The reset between India and China appears to be holding. Nearly two weeks after President Xi Jinping and Prime Minister Narendra Modi met on the sidelines of the SCO summit in Tianjin, five years of frigid ties between the two Asian powers are steadily thawing.
However, it will take more than summits and statements to rebuild trust, particularly among Indian policymakers who remain wary of China’s close ties with Pakistan and Beijing’s broader ambitions across South Asia.
Constantino Xavier, a senior fellow at the Centre for Social and Economic Progress in New Delhi and co-author of an in-depth report on Chinese engagement in South Asia, joins Eric to discuss how Modi aims to balance ties with China, the U.S. and Russia while preserving India’s legendary non-alignment strategy.
Show Notes:
- Centre for Social and Economic Progress: How China Engages South Asia: In the Open and Behind the Scenes by Constantino Xavier and Jabin Jacob
- The Diplomat: China-India: Transactional Thaw or Structured Détente? by Rishma Banerjee
- The Hindu: India-China: the need for a border settlement by Manoj Joshi
About Constantino Xavier:
Constantino Xavier is a Senior Fellow in Foreign Policy and Security Studies at the Centre for Social and Economic Progress (CSEP) in New Delhi. At CSEP he leads the Sambandh Initiative on regional connectivity. He is also a non-resident fellow in the Foreign Policy program at the Brookings Institution, in Washington DC. His research expertise is on India’s role as a regional power and the intersecting dimensions of security, connectivity, and democracy across South Asia and the Indian Ocean. He also works on India’s relations with the European Union and other democratic powers in the Indo-Pacific, and has published widely in academic books and journals on India’s foreign and security policies with a focus on state capacity, regional institutions, economic and infrastructure diplomacy and soft power. He is writing a book on India’s democratic realism and involvement in the neighborhood since the 1950s, based on declassified records and interviews with decision-makers in India, Nepal, Sri Lanka and Myanmar.
Transcript:
Hello, and welcome to another edition of the China Global South podcast, a proud member of the Sinica podcast network. I’m Eric Olander, and today we’re going to focus back on the India issue. It’s been a topic on the show of intense curiosity over the past several weeks, given what we saw happen in Tianjin two weeks ago, and at the same time, all of the events that have unfolded since then with Trump and BRICS and SCO, lots going on in the China-India space, and more importantly, in South Asia.
We’re going to look at it a little bit more broadly. We’re going to focus today specifically on where the trends are taking us, and also the perceptions from India, because there’s a lot of different narratives that are bouncing around right now about what’s happening since the SCO summit, and since that video that we saw with Vladimir Putin, Narendra Modi, and Xi Jinping, which got a lot of attention. Obviously, Donald Trump has been weighing in on this quite a bit as well, and so our guide today is going to be Constantino Xavier, who is a senior fellow at the Centre for Social and Economic Progress in New Delhi, and also a non-resident fellow in the foreign policy program at the Brookings Institution in Washington.
A very good afternoon to you, Constantino. Thank you for joining us today.
CONSTANTINO XAVIER: Thank you, Eric. Good to reconnect after many years and congrats on all the good work with your podcast.
ERIC OLANDER: Likewise, it’s wonderful to reconnect, and also just want to give a shout out to Jaben Jacob as well, who we’re going to have on the show later next week, and together you and Professor Jaben did a book, How China Engages South Asia in the Open and Behind the Scenes. We’re going to talk about some of the themes that you raise in that book, and also we’re going to dive into that a little bit more deeper with Professor Jacob later in our show coming up next week as well. Constantino, let’s start with this aftermath of the reset that’s been underway between Narendra Modi and Xi Jinping in China.
Of course, this is not something that’s new. It’s been in the works now for at least 12 to 14 months. We saw the talks in Tianjin.
Now, what’s been interesting is that in the week or so since all the good vibes that unfolded in Tianjin, quite a bit of ambivalence in India and the discourse about whether or not this truly is a reset or can trust be rebuilt. Lots of doubts have cropped up into some of the discourse in India. What’s your read right now of the situation between India and China one to two weeks after the meeting between Modi and Xi?
XAVIER CONSTANTINO: Well, Eric, I think the Chinese are said to have a saying about interesting times as a type of a curse, may you live in interesting times. I think we’re certainly living in extremely interesting times here in India and China and Asia more broadly. So let me unpack the first term I think you used, which is a reset.
I’d say that we are maybe experimenting towards a reset between India and China, an entire redesign of their bilateral relationship. But that process is more one of tested, cautious re-engagement. That’s what both sides are trying to do with the Trumpian shadow looming large over both of them.
So we’re seeing I think between Delhi and Beijing, including we saw in Tianjin, is a sequential careful re-engagement where both sides are dipping their toes into the waters and trying to see if there is a temperature that can be comfortable for both to find a reset to their relationship. I think that’s what we’ve seen for the last week. Let’s see what happens over the next few weeks.
ERIC OLANDER: Well, I mean, one of the big topics of discussion is the reaction that Donald Trump had. And he said that the three leaders are conspiring against the United States. He also posted a truth social where he alluded to the fact that India is now in the arms of the Chinese and something to that effect.
We’ll get the direct quote later in our program. The U.S.-India relationship has started to rebound just a little bit, if not superficially, probably underneath the surface, feelings are still raw. But what about this rapprochement between Trump and Modi right now, at least publicly, in terms of trying to get those relations back on track again?
XAVIER CONSTANTINO: India-China relationship cannot be understood in separation from the India-U.S. relationship, which is a relationship that’s developed over the last 20 years very well. It’s generally been India’s most trusted strategic partner. Conversely, of course, with China, we saw relations falling and tanking post-2017-18, particularly in 2020 when they had this military confrontation along their disputed border in the Himalayas.
But on the India-U.S. relation, Eric, I’d say there’s two schools of thought here in Delhi, as we think this through. There’s one group of people who are saying this is a massive attack on India by the Trump administration. It is an economic attack, obviously, on India in terms of the terrorists that have been slapped on 50 percent plus on India.
It is a security attack on India. We saw what happened in May when India and Pakistan were close to an open war, in fact, had a deadly confrontation. And Trump obviously engaged Pakistan, hyphenated India and Pakistan, received the Pakistani Army Chief Field Marshal in the White House.
And therefore, that’s also altering the security relationship with India. The third of this triple attack, if I may call it by Trump on India, is a political attack. If you are telling someone like Prime Minister Modi, who is, of course, extremely popular here in India, right, and is a towering personality in politics, that he didn’t get his act together and that he required President Trump to mediate between India and Pakistan, that is also a political attack on the person and the figure of the Prime Minister.
So given that, there will be people who say this has been an unprecedented attack from which the India-U.S. relationship will not recover. This is a tipping point. The second school of thought, and I may be a little bit more hopeful about that one, though I tend to be realist about these things, is I think this is part of a larger tactical issue in India-U.S. relationship, which is part of a larger strategic game. What do I mean by that? Trump is hitting hard. India is pushing back and saying, we will not cave in.
They’re trying to figure out a trade deal. Let’s see what happens over the next few weeks. In the meantime, India is playing hard by going to the Chinese and hanging out with the Russians like they have before and upping the ante on Trump.
And eventually, there will be some type of normalization between India and the U.S. a few weeks, a few months, that will hurt the relationship in the long term, but still will return to another sort of positive momentum in India-U.S. relations. So I think the China angle needs to be looked at exactly like you prompted me to do through the India-U.S. relationship, which is going through a very testing phase.
ERIC OLANDER: So how much of what we saw in Tianjin, the performance that we saw among those three, the smiles, the holding hands, Putin and Modi together in the limousine, how much of that was to message to Donald Trump and how much of it was authentic among the three of them, in your view?
XAVIER CONSTANTINO: Eric, you in particular, and the audience of yours across Asia and the Global South will understand the importance of symbols, of body language. I think in the West, we tend to be a little bit more transactional about these things. You’re spot on.
I think the signal that Prime Minister Modi sent, first by going and second to the examples you just mentioned, and by hanging with whoever he was hanging, of course, a group of people that are not exactly friends with the Trump administration, I think sent that signal not only to the U.S., but also, you have to understand, to the larger Global South and the larger world that India will not succumb to coercive and pressures from the United States or anyone, whether China or the U.S., that India will always play different sides to preserve its economic, security, and political autonomy. And I think, therefore, the outreach to China, coming back to your first question, is also a type of a tactical outreach that may lead to a larger reset and maybe strategic benefits, trade and investments flowing. And trade is, of course, flowing strongly between India and China, but investments, for example, market access, which India has complained about, the Chinese have complained about market access in India.
So maybe that will also happen. But the actual game we’re playing, I think, as of these days and weeks, is one of the India-U.S. relationship returning to some normalcy and India, therefore, reaching out to a variety of other actors, put pressure on the U.S. to achieve that normalization sooner rather than later.
ERIC OLANDER: Well, the core problem between India and China, as you mentioned, is the border issue. This has been the issue that has really been intractable, at least for the past four to five years, dating back to the Galwan Valley incident in 2020, when the two sides engaged each other and there were more than a dozen deaths. And it really put the relationship into a deep freeze.
Since then, the Indian side has said, listen, we cannot form this reset, we cannot restart relations absent a resolution on the border. The Chinese wanted to separate the border issue from the rest of the bilateral issue. After some two dozen rounds of talks between the Chinese and the Indian militaries, we now seem to be getting to some sort of consensus on the border.
They’ve withdrawn thousands of troops. A lot of analysts were telling us that it just wasn’t economically feasible for both sides to maintain such a large troop presence on that border. So there are economic reasons and incentives to pull back.
Chinese Ambassador Xu Feihong earlier this week gave a press conference in New Delhi and he addressed the border issue. And I’d like to get your take on his comments and listening to some of the code words that he uses there.
AMBASSADOR XU FEIHONG SOUNDBITE: And about the early harvest of the boundary question, it’s a very complicated and very important issue in the relationship between our two countries. Both of the readers have reached a very important consensus on the boundary issue. That is to make joint efforts to realize peace and tranquility in the border area.
So according to this consensus, our two sides, I mean the working level, our two sides have kept very close interactions. The Chinese foreign minister and special representative on the boundary issue, Mr. Wang Yi, paid a very important visit to India. And he had a very successful meeting with foreign minister, Dr. Chiang Kai-shek, and also the national security advisor, Mr. Dow. And during this meeting, the two special representatives of China-India on the boundary question, they reached a 10-point consensus on the boundary issue. So both sides agreed to seek a framework for a fair, reasonable, and mutually acceptable settlement.
ERIC OLANDER: So, is there a consensus as far as you’re reading of it on the Indian side? The Chinese side is projecting that is the case. Obviously, the Chinese boundary line that they published, I think, last year or the year before has not changed.
There’s questions about the new mega dam in Tibet. So water issues are a concern as well. How much consensus do you think there’s really there and how much is this projecting?
XAVIER CONSTANTINO: I mean, we sometimes say things that hope to become true. I think that Chinese really are saying things because they hope they will become true. That has been China’s position, that the boundary issue is a distraction from a larger, possible partnership in two largest countries in the world and top economies in the world.
And I think what the ambassador is saying here is he may be overplaying, overrating a consensus. At the same time, if you take a strictly limited definition of consensus, what India and China did post-2020 onwards is they have destroyed or basically trashed every single agreement that had reached since 1993 on the boundary. A variety of patrolling agreements, very technical agreements on disputes, resolution, on very localized confrontations that would happen between different patrolling forces or to avoid escalation, etc.
So we’re returning to point zero, where now we’re saying, yes, there are on both sides principles that regulate our engagement of our military forces across the boundary. So there’s nothing new there except a return to the previous point of the pre-2020 point. But this tells you, Eric, about a larger problem in the relationship.
This is not necessarily about the boundary. There’s a larger cognitive difference between India and China on their future roles in Asia and in the world stage. For India, like you rightly said, the point was always that this problem along the boundary and the escalation we’ve seen and the rising of the temperatures and the frequency of confrontations since 2013 were symptoms of a larger structural problem between India and China.
So India said basically we have to find a real reset to the relationship, to use your word. And we have to work across different levels, the boundary, market access, trade, investments, weaponization of different flows of the critical minerals, or at least simply issues about the Belt and Road Initiative, right? That was the Indian approach.
The Chinese approach post-2020 was not even understanding that and refusing to understand. It had a very different vision, which is, listen, why are you being unreasonable? There’s a boundary issue.
We can separate that. We can freeze that and start to work on many other levels of our relationship which need attention. I mean, we did a study recently, Eric, and these are the two largest countries by population in the world.
Climate change is one of the most important global agendas today. But since 2016-17, India and China have had no meaningful dialogue on anything related to climate, the energy transition, EVs, critical minerals, etc. So you see the two countries have now spent 10 years not talking to each other on the most important thing.
Forget trade, investments, forget no direct flights between India and China except for Hong Kong, forget no visas for Chinese tourists to come to India. So there’s a real freezing of the relationship. And the Chinese have said in that sense always, and I think what the ambassador is saying now is that we are finally open to doing business beyond the boundary.
There’s a broader consensus on how to regulate that issue. Let’s move onwards. And I think India is playing game for the reasons we just discussed before because India is saying also we’re coming under stress from the Americans and a very difficult economic situation.
So we need to open up to China now.
ERIC OLANDER: Yeah. And the border is one of many concerns, as you pointed out. I mean, I could spend probably the next 15 minutes going through the list of others, but let me just do a couple right off the top and get your reaction.
China’s all-weather friendship with Pakistan remains a deep concern in New Delhi. China provides about 81 to 82 percent of Pakistan’s military equipment. It is an unconditional supporter of Pakistan.
Even in Operation Sindor, it was firmly behind the Pakistanis, came out very strong in the rhetoric in the fight between India and Pakistan over Kashmir. We have the constant concern of China’s influence in the Indian Ocean region, where in the Maldives and also in maritime issues as well, and then obviously in Bangladesh and Sri Lanka, where China’s been seemingly trying to do a strategy of encircling India with its friends and its partners in such a way to weaken India’s relationship in South Asia. That’s the perception.
Talk to us a little bit about the broader South Asia challenges that this relationship faces.
XAVIER CONSTANTINO: So let’s split this in two parts, the Pakistan region, the Pakistan fact in the region, and the non-Pakistan fact in the region.
ERIC OLANDER: And when you say the Pakistan region, do we also count Afghanistan in that as well? Because Pakistan, Afghanistan and China now seem to be coming closer together with an extension of the China-Pakistan economic corridor into Afghanistan.
XAVIER CONSTANTINO: Absolutely. In fact, we finished another study recently where we noticed that the Chinese don’t speak about South Asia when they go to Afghanistan. They see more part of a Central Asia where Pakistan has a particular importance and not India.
Anyway, but on the Pakistan point, Eric, absolutely. I think what we saw in early May when India and Pakistan were fighting out what effectively was a war, I mean, with active military deployments, especially air force deployments and bombings on both sides. It’s less about the equipment that India may be worried about.
And that’s a known story of how much China has passed on and co-developed for the Pakistani air force in particular. It’s more a concern about what live support did the PLA offer to the Pakistani military during that confrontation with India? Intelligence, spatial intelligence in particular, operational support for what the Pakistanis were deploying, drone technology in particular too.
So I think that’s something that was a bit of a tipping point and really concerns India because it’s sending a signal that if China’s willing to go all out to offer operational and intelligence support to Pakistan during a life conflict with India, it will do that knowing that India will find out. And this is a very clear signal to India that, you know, of the other things that we could do to escalate, we actually jumping a few to go to one of the most important issues, right? One of the most…
ERIC OLANDER: And what’s the working theory right now is that China did offer live support during the conflict or they’re still not sure?
XAVIER CONSTANTINO: I think the broad consensus that China did and the evidence is it did, the question is how much? It’s always an issue of how much, right? Was it limited because it comes with servicing certain materials and equipments or was it an active signal that was really going all out and supporting Pakistani military to even test Chinese weapons and technologies, but also sending a signal at highest level to India?
Now, the other environment, the non-Pakistan region, I think we need to separate two things. One is, of course, how much is China’s presence in South Asian Indian Ocean region, all the way from the Malacca Straits to the Gulf of Aden, for example, broadly speaking, in the Indian Ocean region and from Nepal to the Maldives and Sri Lankan Bangladesh, how much of that is driven by the words you used or the perception you mentioned is often very popular that this is to encircle India. So, how much of the India effect is driving Chinese activities?
I think, again, we need to separate this in two parts. Certainly, India matters for the Chinese, but for an economy that is growing so fast, for People’s Liberation Army and the Navy in particular, it is deploying so fast, right, and modernizing and projecting power, securitizing its economic interests across the Indian Ocean region, trade lines, shipping lines of communication. I think a lot of this is just a reflection of China’s rise, of China’s power projection, of China’s interests.
And therefore, it’s not always easy to separate both. I think in Delhi, we tend to see things, of course, from an India-centric perspective and as a function of the not-so-good India-China relationship. But there have also been instances of India and China coexisting and even cooperating in the past in this neighborhood.
And I think we see all of that playing out these days. There’ll be elements where India and China are loggerheads in third countries and actively undermining each other. But there are also examples where they’re quietly tolerating each other, coexisting.
There’s a third element where they sometimes actually converse and talk about each other and share assessments, less in the last five years, and even less, but in the past, cooperating and coordinating with each other on political and economic affairs across the Indian Ocean region.
ERIC OLANDER: Yeah, this is one of the challenges that I have when looking at China-South Asia relations. When you see the enthusiasm that the Chinese bring, say, to China-Bangladesh relations or in Sri Lanka as well, it’s sometimes very easy to fall into the trap that says, well, everything is being seen through an India lens. And sometimes it’s just a bilateral engagement.
Other times it may be related to India, but separating those two can be quite difficult given the dynamics of the relationship with India. So it’ll be interesting to see if China-India relations improve. Will we see a softening, maybe, of some of those other relationships that China doesn’t have to try as hard because it’s no longer in the mode of encircling India or that strategy, if that exists?
XAVIER CONSTANTINO: Just to give you an example, Eric, in 2017 or 18, PLA had its first ever joint military exercise with the Nepali army in Nepal, ever in its history. I mean, the question is, between 1949 and 2018, you didn’t have a single one. Now, did it happen because of India?
Did it happen because naturally there are security synergies between the Chinese border areas and what Nepal is an interest, right? Is this all about India or is it just actually natural that two border countries would have had already a joint military exercise?
ERIC OLANDER: Yeah, hard to tell. You mentioned the trade relationship between China and India, and this is a very complex relationship in part because the two countries are not necessarily complementary to one another. And this is the point that the Americans make quite a bit, is that both want to sell products, iPhones in this case, for example, made in India to the US and also the Chinese sell technology to the US, but they’re not going to sell an Indian-made car to the Chinese.
So one of the challenges we face right now is that there is a lot of Chinese products coming into India, but not so many from India going into China. And that was an issue that External Affairs Minister S.J. Shankar brought up at the BRICS Virtual Leaders Summit that interestingly Modi did not go to. And I’d like to see if you have any theories on that.
But let’s take a listen to a highlight of S.J. Shankar’s opening statement, where you can hear the undertones of the economic frustrations that India has with China.
INDIAN EXTERNAL AFFAIRS MINISTER S. JAISHANKAR: The world requires constructive and cooperative approaches to promote trade that is sustainable. Increasing barriers and complicating transactions will not help, neither would the linking of trade measures to non-trade matters. The BRICS itself can set an example by reviewing trade flows among its member states.
Where India is concerned, some of our biggest deficits are with BRICS partners, and we’ve been pressing for expeditious solutions. We hope that this realization will be part of the takeaways from today’s meeting.
ERIC OLANDER: So clearly S.J. Shankar taking aim at the United States over tariffs, and that was the purpose of the gathering that they had virtually. But also that reference to the imbalances among BRICS members is, of course, has to be directed at China.
XAVIER CONSTANTINO: What’s your takeaway from that? So the first point, Eric, on Modi’s absence. I think the Prime Minister of India, if I would guess, is probably giving President Trump some time to digest Tianjin and what we saw there.
So, I mean, doubling it down, doubling down now and showing up here too would have been maybe a little bit too much. So let’s see. So I think some time to digest maybe.
And the signal was probably well and loud, heard well and clear in the White House. And we saw already some initial warming up in Trump’s social media messaging towards India and saying, you know, he’s my buddy, we’ll find eventually something, which I think to that second school of thought that has been mine, I think we’ll find something, some type of a renormalization between India and US in the next few weeks. On this message by the external affairs minister J.
Shankar, I think it’s a double message. There’s a message here to the US, obviously, right, that we cannot use trade for political purposes. And we have to regularize that those trade flows.
There’s a second message, like you, I think, point out also to the fellow BRICS country, China, that we need a more symmetric, maybe not more symmetric, a less asymmetric trade volume, which means we need to reduce our import dependence on China, and not just quantitatively, but also in areas that are strategic and concerning, whether it’s, for example, the rare earth magnets that China’s restricted exports of recently.
And at the same time also, and this has been a long standing concern from India, maybe that ship has sailed, I think in fact has probably, but was market access for Indian investments in China. This was something India tried in the late 2000s, up to 13, 14, relations were good with the Chinese, right, and the Chinese never really conceded on that. At the same time, of course, you can also make the opposite argument that Indian companies don’t have the firepower, don’t have the capacity to ride the manufacturing train in China.
Western American European companies have done this for 20, 30 years and are now on the way out partially are trying to diversify. So in this context, of course, it’s very difficult, given also the limited number of big Indian companies to enter the Chinese market. But I sense that I’m still hearing that language in Dr. Jaishankar’s speech right now that asymmetry means also you also have to give us market access. You also have to make India part of the Chinese development story, whatever’s left of that. And not only China coming to the support of India and making the manufacturing revolution happen here in India.
ERIC OLANDER: But there’s a new urgency to this issue because of the tariffs from the United States, where there’s a 50% tariff now on products from India sold into the United States. There are some big carve outs. So to be fair, it’s not universally across the board.
But this idea maybe that China could help relieve some of that pressure, but that’s going to be a difficult thing, given the fact that the Indians don’t make much that the Chinese need. Is that an accurate assessment? How could this trade be balanced?
Because right now there’s a rather sizable trade deficit in favor of China.
XAVIER CONSTANTINO: You know, there’s two slogans that I hear a lot when I speak to Indian officials, both from government and industry. One is co-development, right? We want to be partners in developing anything new that is going to run the future economy, global economy.
That’s technology that could be processing for critical minerals, for example, or recycling, right? Or EV industries, for example. The second word is make in India.
You must have heard this, Eric. It’s about localizing manufacture in India and attempting to do what Japan did back in the 70s and 80s, what the Chinese have done since the 80s, 90s, and do more of that here in India, right? And I think there, there are actually congruences between India and China.
Chinese companies are also very interested in the Indian market. They want access. They want protections from the Indian government in what remains a still deeply politicized economy in this country, protected economy.
I mean, again, that’s what Trump is telling us every two days and reminding us of, and there is truth to that.
ERIC OLANDER: Which he’s not wrong about, by the way. And that’s been a longstanding complaint of the Americans even before Trump.
XAVIER CONSTANTINO: And same for the Chinese. They’re not saying it as loud in their own way, but they have been dying, if I may say, to gain access to a lot of sectors in India, right? Japanese companies have done well here.
European companies have done well, particularly the last six, seven years now. So there is a lot of congruences there. They’re also off China, maybe investing more in India, deploying capital to build capacity here to help India lift its economy.
And most importantly, Eric, as you will know, this whole idea that by China delocalizing, diversifying its production outwards to the Vietnam, to the Mexicos, to the Indias of this world in order to circumvent trade barriers in the US, et cetera. So the Chinese also have an eye on what we call the supply chains, the big battle that we’re all facing, which is basically it’s produced in India, not only for the Indian market, but also to re-export whatever we can to the global South or the US, et cetera. Because the costs of production, as you know, Eric, are rising in China.
And it’s a very difficult moment for some Chinese companies. So India in that sense is the only market that offers scale and price attractiveness to any foreign investor.
ERIC OLANDER: But isn’t that one of the concerns that the Chinese have? And my reading in the Chinese press is on the one hand, yes, they would love to have access to this vast Indian market, but they’re also very nervous about India, which is pretty much the only country in the world that could rival China in the scale of manufacturing of becoming the iPhone country. And that’s one of the reasons that people suspect that China has limited the flow of technology.
It’s limited the flow of people. Huawei engineers, for example, have been restricted from going. Some of Foxconn’s engineers have been restricted from going to India.
And so there is this kind of nervousness that if India does this too well, then that could displace China at a time when employment is under pressure in China and the economy is quite slow.
XAVIER CONSTANTINO: Eric, I’m not a China expert, so I’ll defer this one to Jaben, who we’re going to speak to. He’ll give you the right.
ERIC OLANDER: We’ll speak with him later on.
XAVIER CONSTANTINO: I will tell you that from what I understand, you are spot on on a big debate that is happening, as I understand, inside China, which is exactly the question. Do we ride this Indian tiger? Do we use it to our benefit by investing and deploying capital there?
And that depends obviously on the tiger allowing to be ridden and being fine in accepting Chinese investment, of which we see in the opening act now of India saying, yes, come in. We may need you in certain sectors. We want you in certain sectors.
Or school B of thought in China, which is the one you mentioned, which is this country is poised to be a rival and a competitor. So we need to isolate and starve this economy as much as possible and certainly not deploy our best, whether it’s capital or engineers or know how to India, because they will do a China on us the way we did on the West 20 years.
ERIC OLANDER: Yeah, that’s right. What do we make of the fact that Donald Trump is not going to come and participate in the Quad summit and that right now the relationship in the Quad is in question? Do you believe that there’s a possibility that the Quad in the Trump era disintegrates and that India does not see that it’s worth being a part of this relationship going forward?
XAVIER CONSTANTINO: I think as we speak in these days, in the short term, the Quad does not figure. We’re seeing a larger game that we just discussed. China, US, how we’re going to rebalance this thing, right?
That’s one. But in the medium to long run, let’s say six months from now, the next rest of the Trump administration, I’d say that we will see continuity to the Quad in a thin version, not the thickening version that was attempted, which was let’s work on technology, on climate change, on non-security issues, giving it an economic dimension or what they call the Quad and public goods in Asia, the provision of public goods, which again, surprise, surprise, is what the BRI has been always about. And here’s suddenly the Quad late in the game, I’ve argued, comes in already cast in a very different image, which was a security defense relationship and tries to correct that. That has now been suspended, the thickening of the Quad.
It’s politically, I think, a little bit in the freezer for the next few weeks and months. But I still think that post 26, 26 honours, we’ll see some utility of the Quad, even if only Eric and India will see that utility and has always seen that utility in the Quad to instill with the Chinese, the fear of we have an alternative. This is a signal again, this is a gang we hang out occasionally with.
We could upgrade it, we could do more or less with them. And now I think in Delhi, you hear different voices of how the Quad strategy paid off up to now or not. People say that the Chinese are playing game with India precisely because they’re responding to India’s Quad strategy.
The other people tell you it was a disaster, it didn’t lead to anything. Look, where’s the Quad now when we need it?
ERIC OLANDER: I guess the Quad could be a very useful tool to cement India’s reputation as a true non-aligned country. And I remember growing up in the Cold War. I think I’m older than you are.
But one of the things that made India so frustrating to the United States during the Cold War was its resistance to choosing a side. And yet we have now pressure coming from the United States. And again, there’s a lot of difference between Trump and his ministers.
So the rhetoric from Trump on India may be softening, but not from the secretaries. Let’s take a listen to an exchange that Commerce Secretary Howard Lutnick had on Bloomberg. And it comes down to this question that I think you’re the perfect person to answer about the pressure from the United States for India to, quote, choose a side.
BLOOMBERG TV ANCHOR: This came from the president this morning on social media. It looks like we’ve lost India and Russia, for that matter, to deepest, darkest China. May they have a long and prosperous future together.
This relationship between the U.S. and India has clearly soured. You yourself said earlier this year that India rubbed the U.S. the wrong way. There’s an understandable tension that continues to build.
But they’re not the only ones buying Russian energy. The Chinese are buying Russian energy and for that matter, the Europeans, too. And I think there’s a sense from the Indian side, Mr. Secretary, that they feel singled out, perhaps unfairly. What’s your message for them this morning?
U.S. COMMERCE SECRETARY HOWARD LUTNICK: Well, remember, before the Russian conflict, the Indians bought less than two percent of their oil from Russia, less than two percent. And now they’re buying 40 percent of their oil from Russia. What they’re doing is because the oil is sanctioned, it’s really, really cheap because the Russians are trying to find people to buy it.
And so the Indians have just decided, ah, the heck with it. Let’s buy it cheap and make a ton of money. But you know what?
That is just plain wrong. It’s ridiculous. And they either need to decide which side they want to be on.
You know, what’s funny is the Chinese sell the Chinese. Well, we’re always willing to talk. The Chinese sell to us.
The Indians sell to us. They’re not gonna be able to sell to each other. We are the consumer of the world.
People have to remember it’s our 30 trillion dollar economy that is the consumer of the world. So eventually, they all have to come back to the customer because we all know eventually the customer is always right.
ERIC OLANDER: Well, that’s a tone that I suspect probably rubs quite a few people in Modi’s administration the wrong way. But there you heard it. They’ve got to choose a side.
Let’s close our discussion about looking forward. How does India pursue its path now with the Chinese, the Russians, the Americans, and then all of the other geopolitical interests that it has in South Asia?
XAVIER CONSTANTINO: So on the first point, use the word, I think I heard the word souring of the relationship. Well, as a consumer of many liquors, I think that are fermented, I think souring sometimes can lead to wonderful things and to very good results in terms of products. So I think souring is part of a process of relationship.
And hopefully things will sweeten. And I think they will be sweetened sweetening. So to your point about or to Mr. Navarro’s point about choosing sites, you know, I we’ve used you’ve heard this, Eric, again, probably that India is criticized for being a fence sitter sitting on the fence, not choosing sites. Well, I grew up in a village in the countryside. And I think sitting on a fence is very, very difficult. You can jump over it, you can keep balance for a second or two.
But sitting on a fence persistently and continuously is a very difficult job. It’s an art, it requires skill, it requires equilibrium, it requires reading the wind, the push and pull factors left and right. So I think India has a long tradition of sitting on the fence.
That is a strategic tradition of preserving autonomy, of not falling into different camps or different courtyards, but at the same time remaining open and you sit on the fence. So you have a good vantage point and you can communicate with a variety of actors around you to keep that balance. And I think if Mr. Navarro probably may not know that, or and I think that’s the most likely scenario, he knows that India will not choose a side. But he’s part of this drama that I was speaking out before, which is full of symbols and signals. The Tianjin drama and the symbols that were sent in India’s instruments of diplomacy to Mr. Trump. Here, Mr. Navarro is another cast in this drama, who’s also sending a signal to very typical Americans, popular, if I say, rural voice, right?
And metaphors. So he’ll say what he must. Those signals are heard here in Delhi.
But my guess is they’re part of this larger drama that is playing out, leading to a new equilibrium in India-US relationship. Because I find it hard to believe that anyone in Washington DC, maybe that’s wrong for some of the MAGA crowd, the more political crowd that is coming to power and is less literate in the international relations domain. But I think President Trump and his advisors and Mr. Navarro know that India will not succumb in a line. In fact, what they’re doing is precisely to test how far will India go. And India vice versa is also seeing whatever it can do to see how far can it go before we reach a new equilibrium between India and the US.
ERIC OLANDER: The book is How China Engages South Asia in the Open and Behind the Scenes, and it covers truly all of South Asia. It’s a multi-part report. I’m going to put a link to it in the show notes that Constantino co-wrote with or co-edited with Jabin Jacob, Professor Jabin Jacob, who we’re going to have on the show coming up very soon to dive more into the China-India aspects of this.
Constantino, thank you so much for your insights today. Absolutely fascinating. And the ground that we covered was just enormous.
Constantino Xavier is a senior fellow at the Center for Social and Economic Progress in New Delhi, and also a non-resident fellow in the Foreign Policy Program at the Brookings Institution in Washington. Constantino, many, many, many, many thanks for your time today. Thank you, Eric, and to your listeners for having me here.
It was wonderful to have you. And again, if these are the issues that you’re interested, please check out ChinaglobalSouth.com. We’ve got editors in Asia, Africa, the Middle East, and now in Latin America, our new editor Maria from Lima, Peru is going to be launching our Spanish language edition that will come out starting in October.
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Well, for the entire team around the world at CGSP, I’m Eric Olander. Thank you so much for taking the time to join us today on this show. Thank you for listening and for watching.
