Border clash a “turning point” in India and China, the ambassador said

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The border confrontation between India and China, which has killed 20 Indian soldiers is going to be a “turning point” in the bilateral relations between the two Asian giants, former ambassador of india to China told CNBC.A ” violent face-off in the Himalayas occurred Monday of last week, along the border, in the Galwan Valley in Ladakh where the troops of India and China have been locked in a stalemate for the month of May.

While India has said that both sides suffered losses, China did not disclose the number of its soldiers died in the battle. The meeting caused concern and grief from the public opinion even as the two nuclear powers moved to deescalate tensions.

“This is definitely a turning point in bilateral relations, but I would not call it a breaking point,” said Nirupama Rao, who has served as India’s ambassador to China between the years 2006 to 2009.

Speaking of CNBC’s “Street Signs” on Wednesday, she said that there were indications that the two countries had a constructive discussion and tried to disengage of the disputed areas. Still, she said, the escalation of violence not seen for decades, cast a “long shadow” on the relationship.

On Wednesday, the Chinese, the ministry of defence said, “the responsibility of The China-Indian border conflict lies entirely with India, China, the hope to maintain peace in the border areas,” according to a CNN translation of the comments.

Trade and investment ties

In recent weeks, anti-China sentiment in India has increased, with people calling for a boycott of Chinese products in the country. But experts say that it will be difficult for India, suddenly, cut off or reduce trade and economic ties with its neighbour.”India’s exposure to China is asymmetric in terms of trade and investment,” said Radhika Rao, an economist at Singapore’s DBS Group, which is not related to the ambassador.

“China has displaced the European Union to emerge as the India’s largest import partner six years ago,” she said in a Tuesday note.

India cannot be expected to protect and safeguard its interests in what is becoming a very sensitive to the situation in the bilateral relationship.

Nirupama Rao

the former ambassador of india to China

India has imported more than $62 billion worth of goods from China between April 2019 to February of this year, and has exported only about $15.5 billion worth of products, Indian government data showed.

Most of India, the imports from China are manufactured items such as electrical and electronic equipment, to the sides of organic chemicals, according to Rao of DBS. She explained that China also has a remarkable portfolio investment in India in the technology sector, with start-ups like Paytm, Ola, Swiggy and Zomato backed by Chinese investors.

New Delhi had already introduced restrictive measures on Chinese foreign direct investment before the last week’s border clash.

A convoy of the Indian Army goes by Gagangeer along a highway leading to Ladakh, on June 22, 2020 in Ganderbal, India.

Waseem Andrabi | Hindustan Times | Getty Images

“To the extent of the trade and the economy, and investor relations go, there is a very complex web of interconnection between the two countries,” Ambassador Rao said, explaining that the decoupling or disengagement of China, is not an easy task. This is despite increasing calls from the public for India to do something about balancing its economic ties better and the preservation of its national interests.

She added that there will likely be measures taken to curb Chinese presence in the areas that affect India’s security, in areas such as telecommunications and critical infrastructure.

India’s relationship with the allies

The Experts said that the latest dispute with China is likely to grow more closer to India, the united States, Japan, Australia, and Southeast Asian countries.

India’s foreign policy has mostly remained strategically autonomous, which means that the Prime Minister Narendra Modi, the government has to balance its bilateral relations with the united States as well as China and Russia.

The border clash can potentially convince India to break its decades-long practice of trying to not be connected to any alliance structure the opposition or in favour of a third country, Rodger Baker, senior vice president of strategic analysis at Stratfor, told CNBC’s “Squawk Box” on Wednesday.

“If it strengthens the India, the links with Australia, Japan, the united States, with the Quad, so that in the end is a risk for the Chinese out of what happened here, at the border,” he said, referring to the informal alliance between the four countries, which aims to promote free and open to the Indo-Pacific region.

Ambassador Rao said that if India has pursued closer ties with the UNITED states, it may cause concern that China ” has a tendency to be uncertain about these things. ”

“But India cannot be expected to protect and safeguard its interests in what is becoming a very sensitive to the situation in the bilateral relationship,” she said. “Even as we promote and pursue strategic autonomy, we will have to review and reconsider the way in which our relations with the rest of the world are configured. ”

Indian foreign secretary Subrahmanyam Jaishankar on Tuesday, met with his counterparts from Russia and China virtually, and said, ” Respect for international law, recognizing the legitimate interests of the partners, supporting multilateralism and the promotion of the common good are the only mode of sustainable construction to the world order. ”

CNBC of Lilian Wu contributed to this report.

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