India Does Not Have the Option to Impose Serious Economic Costs on China: Shyam Saran

"...the question to ask is whether the fortunes of these Chinese companies is important enough to the Chinese state, to the Chinese government, to moderate their position with regard to the territorial issue."

Former foreign secretary Shyam Saran spoke to The Wire extensively about the “very worrying” situation at the India-China border. Read the full transcript of the interview below.

Hello and welcome to a special interview for The Wire. Seventeen weeks have passed since China first intruded into Indian territory at several points in Ladakh and, as yet, there is no resolution to the problem. So could India end up having to accept a fait accompli? That’s one of the key issues I shall discuss today with former foreign secretary and one of our most acknowledged experts on China, Shyam Saran.

Mr Saran, as I said seventeen weeks have passed since China first intruded on Indian territory at 17 points in Ladakh and as yet there’s no clear resolution in sight. How worrying is this?

It is very worrying because, quite clearly, from what I see that the Chinese themselves are saying, they seem to suggest that the disengagement is complete as if there is nothing more to be done, which, obviously, from our side is not the case. Now, going forward, I think the fact that we are continuing with the military-to-military level talks, we have also continued talks at the diplomatic level, you may have seen some reports that our ambassador in Beijing has met some officials from the central military affairs commission, from the party’s international liaison department – so obviously there is a considerable amount of activity still taking place to try and see if there is some kind of a resolution possible through the diplomatic channels.

I want very much to explore all of that with you but first let me ask you: Why do you think the Chinese did this? Is it simply to realign the LAC or do you think there is a bigger motive to send a message to the world that they are the big power in Asia and also simultaneously, to cut India down to size. 

I think a bit of both. The fact is that the Chinese for quite some time have been expressing worry about the development of border infrastructure on our side; they have been explicitly, in fact, saying that the building up border infrastructure is somehow changing the status quo on the border. They even suggested at one time that we should have an agreement to freeze border infrastructure development on both sides. Of course, that would have put us in permanent inferiority because the infrastructure, as you know, on their side has been advancing very very rapidly.

So, there is a context to this that maybe the Chinese feel that there are tactical changes taking place along the border, which reduce, erode some of the very patent superiority which they have enjoyed for several years. So, that tactical aspect is certainly important, as we have seen with respect to Galwan itself, but yes, it is taking place in a larger context.

Why now? Because they can – given the fact the rest of the world is so preoccupied with the COVID-19 pandemic. Why now? Because China believes that in terms of its own military, economic capabilities it is now in a very symmetrically strong position. And yes, in terms of how it sees itself as the preeminent power in Asia, to put India in its place, to suggest to India that you should know you are not in the same league as us. Yes, that is certainly part of the perception as well.

Let’s focus for a bit on Ladakh. I accept that there’s been some disengagement in Galwan but the truth is newspaper reports suggest that the buffer zones created are on Indian territory. Newspaper reports suggest that the LAC has shifted one kilometre westwards again onto Indian territory. But as far as hot springs in Gogra are concerned or Pangong lake and Depsang, there has been no disengagement there at all. Does that give you the impression that China has decided that the encroachment that it’s made is actually its territory, it doesn’t intend to retreat, it’s going to retain what it’s got?

I think there is no way that we can avoid that conclusion because as I mentioned to you right in the beginning, the Chinese have suggested that the process of disengagement is complete – as if nothing more needs to be done. There does not seem to be any intention, for example, to vacate some of the additional area which they have occupied in the Pangong lake area, particularly the ridges; it’s not only at the banks of the lake but the ridges which, sort of, go up from the banks up into the mountains. Several of those ridges have been occupied. So I am afraid that certainly, the Chinese intention seems to be that, ‘Let’s let India accept the fait accompli and then also go back to status quo ante as far as the overall relationship is concerned,’ obviously that is not acceptable to the Indian side.

In fact, Ajay Shukla, in his articles in the Business Standard, has attempted to estimate the extent of Indian territory that China has encroached upon and unless it retreats, that territory would have been lost to India. According to him, it’s moved 10-15 km at Depsang, 2-4 km at the hot springs in Gogra, 8 km at Pangong lake, and his conclusion is – this would be the largest loss of territory to China since the 1962 war. Now, I know that you follow Ajay Shukla’s articles closely, do you believe that this is as serious as he makes it out?

You know, these are reports. I do not know where these reports have come from. I can only say that there is certainly a degree of clarity with respect to the Pangong Tso area. Because there the LAC was at a place called Sirijap some years ago. It is when we removed some of our troops from this area during the Kargil war, that when the troops came back they found that the Chinese had occupied from the Sirijap area up to the point which is known as point 8 – a considerable distance.

Since then, from four to eight, both sides have been patrolling, I think the difference is that patrolling by Indian troops is no longer being permitted because they have blocked the access points. A similar sort of thing seems to be happening in the Depsang area where also some of the patrolling routes have been blocked by the Chinese. Now, how much territory has actually been lost, I’m in no position to say but I don’t think there is any doubt that there have been significant transgressions from the Chinese side and so far it is only a limited disengagement that seems to have taken place and that too in the Galwan area. We do not know what is the status of the disengagement in other areas,  and from the Chinese statements that are coming out it would appear that they believe that the disengagement process is already concluded.

In fact, newspaper reports suggest that at Pangong lake, what the Chinese are saying – that they’re prepared to go back from finger six to finger four, but they want us to go back yet further to finger two which means once again, not only will the buffer be on what we claim is our territory but we’ll have had to retreat yet further back.

Yes, but it’s not only that because they are saying that some of the ridges that are on our side we should also disengage from those ridges. Which, I think should not be acceptable to the Indian side because, as I said, we have already seen considerable encroachment from the Chinese side. Any further fallback from the Indian troops will put us in a difficult situation.

So not only are the Chinese refusing to vacate what they’ve encroached upon but, in fact, if newspaper reports about Pangong lake are true, they’re demanding that India do more retreating.

Yes, that seems to be the case. As I said, we are at a disadvantage because the government does not seem to believe in keeping the people of this country informed as to what really are we up against. That is still somewhat murky.

In fact, newspaper reports seem to go one step further. They are also suggesting that the Chinese have begun building roads, they’ve begun building bridges, and helipads. And now, there are estimated to be as many as thirty-five thousand Chinese troops on their side of the LAC with fairly heavy military equipment; again, that corroborates the view that they dont intend to retreat from what they’ve encroached upon. They are there to stay and they are now giving themselves the capacity to do so.

True, but just to set the record straight, I think there has been a considerable build-up of troops on our side as well. So essentially you have in the rear areas, or where the encounter spots are, there is a considerable deployment of troops on either side. My sense is, if this, for example, continues during the winter – which would be very difficult because this area is very inhospitable during winter – it would require a considerable investment in setting up heated dwelling units, making certain you have enough equipment for use during very very severe winters. If that is going to happen then I imagine that there will be a fairly prolonged impasse between them.

And, in fact, if it continues into winter and those terrible, inhospitable conditions where the temperatures can fall to minus twenty it’s a bigger problem for India because we have to airlift mist of our infrastructure. China has the roads to give it easy access. 

Yes, there is certainly an asymmetry there although, I must also point out that over the last decade or so there has been a considerable amount of improvement in the logistics on our side.

So the asymmetry is diminishing but it is still advantage China.

To give you an example, we have revived most of the advanced landing grounds in this area so fixed-wing aircraft can carry most of the supplies to most of the forward positions today in a manner that they could not about ten years ago. So there is a difference.

Let me at this point put to you two opinions that suggest that perhaps the Indian response, certainly at the initial stages, erred. The first is that many believe the Prime Minister should have ordered a quick focus counter that would have given India a bargaining space and also a quid-pro-quo that would facilitate China’s withdrawal. I am told that this is precisely how the problems in 1967, 1986, and 2013 were handled. Did we err in not giving ourselves that quick counter?

It’s difficult for me to say what kind of tactical moves were made either before or afterwards but, you know, I myself have pointed out, in some of my writings, that there are several points along the border where tactically we are in a superior position. Where, if there is a transgression from the Chinese side, you could quickly, in fact, move and occupy, some additional territory on the Chinese side. And, as you said, this would give you some bargaining advantage when you have to then start negotiating a mutual withdrawal. This has not happened this time. Now, why this has not happened this time – I am not in a position to say but certainly, that is putting us at a disadvantage.

So it is an error on our part not to have attempted it? I presume it hasn’t even been attempted. It’s not a case of attempted and failed.

Well, it has not been attempted but, you know, it’s difficult to say – not being familiar with the position of the two armies, what impact did the pandemic have on the readiness of the armed forces on the Indian side. There are several factors there, but I would certainly acknowledge that had we got some of those bargaining counters also on our side, perhaps we would be in a stronger negotiating position.

The second opinion or view, is that the prime ,inister’s statement made in June, “Neither has anyone intruded across our border or is anyone intruding,” undermined India’s position and, in a sense, let the pressure off the Chinese. Would you agree?

Yes, that is certainly true. Again this is something that I have pointed out, that whoever advised the Prime Minister to make a statement like that really put him in a very difficult position. We have to be, especially at the level of the Prime Minister, we have to be very very careful what kind of statements we are making. This was not a, should I say, perhaps, a well thought out statement.

At the moment, the intrusions that have happened are all in Ladakh but India has a 3,488-km border with China. Are you worried that what we’ve seen in Ladakh could also begin to happen in Arunachal Pradesh or in the central area?

Any part of the border which is very long, as you say, could be under pressure. We should be prudent in anticipating that there could be some pressures on other parts of the border. Any prudent strategist would take that into account, and not only that, you also have the issue today of having two live borders. That is, you have a live border with China, you also have a live border with Pakistan. So we are in a very difficult position.

And this difficulty is underlined by the fact that we have no guarantee that what’s happened in Ladakh won’t happen in Arunachal or in the central sector and also, we have no assurance that Pakistan will, how shall I put it, behave itself and not start needling us at the same time as China is. 

Quite clearly that is a kind of scenario that we should be prepared, even if it does not happen – and I hope it does not – but it is a scenario that you have to anticipate.

Isn’t there one other danger that were we to acquiesce and accept what seems to look increasingly like a fait accompli as far as the Chinese are concerned, isn’t there a danger that this could then happen again and again? This may not be a one-off, this could be part of a recurring pattern. China testing us, seeing it can get away with it, it might do it again and again.

Yes, that is certainly a possibility but I would say that while we have not been able to react quickly enough to these transgressions from the Chinese side, I have full confidence that the Indian armed forces – as the current deployments seem to indicate – is fully capable of preventing any further incursions. But, you know, when you are talking about removing the transgressions which have already taken place, then obviously you have to be prepared to accept the possibility of escalation.

I’ll come to that in a moment’s time but first let me ask you about reports that military-level talks could be starting in a few days’ time. We don’t know whether they’ll happen at the core commander level or the divisional commander level but clearly, these talks have gone through five or six rounds and they haven’t actually yielded satisfactory results. Do you think another round or two more can yield results or, do we now have to push this up to the political level – perhaps the foreign minister-level?

No, I think we should be patient because don’t forget that we have had these kind of impasses in the past – some of which have lasted a long period of time.

Sumdorong Chu, for instance, lasted for seven years.

Yes, yes. So I don’t think there is any reason for us to say, “This far and no further.” As long as the other side is willing to engage with you in a dialogue – at different levels – why not continue to try and see whether you can achieve some kind of an understanding through that process? So I would not say that these kind of parlays are of not much use. Yes, it would appear that having achieved some progress – one doesn’t know precisely what the contours of that are in Galwan – it is possible that, through further negotiations, we may be able to get some incremental progress. So why preclude that possibility?

It’s interesting that you began that answer by saying that there is a need to be patient. In the past Sumdorong Chu to take that example, it took seven years to sort out that problem. On the other hand, on Monday, just three days ago, the Chief of Defence Staff, General Rawat, made the statement that the military option is on the table. Now, China is a five times bigger economy to India; several newspaper reports suggest that for not just the last two years but several years, their army has been three times better funded, at least, than ours. How do you view the military option?

Well I don’t what is the basis on which the CDS has made that statement. As I said, it is true that the Indian armed forces currently are well-matched with what the Chinese have on the other side, but, taking military action to try and remove some of the transgression means major military operations.

Possibly conflict and war?

Yes, it could. I mean, you always have to be prepared for escalation. So I’m not quite sure what is it that the CDS is suggesting. Maybe, this is signalling to the other side that, you know, don’t preclude that possibility of escalation and hence, perhaps it is better to arrive at some kind of a negotiated settlement. Maybe it is part and parcel of the diplomatic signalling that is taking place but, as I said, it would be very risky for us to think in terms of a major military operation at this point.

Let me ask you a blunt question – and I don’t mean it to be an anti-national question, I think it’s a question that every honest Indian will want to know the answer to. Do we have the capacity to militarily push the Chinese out of what we believe is our territory?

Well, as I mentioned to you, there are various points at the border where, tactically, we are in an advantageous position. So if you’re looking at some tactical moves on our side, that is certainly possible but tactical moves can also lead to, you know, more major kind of military operations. So you have to always be prepared for that. Now, obviously the armed forces are in the best position to assess how far they can go, what is the asymmetry of capabilities on either side. At various points on the border, I would say we are fairly well-placed but there are other points of the border where we are not and overall, there is an overall asymmetry of military power comparing India to China. No doubt about that.

When you say overall asymmetry you mean China overall has the advantage.

Yes, of course.

What about specifically at Pangong lake and Depsang? Two of the worst intrusions where China seems to have simply dug in its feet. Can we just push them back? Or would that risk conflict?

Well, any point from which you are trying to push them back will require military operations, no? I mean, you would have to be prepared to engage in, I suppose, you know, use of arms.

And soldiers dying.

Soldiers dying.

And we don’t know how many.

Yes, so, I mean, it depends upon how much of a risk you are willing to take. This is not just a military decision, this is also a – at the end of the day – it is also a political decision.

Let’s try and assess the risk, not at the military level, but at the political and diplomatic level. If it were to come to conflict, how do you think Pakistan would behave?

Well, I would imagine that Pakistan would certainly look at this as also an opportunity to up the ante on its side. You see, the difference today is if you take, for example, Kargil as kind of a landmark, you know, for some time while the Chinese have been supporting Pakistan, they have also acted as a factor of restraint on Pakistan because they believe that a sharpening contradiction or confrontation between India and Pakistan also does not suit their interest. So they have had some restraining influence on Pakistan but, I gather that over the last several months, that element of restraint is perhaps giving way to active encouragement to Pakistan in its confrontations with India.

So China’s attitude has changed.

I have a feeling that that attitude has been changing. For example, you take the Chinese activism in taking the Kashmir issue to the United Nations, or, for example, on trying to safeguard Pakistan at the FATF, or on the issue of terrorism itself. We should be mindful of the fact that what we may have been taking as a sort of a stable factor – that it is not in China’s interest to really encourage greater confrontation between India and Pakistan but to keep that confrontation at a certain kind of a threshold. Maybe that threshold has been raised.

So what you’re suggesting is that if we were to take military action to push the Chinese back – even though we believe they’re on our territory and they have no right to be there and that that were to lead to conflict – it could very easily and quickly become a two-front conflict with Pakistan coming in in gratitude to China.

Even if it does not happen, could anybody making these calculations on the Indian side preclude that possibility? You cannot.

That’s a constant fear.

It’s a constant fear.

And that’s also a restraining influence on us?

Well, it is certainly a factor that has to be taken very much into account that you have to protect this flank while you are planning something major on the other flank. Certainly. You do that the opposite way too, isn’t it?

 True. Now up till now, we’ve believed we have America’s verbal support and certainly, Mike Pompeo has made that clear on several occasions but if it were to come to conflict, would we have America’s military support or, with an American election just over two months away, is that uncertain; perhaps even unlikely?

Look, I think it has been clear for quite some time that while that support may be available to you – while even support in terms of, you know, providing you with advanced equipment, weaponry, or even intelligence – that kind of support may be extended to you, I don’t know to what extent, but to think that American’s will come and fight your battles with China or Pakistan – I think that’s a very unrealistic assumption to make. So yes please be ready to accept the political support, diplomatic support and even, as I said, military support in terms of equipment, hardware, intelligence but I do not think we should expect anything beyond that.

Finally, at the end of the day, if a military option is to be exercised or not would depend upon a decision the Prime Minister makes himself. I don’t think any other member of the government is going to make it, it will be the Prime Minister. He did so, fairly readily and with alacrity after Pulwama but the target was Pakistan. This time around the target would be China. How heavily would that weigh on his mind?

These are two very different kinds of adversaries, you know. Here we are talking about the second strongest power in the world – which is China – on the other side you have a state which is militarily powerful but it is also not quite a match for India in terms of its capabilities. So obviously in dealing with these two adversaries, it cannot be the same; the Prime Minister cannot treat Pakistan and China in the same manner.

Does the shadow of 1962 hang over us still? And does it hang over rightly, or have we got a complex as a result?

No. I think, you know, 1962 cannot be wished away and I think that it is to our credit that we have, over a period of time, tried to build up our capabilities vis-a-vis China but I think what we have to also accept is that, at the end of the day, it is the economic capabilities that you have accumulated; the economic strength that you have accumulated which supports your defence capabilities. And from that angle if you’re looking at it, we are at a disadvantage. Not for want of, you know – it is not that we don’t wish to, sort of, forestall Chinese pressures on us but that our resources are limited and we have two adversaries to deal with. So we have to take all this into account and, at the end of the day, there is a degree of prudence that you need to have in dealing with these kind of adversaries.

Don’t bite off more than you can chew.

You should never do that.

So we may have the will, we just don’t have the capacity.

At the moment we do not have the capacity but all the more reason why you should put your head down to building up those capabilities because, at the end of the day, the only manner in which you can actually deal with this challenge is by building up your own economic and security capabilities. It is only temporarily that you can try and bring about a degree of balance through what we call external balancing. By building up your relationships with those countries that also share your concerns about a unilateral assertion of power by China.

But in the end, you have to build yourself economically if you want to be militarily strong.

Absolutely. There’s no doubt about that.

Let’s discuss what additional steps India can take, short of the military option, to persuade China they must vacate Indian territory. Let’s start with economic measures. We’ve already barred Chinese apps like TikTok, what more can we do?

There is no doubt that for several Chinese companies, important companies, India is the fastest-growing market. So if you’re talking about TikTok, India was its largest market. If you’re looking for the prospects for a company like Huawei, if India signs on to 5G, it means a huge success for Huawei; if India does not, it will mean that there will be some setback to its future. So there are areas where there is keen interest on the part of various Chinese companies to retain access to and to grow in the Indian market.

Now, the question to ask is whether the fortunes of these Chinese companies is important enough to the Chinese state, to the Chinese government, to moderate their position with regard to the territorial issue. My sense is that I do not think that that is the case because overall if China is looking at, for example, the trade relationship with India – as you know, it has always enjoyed a very large deficit vis-a-vis India, but also because the overall level of between India and China may be a big proportion of our trade volume but it is a very small proportion of the Chinese trade volume.

Two percent, I believe.

So, if you are sitting as a decision-maker in Beijing, would you be overly worried about some loss of this two percent? Not so much, I would imagine.

And this would apply even if India were to decide and announce, “Huawei will not be part of 5G trials,” even that would not deter the Chinese?

I do not think so because the Chinese side would have anticipated that, as a consequence of what they are doing, there will be these kind of reactions. So I would think that they have factored this.

Which means, if I understand correctly, we don’t really have credible economic options.

I do not think that these are very serious options or that they are going to make a very significant difference, but yes, you could say that going forward to the extent that, you know, there is a certain saturation of the market that has taken place elsewhere, India is still an expanding market. There is no other market of the size of India which is available to any, you know, large player.

There is, of course, one other factor which is that if we were to sharply diminish our trade – which is, reduce Chinese exports to India – there are a lot of commodities that either will not be available to the Indian people or available at great cost, so each Indian citizen will then be paying a price which he has to accept.

Yes, even if you try to move away from the kind of very heavy dependence you have on China today, for example, in your pharmaceutical industry with the active APIs or, for example, with respect to semiconductors or magnets, you know there are several intermediates where we are very, very heavily dependent upon China and even if you take a decision today to reduce that dependence by diversifying your sources of supply or trying to develop indigenous sources of manufacture in India itself – even if there is a higher cost – it will take time. So in the meantime, there will be considerable disruption to your own industries.

The other aspect that we have to remember is that precisely because of these global supply chains, even if you are ostensibly purchasing, say, a German machine or some German equipment, there may be various components in that which come from China. So, you know, this kind of decoupling that many people may be thinking about may not entirely feasible but, having said that, certainly, I think, it is possible for India to reduce the level of dependence that you have on China today. That is eminently true.

Let’s now come to diplomatic options. We’ve had a measure of verbal support from Australia, Japan, from several ASEAN countries, can we take steps to ensure that that becomes stronger and firmer?

Oh yes we should. Certainly. I mean, I think the whole purpose of the Indo-Pacific strategy, the crystallisation of the Quad, you know, with security arrangements among India, the US, Japan, and Australia, that could become the core of a larger, sort of, a security arrangement with other concerned countries. As I said, this is external balancing which is inevitable, in a sense, until you develop your own capabilities. This will certainly act as a restraint on China.

China is also, I think, concerned what is the likely trajectory of its confrontation with the United States. My own sense is that China has declared victory too early, you know, it is not really as, sort of, dominant a position as it thinks it is; whether it is in terms of military capabilities, or in terms of its technological abilities, or even in terms of its economy. I think there is still a long way to go before it reaches a point similar to what the United States was during its period of being a, you know, hyperpower.

So it has declared victory, in a sense, too early. And, as you are aware, there has been considerable pushback against China even from some of the smaller countries in, say, for example, South-East Asia. That pushback also is something that is encouraging; that, you know, China may have overextended itself. To that extent, there is perhaps a likelihood of there being a certain sort of a ‘stepping back’ by China in view of these headwinds and that might work to our advantage.

Are you suggesting, cause there was a hint of that in the first half of this answer, that we should consider expanding the quad to include other countries? And also, are you suggesting that the time has come to get Australian participation in the Malabar exercises? 

Well, we have in a sense moved in that direction by having a set of exercises with Japan and the United States, and a set of exercises with Australia. So the next logical step would also be to invite the Australians into the Malabar exercises. I think what is perhaps a difference in terms of how we are approaching is, we have developed very strong bilateral security relationships with each of these countries. What we have stopped short of it multilateralising these arrangements.

And that needs to be done?

That is the next step. And, I think, depending upon how this current confrontation with China plays out, that should be something that we consider seriously.

Now there are many countries in the world who verbally have sympathised with India, they’ve even expressed concern about what China is doing, but all of them trading relations with China, which is, after all, the world’s second-biggest economy. To what extent will they be prepared to upset and annoy China, even risk some of their trading relationships, just to support India?

Well, some of that is already happening, you know, it is happening with the United States of America, where certainly, as far as some of the hi-tech areas is concerned, effectively de-coupling is taking place. It may not go down the line to, say, consumer boards or autos or things of that nature.

It’s happening for America’s own interest, not to help India.

It is happening for America’s interest and it will continue and, to that extent, it creates a more favourable situation for India. Even with Australia, which perhaps is the most dependent, on the Chinese market, for example, for wines, for minerals, iron ore it is the biggest market for Australia. Even there you will see that despite some of the, kind of, punitive actions taken by China against Australian exports, this has not really changed the Australian posture towards China – which has become quite negative.

The only country which, perhaps, is still not quite decided which way to go is Japan; but Japan also has very strong economic interests in China. So the situation that we are seeing is somewhat mixed at the moment, but to answer your question, some of that decoupling is taking place. There will be, certainly, a weighing of interests, in terms of how much support to extend to India at the risk of incurring the displeasure of China but on balance, I would say, the current trend is really one of pushback against China.

But, once again, I get the impression – just like you said we don’t have serious economic options that will cause great pain to China – we don’t have great diplomatic options that will also box China into a corner. There are things we can do but nothing that will make it –

Yes, but, you know, in diplomacy it is never an either-or kind of situation. It is a question of how much additional, kind of, room for maneuver you can get for yourself. What I’m trying to suggest is that currently, you have a situation, an environment, where pushing back a little more is possible.

But it is only a little more?

Yes, because that’s the nature of –

We’re not going to get China to cry uncle by the way we’re pushing.

No but I don’t think that realistically that would be something that you should try for. If you can put a certain degree of restraint on China, if you can get China to rethink some of the very aggressive policies that it has been adopting, that would be an advantage.

What about in terms of our own policies? Is there need now to rethink our relationship with Taiwan? Is there need now to rethink our attitude to the Dalai Lama and to the Tibetan government in exile in Dharamshala? Are those areas where a measure in rethinking by India could be effective and useful at this point of time?

Well up to a certain point, yes. I think it was always possible for India to develop its non-official relationship with Taiwan, the Taiwanese were certainly quite keen to do that. We had, for various reasons, not quite followed up on that. If we are following up on that, well and good but I think, you know, changing India’s posture towards Taiwan in terms of, for example, extending diplomatic recognition to Taiwan – that would be a step too far because that would certainly mean very strong reaction from China. A

nd on the Tibet issue, I think, you know, if you make a dramatic change in the effect, that is, if you move away from your stated position of several years that you have recognised that Tibet is a part of China, that the Dalai Lama as, you know, a religious figure who is entitled to great respect and reverence within India itself.

If we move away from that, you should also anticipate what could be the sort of reaction from the Chinese side; don’t forget that we have had a history of China encouraging, for example, insurgencies in the Northeast which they gave around 1980.

And they can resume if they want.

If you up the ante on your side, should you be surprised if they will up the ante on their side? So you should make a careful assessment of how much you can push the envelope in order to make the Chinese, you know, rethink, as I said, some of the positions that they have been adopting. But, as you said, to think you can make the Chinese cry uncle perhaps is somewhat unrealistic.

I get the feeling that whilst we have options – economic, diplomatic, even in terms of our own policies – there are none that are going to produce immediate results.

They are limited. They are limited because this is, you know, the very nature of the power relationship between the two sides.

They are more powerful?

Yes, that is the reality. Therefore, what it suggests to you is, that the sooner you get down to reducing that gap – the power gap between the two countries, which you are eminently capable of by the way.

But it will take years.

It depends on how rapidly you are able to develop. Don’t forget –

But you can’t do it by December.

No, but it need not be that you completely shrink the gap. I’ll give you the example of the period between 2003 and 2007. There was still an asymmetry of power between India and China but what was the difference? The difference was that you were growing at an accelerated pace of about eight to nine percent while the Chinese economy was slowing down; you were seen, for example, as the next China – as the next big commercial opportunity – and that expanded so much your diplomatic space even vis-a-vis China.

And it also changed China’s attitude to India.

Right. 2005, if you remember the visit of Wen Jiaobao to India.

But even this process would take a year or two to play out.

Certainly, but what I’m saying is that it is not as long-term as you might think. It really depends upon what kind of difficult decisions with regard to, for example, your economic reforms, your governance weaknesses – how much are you able to address those during a short period of time. Which, again if you ask me, is eminently doable.

Sadly, there is no sign that those are being addressed.

Yes, I would acknowledge that I do not see much evidence of that.

We’re coming to the end of this interview, let me put this to you. If we are not successful in the next five, six, seven months in getting China to vacate what is Indian territory, how damaging an impact will this have on India’s standing in our neighbourhood? How damaging would it be in terms of our relationship with Bangladesh, Sri Lanka?

Our neighbours have always been very sensitive to the power equations between India and other great powers and China. So I’m not surprised that as a result of the recent developments in India-China relations, some of our smaller neighbours – including Pakistan – feel that more space has been opened up for them to adopt a, shall I say, more independent policy. We see that with respect to Nepal, we see that with respect to Bangladesh or Sri Lanka. This is something that you have to take into account as you order your relationship with your neighbours. This will be a factor that will complicate your neighbourhood policy.

One last question. Ten, fifteen years ago the world believed that India and China would be the powers of the future. There were some who said that the twenty-first century will be the Asian century because India and China will be the dominant countries.

Yeah, China itself said that.

The problem is that in the last fifteen years China has roared ahead economically, we are slowing down precipitously, and now China seems to be embarrassing us in Ladakh. Are we getting demoted, or have we been demoted, to number two?

Well, depends upon in whose eyes. Certainly, if you take the Chinese perception, you see the difference between what, say, Deng Xiaoping told Rajiv Gandhi in 1988 during the visit, that there cannot be an Asian century without the emergence of both India and China; that the Asian century means the parallel rise of India and China. Today, the Asian century as far as China is concerned is a Chinese century, it is not an India and China century. That is the difference.

Now, is this a shared perception all across the world? I do not think so, I think there is still a considerable amount of, shall I say, expectation that India has all the ingredients in place to emerge as a very credible countervailing power to China. But that potential, is it going to be realised? Depends entirely on the decision that you take, the choices that you make.

If this impasse, which at the moment is not favouring us, with China continues five, six, seven months, is there a danger that the world will increasingly begin to believe India-

No, I don’t think five to six months is enough to change perceptions all around. As I mentioned to you, there is a certain history to these kind of impasses with China.

Which the world understands?

Well, the world has seen, after all, that there have been extended confrontations between India and China at various points which we have managed to overcome.

So the world won’t rush to conclude that India’s losing out?

No, I don’t think the world will rush to that kind of conclusion. Finally, I would say thank to what China is doing, the rest of the world seems to have a stake in India’s success, so let us leverage that as well.

On that note, with a last sentence, perhaps as a bit of optimism, thank you very much for this comprehensive interview.

Thank you.

Take care, stay safe.