India-China Reset: Is This The Right Time?


Once again we are witnessing high level engagement between India and China. This is an important development after repeated Line of Actual Control (LAC) violations by China, a long standoff in Dolam, a faceoff in Arunachal Pradesh and the recent Maldives flashpoint. Just recently India was willing to be a lone voice against China’s Belt and Road Initiative and its debt-trap diplomacy while pursuing high-level diplomacy with the western powers to multiply its options viz-a-viz Beijing where a lot of big talks are going on yet to fructify. Everything seemed to be on track but then India decided to go ahead with another reset.

In its attempt to reset with China, India refrained from taking an assertive stance on the Maldives crisis and allowed its strategic advantage slip to China. India also coldly distanced itself from all events to mark the Dalai Lama’s 60 years in exile. Though, India managed to convince China to put Pakistan on the grey list of the Financial Action Task Force (FATF) but only in exchange for Beijing gaining the vice-presidency of the organization. This is the second time in 4 years that the Narendra Modi government is trying a reset with China.

The first attempt in 2014 ended up in embarrassment as the Chinese President Xi Jinping’s India visit was accompanied by the intrusion of hundreds of Chinese troops in Chumar in Ladakh, Jammu & Kashmir. It is interesting to note the events that followed the first failed reset attempt in 2014.

“You just can’t trust the Chinese; they use the language of co-operation and engagement in a misleading way to achieve their objectives”

China stonewalled India’s entry bid in the NSG: In 2015, China stonewalled India’s entry bid in the NSG. China’s position on this remains unchanged so far. Chinese opposition has made India’s entry into the group difficult as the NSG works on the principle of consensus. China not only stridently opposed India’s entry but also pushed its partner in crime Pakistan’s (having serious allegations of proliferation of nuclear technology by its scientist A Q Khan) application for membership of the 48-member elite nuclear club which controls nuclear trade. It was a malicious attempt to interlink the applications of India who has an impeccable non-proliferation record with Pakistan who cannot claim the same for membership of the club that sets the rules for global nuclear commerce.

China blocked India’s move to designate Masood Azhar a terrorist: China has repeatedly blocked India’s move to designate Pakistani national Masood Azhar a terrorist under the Al-Qaeda Sanctions Committee of the UN Security Council. 14 out of 15 countries were willing to designate Azhar a terrorist but China alone decided to go against all the others in the bid. Jaish-e-Mohammed (JeM), a terror outfit founded by Masood Azhar is already in the UN’s list of banned terror outfits. JeM was responsible for the attack on the Indian parliament in December 2001 that brought India and Pakistan to the brink of a full-scale war. Jaish-e-Mohammed is also responsible for 2016 Pathankot airbase attack in Punjab, 2016 Uri attack in Jammu and Kashmir, 2008 Mumbai attacks and the 2002 murder of American journalist Daniel Pearl in Karachi, Pakistan to name a few.

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China refused entry to Indian pilgrims: In 2017, China cut off access for Indian pilgrims to the annual Kailash Mansarovar Yatra in Tibet. Hundreds of pilgrims pay visit to the holy Mount Kailash via Nathu La Pass every year but were denied entry this time. After the Indian efforts of reset China has agreed to allow pilgrims through Nathu La, months after it shut the route in June 2017 following the standoff on the Dolam plateau.

Sino–India border standoff: The Dolam standoff began in mid-June 2017 after Indian and Bhutanese opposition to the Chinese Road construction in the disputed territory towards the Dolam plateau. The standoff went on for more than two months. Since then the Chinese have built sentry posts, trenches and helipads, all not too far from the standoff point.

China refused to share hydrological data: According to the 2006 India-China Expert Level Mechanism (ELM) on Trans-border Rivers, China is expected to share hydrological data information of Brahmaputra River (Yarlong Zanbo in Chinese) and Sutlej River (Langqen Zangbo in Chinese) with India from 15th May to 15th October each year. In 2017, China refused to share hydrological data in violation of two MoUs as India battled floods.

Increasing Chinese transgressions at LAC: India and China share unresolved 4,057-km Line of Actual Control (LAC) where the Chinese have shown brazen military aggression. Between 2010 -2013 and 2014-2017, India recorded 1,240 and 1549 transgressions respectively at LAC by the People’s Liberation Army. The statistics clearly show a significant increase in Chinese aggression across the LAC.

“China and Pakistan were the driving force behind the 2012 Maldivian coup which allowed China to extend its footprints in Maldives”

Historically an Indian ally, the Maldives archipelago comprising of 1,200 coral islands lies next to key shipping lanes which ensure uninterrupted energy supplies to countries like China, Japan and India. It is located just 700 km from India’s Lakshadweep island chain and around 1,200 km from the Indian mainland. The recent flashpoint between India and China is the Maldives crisis which began on February 6, 2018 after the Maldivian President Abdulla Yameen ordered the arrest of the Chief Justice of the Supreme Court along with a former president and declared a state of emergency.

The Maldives crisis has spiralled into a power struggle between the two Asian giants whose inception was in 2012 when Yameen staged a coup against the first freely and democratically elected President Mohamed Nasheed and forced him to resign at gunpoint followed by a police mutiny in the Indian Ocean island nation.

Many in the intelligence community across the globe believe that China and Pakistan were the driving force behind the 2012 Maldivian coup which allowed China to extend its footprints in Maldives. The coup also led to the scrapping of Indian giant GMR’s Male airport contract which was subsequently awarded to a state-owned Chinese company. Beijing has been wooing Maldives for long to dominate the strategically-important sea lanes of the Indian Ocean Region. Maldives has traditionally been an Indian ally which now seems to have fallen to China.

Until 2011, Maldives was not a priority in China’s foreign policy; Beijing did not even have an embassy in Male but after the 2012 Maldivian coup the Sino-Maldives collaboration is going in full swing. Listed below are the key China-Maldivian engagements post 2012 coup in the island nation:

Year 2014: In 2014, Xi Jinping became the first Chinese president to visit Maldives since 1972 wherein Maldives endorsed China’s Belt and Road Initiative. Subsequently, Export-Import Bank of China (Chexim) disbursed a $373.8 million loan to build a new 3.4 Km runway, seaplane terminal and cargo facility at Velana International Airport. Chexim also issued a $66 million loan to build ‘China-Maldives Friendship Bridge’ connecting the airport with the island capital of Male.

Year 2016: Maldives registered a prominent increase in the Chinese tourist arrivals. From 42,000 i.e., 6 percent of arrivals, in 2008 to 300,000 Chinese tourists accounting for 25 percent of all arrivals in Maldives in 2016, this is a clear example of how China’s intelligence agency MSS uses tourists as a foreign policy tool. The Maldives government leased “Feydhoo Finolhu”, an uninhabited island near the country’s capital city of Male, to a Chinese firm for 50 years at a cost of $4 million. Maldives foreign minister Ahmed Naseem informed the media in April that China had bid to build a port on Gaadhoo island in the southern atoll of Laamu roughly 800 Km from the Indian mainland. Several reports suggest that Beijing has already begun construction work on the island.

Year 2017: BoCom International, the Hong Kong based securities arm of China’s fifth-largest Shanghai-based Bank of Communications was the sole underwriter of the Republic of Maldives inaugural sovereign bond valued at $200 million with a five-year maturity period. This marked the first transaction in which a Chinese investment bank was the sole lead of an international sovereign bond issuance. In August, Maldives also permitted the docking of three Chinese warships in Male. Maldivian President Abdulla Yameen Abdul Gayoom visited China in December where Maldives and China signed a Memorandum of Understanding that brought Maldives into the Maritime Silk Road, a component of China’s ambitious Belt and Road Initiative (BRI). During the visit Maldives also signed a free trade agreement with Beijing becoming the second south Asian country after Pakistan to do so. China and Maldives also signed a protocol to build the joint ocean observation station at Makunudhoo Island of the Maldives not far from the Indian mainland.

“Over 70 percent of Maldives’ current foreign debt is owed to China, on which the loan interest alone “is more than 20 percent of Maldive’s budget”

The above events clearly give a glimpse of Chinese intentions against India which have seriously dented India’s status as peacekeeper of the region and the primary regional partner of the Maldives. There can be no greater indication of this than the fact that Maldives was the only SAARC country that seemed reluctant to follow India’s call for the boycott of SAARC summit in Pakistan after the Uri attack. India needs Maldives to maintain its leadership in the region. Unfortunately China has already started trapping Maldives in its deb trap similar to what it did with Sri Lanka under Rajapaksa. Already over 70 percent of Maldives’ current foreign debt is owed to China, on which the loan interest alone “is more than 20 percent of Maldives’ budget. While a lot of this is due to India’s passivity, India needs to understand that China will adopt this strategy everywhere to undermine it. China firmly believes that a strong & assertive India would never be in its interest and it will do everything possible to undermine Indian growth and its strategic influence.

Despite all, India continues to be optimistic in its efforts to reset ties with China. Though, we understand that such engagements may help to develop some sort of mutual trust and avoid any unexpected military conflict between the two Asian giants, we also believe that India is moving too fast on the reset for short term gains. “You just can’t trust the Chinese; they use the language of co-operation and engagement in a misleading way to achieve their objectives”.


  • India, China try to reset ties ahead of Modi’s SCO trip
  • Dalai Lama snub and India’s plans to reset China ties
  • Chinese road building team enters Arunachal Pradesh, India seizes equipment
  • Dolam Standoff: How India Played Chess With Chinese Checkers
  • India’s Strategic Choices: China and the Balance of Power in Asia
  • US woos India into 100-year alliance against China
  • China is Testing India by Trying to Control the Maldives Crisis
  • China may put South Asia on road to debt trap
  • Why India is not part of the Belt and Road Initiative summit
  • China’s Insecurity Leads to India’s NSG Bid Being Blocked Again
  • A.Q. Khan boasts of helping Iran’s nuclear programme
  • China blocks moves to list Masood Azhar as global terrorist
  • Foreign Terrorist Organizations
  • Parliament attack had brought India, Pak on brink of another war
  • All you need to know about the 2001 Parliament attack
  • China denies permission Kailash pilgrims to cross Nathu La pass
  • No hydrological data from China in 2017, India monitoring water flow in trasns-border rivers
  • China’s transgressions of Indian borders
  • 600 border violations by China along LAC since 2010
  • India alleges China committed 426 border violations last year
  • China behind scrapped GMR deal to extend footprint in Maldives
  • Maldives president quits after ‘coup’
  • China-Maldives FTA among 12 agreements penned during Yameen’s visit
  • Three Chinese naval ships arrive in Maldives
  • Ex-president flags presence of Chinese warships in Male
  • China may build port in southern Maldives
  • Firm advises BOCOM International on US$200 million sovereign bond offered by Republic of Maldives
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