India Intelligence Report

   Indo-Sino Relations in “new phase”



  • China sees Indo-Sino relations entering “new phase”

  • India reiterates desire to develop friendly relationship with China

  • Intelligence agencies disqualify Chinese companies in port, telecom; lack of transparency in ownership is seen as reason

Indian Minister for Petroleum and Natural Gas Murli Deora met Chinese President Hu Jintao on the sidelines of the Shanghai Cooperation Organization (SCO) meeting and learnt that China views that its relationship with India has entered a “new phase.” Jintao convinced Deora that his country was committed to forging long-term strategic cooperative partnership with India and emphasized that this was an “established policy.”

India and China are celebrating a “Year of Friendship” and are holding a series of meetings to enhance bilateral relationship, friendship, reciprocity, and cooperation. Deora stressed that “Developing friendly relations with China is an important priority of the Government of India.” He also highlighted that bilateral relations had acquired a strategic significance for peace, stability, and development of Asia and the world. India’s Defense Minister Pranab Mukherjee recently visited China and came away star-struck and impressed by China’s growth and convinced of its desire for peace. He was even quoted saying that the visit has bridged the trust deficit. Mukherjee said “We do believe there is enough strategic space for both of us to develop. Neither are we a threat to them nor are they a threat to us.” An important decision that came out that trip was the institutionalized military exchanges that would include joint exercises.

However, it is still not clear if thorny discussions on China’s “string of pearls” or naval bases in the Indian Ocean, the proliferation of missile technology to Pakistan, the naval base in the Andaman Sea, its new port at Straits of Gwadar, or its steep hike in Defense Budget came up in any of these discussions. While Indo-Sino relations may be placed in the right trajectory, it is not clear if there is any movement along that trajectory.

Representing the deep-sense of distrust and uncertainty, Indian security agencies have denied permission to Hong Kong based Hutchinson Port Holdings to participate in multi-billion Rupee container terminal projects in Mumbai and Chennai. They are also parrying the approval for Huwawei Technologies to set up manufacturing facilities and bidding for core backbone routers. The Navy also refused permission to Oil and Natural Gas Corporation (ONGC) to purchase speedboats from a Chinese firm. Those who look at the business side only consider cost and loss of investment as parameters in their decision making and do not look at the lack of transparency on the owners of these companies.

Indo-Sino relations will continue to meander and proceed at a slow pace if the trust deficit is not truly handled. Mukherjee’s claim to have bridged the trust deficit with one trip is diplomatic but disingenuous. While India must develop friendly relations with China, it should also be careful to understand its moves. In fact, trust is not the only deficit with China. There is also a deficit among the politicians in the understanding of Chinese moves in Africa, South America, and Central Asia. The security hurdles raised by the intelligence agencies and defense is considered opinion.

Sadly, there is no real reason why India and China must not have good relations. Historically, before the communist onset in China, the two countries were very close economically, politically, and intellectually. Information, learning, and religion continued to incessantly flow from India to China. Even a thousand years ago, nations in India and China exchanged Embassies on a regular basis.

The communist turn and the 1962 border war after the “Hindi-Chinni Bhai Bhai” slogan cannot be just forgotten. Adding to this, other serious contentious moves by China seriously affecting Indian security environment needs to be considered and understood for bilateral relationship to grow.