Interview: Shivshankar Menon On His New Book ‘India And Asian Geopolitics’

Yash Johri (YJ): Almost one year on from the events in the Galwan valley, what assessment do you make of China’s strategic calculation? In the book, you write on Pg. 339 that in the late 1980s there was a balance of economic, political and military power between the two countries that contributed to the normalisation of relations. However, at present, the scales vary immensely today, in China’s favour. How has this change in the balance of power contributed to our present circumstances?

Shivshankar Menon (SM): On the border itself, it is my sense that we are still to find a new equilibrium. Clearly, the Chinese changed that last year, when despite the agreements they had signed committing them to respect the status quo, they tried to change the status quo on the Line of Actual Control (LAC). They tried to prevent us from patrolling in areas we had. patrolled before.

So clearly, those agreements are no longer working, China no longer seems to respect them and we, therefore, have to get them back to the old status quo at a minimum. And I think that’s a discussion that’s going on between the governments in terms of disengagement and de-escalation by the troops. Today, my summary is that the entire line is live, and that is why we have this build-up: the Chinese built up on their side to change the situation and we have built up in response and we have to see where this goes.

“We are still early in the crisis and will have to see where it goes and how it concludes.”

So we have a live border, we will have to respond to the situation there, we are still to restore deterrence along the line because obviously deterrence broke down last year otherwise China’s actions wouldn’t have happened. Additionally, the balance of power considerations must have entered into their calculus. I am very careful about actually prognosticating where this will go. I think we are still in the middle of the crisis and have a long road ahead of us, not only when it comes to negotiating but also when it comes to our buildup, our posture, the doctrines that we apply to maintain peace on the border so that the border doesn’t distract us from more important things.

You mentioned COVID-19. That frankly didn’t prompt such Chinese behaviour, because this is not something China could have done overnight when COVID-19 struck. What COVID-19 would have done is make the distraction attractive, but the action would have been prepared over a longer time period. And it is not something that was prepared after the pandemic struck if you look at the dates. The pandemic may have just accelerated the action, but stresses in India-China relations date back to at least 2012 and we had multiple signs of stress. COVID is a contributory factor but was not causatory (sic).

YJ: In the aftermath of the border fracas, we saw a lot of moves banning apps, press notes restricting FDI from bordering nations as well as the IPL dropping Vivo as the lead sponsor. However, one year on most of these initial measures has been relaxed. What do you believe is the wisdom behind such moves and secondly to what extent can economic activity be suspended when our core interests are at stake?

SM: It is quite clear, and the External Affairs Minister and the government say it quite often, that we cannot go back to business as usual as though nothing happened on the border. And if there isn’t peace on the border we cannot have normal relations with China.

But the fact is that we’re linked to China in many ways. Before COVID-19 hit there were 24,000 Indian students studying in China. Last year, despite what happened on the border, China became our largest trading partner overtaking the United States. And frankly, the trade and economic relationship benefit both sides.

The Indian consumer also benefits from cheap Chinese goods. We aren’t importing these goods out of compulsion, we’re importing them as a matter of choice. It contributes to running our industry. If one looks at auto parts, this is a global supply chain, it’s not as if you can just snip one end of it.

Therefore, I don’t think decoupling from China is a realistic option but I do think that we have over time developed dangerous dependencies on the Chinese economy. And, we see some of that in the pharmaceutical sector (over 60% of raw materials come from China), telecom sector as well power sector. These are relatively sensitive sectors and our dependence on China is very high.

So, I would expect a Government of India strategy that tries to diminish that dependence over the coming years but not necessarily to decouple from China. And frankly, my attitude is that we should do what is in India’s interest, but we shouldn’t put ourselves in a position where we can be manipulated by using our dependencies against us.

Therefore, I reiterate that we haven’t reached a new equilibrium in the relationship, because that equilibrium will have to include more than just the border.

It will have to include the other things that divide us as well as what unites us such as trade, climate change etc. To my mind, India-China relations will be reset and there’s no going back to what it was before, there will have to be something new.

YJ: In the book, interviews and other writings you’ve mentioned that India made a mistake not joining the Regional Comprehensive Economic Partnership (RCEP)? Additionally, a recent ruling of the Permanent Court of Arbitration in favour of Cairn on the ground of India violating clauses of its Bilateral Investment Treaty (BIT) with the UK was also given. India has phased out many such BITs.

Are these examples of short term policymaking, where a loss isn’t acceptable for longer-term/gain and credibility. Has the approach with regard to such multilateral and bilateral economic arrangements been justified and if not what can we improve?

SM: My argument against this is two-fold. One is that India needs the world. India has done best when it has been open to the world. Look at us since 1991 when we opened up the economy, those are the high growth years when we managed to pull out the most people from poverty. So being engaged with the world is a necessary condition if we want to transform India.

Secondly, I’m not arguing about the details of the negotiations but for me when you say that I will not join RCEP after 8 years of negotiations what are you saying? In effect, you are saying that I am not competitive today and that I also don’t expect to be competitive in 20 years, which is the adjustment period that RCEP gives you. For me, this shows confusion in your external economic strategy. For me, that is the worrying thing.

We’ve raised tariffs for the last four years running and there is this increasing tendency to say that we’re special and unique and that we’ll go home and forget the world. With this approach, you then run the risk of missing the development bus and this for me is a very worrying thought.

We are the only major economy that is not part of any regional trading agreement, even the United States is part of USMCA (what was NAFTA). As the world gets more fragmented with the slowing of the world economy these blocs will start becoming more cemented. What will India do then, given that at present half our GDP is the external sector?

YJ: There have been recent reports regarding China’s plans to exploit the waters of the Brahmaputra/Yarlung Zangbo. Be it with the large 38GW dam at the Great Bend, Medog County or with their South-North water diversion project. Tibet additionally is also their largest freshwater source but also home to water systems of the subcontinent and southeast Asia.

China’s development actions are undoubtedly going to transgress an entire body of sustainable development law laid down on the principle of ‘significant harm’ as well as principles of the Stockholm convention 1972 and Rio Declaration 1992? How should India and Bangladesh, both lower riparian states deal with such a situation?

SM: It’s a serious problem, if they go through with building these dams, then India and Bangladesh will be very seriously affected. If you look at China’s behaviour as an upper riparian — you can look at the Mekong — I’m not sure that these are problems that can be solved on their own, meaning qua agreements only pertaining to water.

Given this, if a problem cannot be solved within itself to the satisfaction of everybody in a negotiating framework, the only answer when it comes to peaceful solutions is to broaden the basket, is to develop other leverages and to then add more incentives to bring all sides to the table.

So I can foresee that at some stage this is going to become very important in the broader relationship. Today you say that without a peaceful border you can’t have a normal relationship but water could soon reach that status as well unless China, India and Bangladesh sit down and come to some kind of agreement.

Importantly, you have to also remember that there is no instance that I can recall where a country has successfully used water as a weapon. There are huge technical difficulties in what the Chinese propose to do, they can well try to do it but there are arguments within China against this as well. But we have to protect our interest, this is a serious issue and one that we cannot duck.