What should happen next? Further de-escalation talks continue between military leaders of both sides, it has been reported. China’s foreign ministry has issued a statement blaming India for violation of the border, without mentioning anything about casualties. Does China want to escalate border tensions with India? It would be a strange time for China to do that

It is most distressing that Indian soldiers have been killed in a military skirmish with the Chinese in eastern Ladakh. It is also strange that the incident happened in the midst of de-escalation talks between Indian and Chinese commanders, about which defence minister Rajnath Singh had made public statements. What went wrong? We hope the public would be taken into confidence on the subject.

What should happen next? Further de-escalation talks continue between military leaders of both sides, it has been reported. China’s foreign ministry has issued a statement blaming India for violation of the border, without mentioning anything about casualties. That is escalation of the incident to the political level. India must respond at the political level, making it clear that India stands firm on defending its territory and valuing the lives of its soldiers. India seeks peace and a negotiated settlement of the border dispute but that does not mean meek acceptance of bullying tactics by the Chinese.

India must demand that the Chinese hand over the elements that carried out these attacks on Indian personnel or be prepared for consequences, for which the responsibility would lie with China.

Does China want to escalate border tensions with India? It would be a strange time for China to do that. It is on the back foot on the Covid-19 pandemic. Its ongoing row with the US has deepened and roped in Australia. Its pandemic diplomacy is being viewed with deep suspicion around the world. Its decision to further shrink the relative scope for autonomy that Hong Kong has under the One-Country-Two-Systems framework has invited widespread condemnation. China’s aggression in the South China Sea is raising hackles in its southeast Asian neighbours. Taiwan is asserting its separate, democratic identity with ever greater confidence. Would Xi Jinping pick this time to pursue an armed conflict with India?

Timing apart, is it in China’s interest to have hostile relations with India?

India is part of the US-led Quadrilateral partnership for the Indo-Pacific, in which Japan and Australia are the other two members. India has warm relations with Russia, is one of its major arms buyers, and carries out annual military exercises with Russian forces. Russia is in no position to coerce China into any policy position but has diplomatic clout that India can marshal in its aid.

The very cultivation of India as a counterweight to China by the US and its allies and by members of the Association of Southeast Asian Nations, even if not by ASEAN itself in any formal sense, is a sore point with China. It wants to deny India any global role and would like to keep it mired in South Asian politics and thus indulges Pakistan and its hostility towards India,, cultivates anti-India opinion in Nepal and Myanmar and seeks strategic presence in Sri Lanka and Pakistan itself. It presents itself as an ally to Iran in its efforts to buck US sanctions, hoping to countervail Iran’s longstanding good relations with India and the duo’s joint interest in keeping Afghanistan out of proxy Pak control.

However, India is a major market, one that will keep growing even as local demographics and geopolitics curtail opportunities for Chinese companies elsewhere. Chinese car makers have India plans as aggressive as Chinese phone makers. Further, India is potentially a crucial ally in resisting the US bid to entrench America’s technological dominance in chipmaking, electronics and computing. If India shuts its doors on Huawei, as the Chinese champion prepares its global rollout of 5G, it would be a major blow to the company, not only in terms of loss of India’s lucrative market but also in terms of its demonstrative value for a range of developing countries.

Where does China fit in India’s scheme of things? Of course, India has to defend its territorial interests and pursue its rightful role as an increasing factor in global power politics. In these, China plays an adversarial role. I not wish to count India’s large bilateral trade deficit with China as a major factor in this context. What matters to a country is the overall balance on the trade or, rather, the current, account not bilateral balances. India might have a large trade deficit with China, but China’s vigorous imports from a host of Indian export markets, particularly in Africa, puts purchasing power in the hands of consumers there, driving up demand for goods and services, including those made in India. India’s overall balance on the current account is comfortable.

In a range of other concerns, India and China share common interests, as emerging economies hemmed in by western hegemony. Two areas exemplify this commonality. One is the use of the American currency to settle most international transactions, most which do not involve an American counterparty, and the undue control this offers the issuer of this currency, the government of the US. US threats of secondary sanctions, of which the threat to cut off access to New York’s dollar networks is the most potent, gives the US undue clout. India has, for example, been forced to agree to import natural gas from terminals in Louisiana, close to 20,000 km away, rather than from Chabahar, Iran, some 1,200 km away, where India would like to build an LNG terminal, because India dare not defy US sanctions against Iran.

Europe, grown effete under American tutelage and NATO's umbrella, does not have the stomach to develop an alternative payment mechanism. A non-dollar system of settling international payments is likely to be created by Chinese and other Asian economies, including India.

Another area of commonality is climate change. While China is classified as the largest emitter of greenhouse gases, India coming in as number three, behind the US, both countries account for far smaller proportions of the total amount of gases released into the atmosphere and the oceans, whose cumulative effect is global warming, than the industrial countries of the world. Both are relatively small emitters when the emissions are considered per head of the population. These factors need to be given due importance while allocating global responsibility for climate action. India and China have together worked to this end, and will continue to do so.

India certainly does not want to see a world dominated by China. Nor does it care for a world dominated by the US and other western powers. India’s goal is to have the strategic autonomy to pursue its development goals without being constrained by sanctions, technology and market denials or arbitrary trade curbs. This calls for a world where rules matter and distribution of power among a bunch of global players underpins such a rules-based world order.

Today, the World Trading Organisation has been eviscerated by US highhandedness, both in preferring unilateral actions against select countries over multilateral enforcement of commonly accepted rules, and in undermining the WTO’s dispute settlement mechanism by refusing to appoint members to its appellate tribunal. India and China would both be better off in a rules-based world order than in one where might is right, the kind world that President Trump supports.

Russia and Europe are centres of geopolitical power, along with China and India, who could countervail arbitrary American dominance. New Delhi must cultivate them all as allies in this cause.

It is in this framework that India must tackle its border tensions with China, maintaining a fine balance between defending its rights and honour in bilateral engagements and securing its larger interests in the world, in which it is necessary to make common cause with China.