incursions in disputed territories from escalating into armed conflict.

The thousands of square kilometres of disputed Himalayan border brought the sides to war in 1962 and within a hair's width of full-blown battle in 1967 and 1987. Deals in 1993 began a process of normalising ties, but progress has been slow. An alleged incursion of a platoon of Chinese soldiers into Indian territory at Ladakh a month before Li's trip prompted a three-week stand-off. The 10-article pact signed in Beijing aims to prevent a repeat by putting in place mechanisms to lessen the risk of misunderstandings and improve communications. That the sides have given priority to the matter shows their resolve to push for a lasting resolution.

But the border is only one of numerous sticking points. China's friendly relations with Pakistan, India's sworn enemy, and Indian support of the Tibetan spiritual leader, the Dalai Lama, are thorns. Beijing's perceived Indian Ocean ambitions and Indian intentions in Southeast Asia cause disquiet.

Trade is the brightest spot, surging to US$70 billion and expected to grow to US$100 billion by 2015, yet it is also controversial. China exports to India 2.5 times what it imports from that country and Indians worry that the Chinese products flooding their shops are killing local industries. India exports to China mainly low-margin, unprocessed commodities.

The key to better relations lies, as Xi said after meeting Singh, in both nations properly managing disputes and nurturing ties. Beijing has to do more to build trust among Indians, a significant part of which will involve rebalancing lopsided trade and investment. High-level talks are a crucial element, but the dialogue has to be increased and strengthened at all points of the relationship. Only that way can the momentum be built to deal with the seemingly intractable hurdles.