By Ambassador Kazi Anwarul Masud
The writer is a former Secretary and ambassador of Bangladesh
DHAKA. 1 October 2023 (IDN) — South Asia is the southern subregion of Asia, defined in geographical and ethnic-cultural terms. As commonly conceptualized, South Asia consists of Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.
Most recent figures in US$ for the per capita income of South Asian countries with the year of enumeration are as follows: By the latest count, the countries possessing nuclear weapons are as follows: Russia—6,257 (1,458 active, 3039 available,), United States—5,550 (1,389 active, 2,361 available,) China—350 available (actively expanding nuclear arsenal), France—290 available, United Kingdom—225 available, Pakistan—165 available, India—156 available, Israel—90 available, and North Korea—40-50 available (estimated).
In an article (24 September 2023) Kruthika Pathi of AP writes, “The United States, Britain and India’s Cold War-era ally Russia have voiced support for India’s permanent membership over the years. But U.N. bureaucracy has stopped the council from expanding. And even if that changes, China—India’s neighbor and regional rival—would likely block a request. Kept out of the UN’s most important body, Modi has made sure that his country is smack at the center of a tangled web of global politics. On one hand, New Delhi is part of the Quad and the G20, seen as mostly Western groups. On the other, it wants to expand its influence in the BRICS and the Shanghai Cooperation Organization, where Russia and China dominate.
The deft juggling of the West and the rest has come to define India’s multipolar foreign policy. Its diplomatic sway has only grown over its reluctance to condemn Russia for its war in Ukraine, a stance that resonated among many developing countries that have also been neutral. And the West, which sees an ascendant India as crucial to countering China, has stepped up ties with Narendra Modi. By doing so, it looks past concerns of democratic backsliding under his government.
Before Narendra Modi India had a glorious past. When the British left in 1947 with independence, India was blessed with several leaders of world stature, most notably Mahatma Gandhi and Pandit Jawaharlal Nehru, who were able to galvanize the masses at home and bring prestige to India abroad. The country has played an increasing role in global affairs.
Contemporary India’s increasing physical prosperity and cultural dynamism—despite continued domestic challenges and economic inequality—are seen in its well-developed infrastructure and a highly diversified industrial base, in its pool of scientific and engineering personnel (one of the largest in the world), in the pace of its agricultural expansion, and in its rich and vibrant cultural exports of music, literature, and cinema.
Though the country’s population remains largely rural, India has three of the most populous and cosmopolitan cities in the world Mumbai, Kolkata, and Delhi. Three other Indian cities—Bangalore, Madras, and Hyderabad—are among the world’s fastest-growing high-technology centers, and most of the world’s major information formation technology and software companies now have offices in India.
According to last (updated on 27 September 2023) figures, India has emerged as the fastest-growing major economy in the world and is expected to be one of the top three economic powers in the world over the next 10-15 years, backed by its robust democracy and strong partnerships. India’s appeal as a destination for investments has grown stronger and more sustainable as a result of the current period of global unpredictability and volatility, and the record amounts of money raised by India-focused funds in 2022 are evidence of investor faith in the “Invest in India” narrative.
India’s nominal gross domestic product (GDP) at current prices is estimated to be at US$ 3.31 trillion (Rs. 272.41 trillion) in FY22. Additionally, the Nominal GDP at current prices in Q3 of 2022-23 was US$ 874.84 billion (Rs. 71.82 trillion), as against US$ 792.3 billion (Rs. 65.05 trillion) in 2021-22, estimating a growth of 10.4%. With 115 unicorns valued at more than US$ 350 billion, as of February 2023, India presently has the third-largest unicorn base in the world. The government is also focusing on renewable sources by achieving 40% of its energy from non-fossil sources by 2030.
However, India’s growth rate has been stilled by the arrest of India’s growth imposed by China. China and India are the two emerging economies in the world. As of 2021, China and India are the 2nd and 5th largest economies in the world, respectively, on a nominal basis. On a PPP basis, China is at 1st, and India is at 3rd place. Both countries share 21% and 26% of the total global wealth in nominal and PPP terms, respectively. Among Asian countries, China and India together contribute more than half of Asia’s GDP. In 1987, both countries’ GDP (Nominal) was almost equal; even in PPP terms, China was slightly ahead of India in 1990. Now, in 2021, GDP is 5.46 times higher than India’s. On a PPP basis, the GDP of China is 2.61x that of India. China crossed the $1 trillion mark in 1998, while India crossed nine years later in 2007 on an exchange rate basis.
Both countries have been neck-to-neck in GDP terms till 1990. As per both methods, India was richer than China in 1990. In 2021, China is almost 5.4 times richer than India on the nominal and 2.58 times richer in the PPP method. The per capita rank of China and India is 63rd and 147th, respectively, in nominal. The per capita rank of China and India is 76th and 130th, resp, in pp. China attained a maximum GDP growth rate of 19.30% in 1970 and a minimum of -27.27% in 1961. India reached an all-time high of 9.63% in 1988 and a record low of -5.24% in 1979. From 1961 to 2019, China grew by more than 10% in 22 years while India failed. The GDP growth rate was negative in five and four years for China and India, respectively.
Concern about conflict in the Taiwan Strait
Michael Kugleman who writes for Foreign Policy magazine in one of his recent writings, explained that Still, South Asian states are likely more concerned about conflict in the Taiwan Strait because it would disrupt trade with China, not because it would interrupt efforts at friendship between Taiwan and the region. However, India has expanded economic cooperation with Taiwan more than any of its neighbors, in great part because of its sharp rivalry with China. Trade with India accounts for nearly 80 percent of Taiwan’s trade with South Asia. In recent decades, New Delhi and Taipei have inked a bilateral investment agreement and pursued science and technology cooperation Despite India’s vows to curtail commercial cooperation with China, it remains a top trade partner. New Delhi has also never opposed Beijing’s “One China” principle—its view that it has sovereignty over the mainland, Hong Kong, Macao, and Taiwan.
Furthermore, its guiding foreign-policy principle—strategic autonomy—forbids it from taking formal positions on other countries’ disputes. If China were to invade Taiwan, India would likely take a muted position—one comparable to its stand on Russia’s war in Ukraine. India already carefully manages its diplomatic relations with a few rivals—the United States and Russia, Iran, and Saudi Arabia, to name a couple—and escalating tensions between China and Taiwan present another case. So far, India has succeeded at this balancing act by staying quiet. Sana Hashmi, an expert on India-Taiwan relations based in Taipei, told me this week that if New Delhi made any public statement, it would mostly likely cover the “bare minimum,” and probably not mention China or Taiwan by name. If it did, this would “mean a policy change,” she said. Y
et the broader geopolitics matter for India. China-Taiwan tensions are playing out in the Indo-Pacific region, where India strongly supports U.S. policy that revolves around countering China. Even major Chinese military provocations falling short of an invasion would be a major blow to the policy, which aims to keep the region peaceful. Current tensions are “destabilizing the Indo-Pacific, and that does impact India’s security interests and its objectives in the Indo-Pacific,” according to an analyst.
Unwilling to get involved in US-China competition
Seeking to avoid getting pulled into U.S.-China competition, other South Asian states have distanced themselves from the Indo-Pacific policy—even though many of them have received investments as part of Beijing’s Belt and Road Initiative. Bangladesh declined a U.S. invitation to become a partner in the policy, while Nepal long resisted agreeing to an infrastructure grant that U.S. officials had described as part of the policy. The destabilizing effects of tensions in the Taiwan Strait could still present a problem for South Asia more broadly—by threatening some of its partners. The reason for the refusal by South Asian countries of the US proposal is mainly due to their need for the construction of infrastructure for which these countries did not have the funds that the Chinese were willing to provide under their Road and Belt Initiative despite former Vice President Mike Pence’s warning of “Chinese Debt Trap”. It is well known that China and India are the two most populous countries in the world. China was the most populous country with approximately 1.42 billion people in 2018. India was the second largest country by population with approximately 1.35 billion inhabitants in 2018. China and India together account for 36.28% of the total world population of 7,632,819,325. Various macroeconomic growth indicators of the two countries have been compiled to understand what led to the rapid growth of China vs. India. India’s GDP growth rate in the last 17 years has averaged 6.61% CAGR while China’s GDP growth rate has averaged 9.28% Compound Annual Growth Rate(CAGR). China’s capital investment as a percentage of GDP which is a proxy for Investment as a percentage of GDP has averaged 43% while India’s investment as a percentage of GDP has averaged 34.2% in the last 17 years. Subdued investment as a percentage of GDP has led to lower India’s GDP growth rate while China has maintained its investment rate. Indian economy growth rate will rise when capital investment rises for which India will need bigger government and private spending.
It is projected that by 2024, India will have more people than China with approximately 1.44 billion people. Currently, China’s population growth rate is 0.39%, while India is growing at 1.11%. In 1950, the population of China was 554 million. While the population of India was 376 million. China crossed the one billion mark in 1981 and India in 1998. By 2029, India will cross the 1.5 billion mark. The population density of India is 455 people per square km compared to 148 of China. So, India is 2.96 times denser than China. China is 4th and India is the 7th largest country in terms of area. China’s GDP per capita in constant 2010 dollars grew from $1,767 in 2000 to $7,308 in 2017 translating to a 8.71% Compound Annual Growth Rate CAGR while India grew its per capita GDP from $826 in 2000 to $1987 in 2017 at 5.31% CAGR. Slower per capita growth in India is partially because of a lower female labor force participation rate of ~23% while China has reported closer to ~60% female labor participation rate. China’s GDP growth was export-led while India is still trying to generate a trade surplus. China’s export as a percentage of GDP in 2006 peaked at 36% then it has gradually fallen and in 2018, China’s export as a percentage of GDP was 19.7%. China has increased its share of high technology exports as a percentage of total manufacturing exports averaging 21% while India delivered 6.4% in the last 25 years. High technology exports make China competitive and it becomes a supplier that is difficult to replace vs. other nations whose exports are commodity in nature. Apart from economic differences China and India have hundreds of kilometers of demarcated border where border clashes have occurred.
According to Wikipedia the border between China and India is disputed at multiple locations. There is “no publicly available map depicting the Indian version of the LAC,” and the Survey of India maps are the only evidence of the official border for India. The Chinese version of the LAC mostly consists of claims in the Ladakh region, but China also claims Arunachal Pradesh in northeast India. China and India previously fought over the border in 1962 and 1967 with China gaining victory in the former and India gaining victory in the latter. Since the 1980s, there have been over 50 rounds of talks between the two countries related to these border issues. During Xi Jinping‘s visit to New Delhi in September 2014, Indian Prime Minister Narendra Modi discussed the boundary question and urged his counterpart for a solution. Since Modi became Prime Minister in 2014 until the 2020 standoff, Modi and Xi met 18 times, including those on the sidelines of summits and five visits to China. According to an analyst “… improving combat readiness is now a strategic mission for the Chinese military …. China has since increased its military presence in the Tibetan Plateau. China has also been increasing its footprint with India’s neighbors – Nepal, Sri Lanka, and Pakistan to, prevent India from having a monopoly in the region, China is now posing a direct challenge to New Delhi’s influence in South Asia. The disputed territory of the former princely state of Jammu and Kashmir is administered by Pakistan, India, and China. Multiple reasons have been cited as the trigger for these skirmishes., Critics have blamed successive Indian governments (including the current Narendra Modi government) of neglecting the border areas for decades and turning a “blind eye” to Chinese land grabbing in the region.
According to them, India had failed in the protection of its borders, and even in 2020, all along the LAC, India had lost land. In mid-June 2020, a BJP member of Parliament from Arunachal Pradesh acknowledged the presence of regular Chinese patrols inside north-east India as well. MIT professor, Taylor Fravel, said that the skirmishes were a response from China to the development of Indian infrastructure in Ladakh. He added that it was a show of strength for China amidst the COVID-19 pandemic, which had damaged the Chinese economy and its international reputation. According to Yun Sun, a China specialist at the Stimson Center, China perceived India’s road-building as a threat to its “territorial integrity” which it will not sacrifice for the sake of good relations with India. Wang Shida of China Institutes of Contemporary International Relations linked the current border tensions to India’s decision to abrogate Article 370 and change the status of Jammu and Kashmir in 2019. Some postulated that a parliamentary speech by Amit Shah, the Minister of Home Affairs, also could have irked China. In the speech, Shah had declared that Aksai Chin, a disputed region administered by China, was part of the Indian-administered Ladakh Union Territory. An Indian diplomat also agreed that New Delhi’s moves related to Jammu and Kashmir irked Beijing. Other analysts linked the skirmishes to India’s growing alliance with the United States. Tanvi Madan, author of Fateful Triangle (a book about the international relations between the US, India, and China) stated that India thought that this was a “signal from Beijing” to “limit” its relations with the US.
A former diplomat of India stated that “smaller powers like India and Australia, who have aligned with the US, are witnessing a more aggressive China”. India’s former ambassador to China said that these skirmishes were part of a growing Chinese assertiveness in both the Indo-China border and the South China sea. Raja Mohan, Director of the Institute of South Asian Studies at the National University of Singapore, writes that the growing power imbalance between China and India is the main cause of the dispute, with everything else such as the location of the dispute or international ties of India, being mere detail. In short since Indo-China-Pakistan conflicts are not going away driving India despite its non-alignment policy in the ultimate analysis India would have to align herself with the US for her survival and to hold on to her preeminence in South Asia and deny China its design to grab South Asia as its base like the one in Sri Lanka. [IDN-InDepthNews]
