As if the Narendra Modi government’s China headache isn’t bad enough, it is being battered this week by two additional worries. The first is the Rashtriya Swayamsevak Sangh-affiliate Swadesh Jagran Manch’s demand that the Board of Cricket Control of India reconsider its decision to hold the Vivo Indian Premier League or IPL in Dubai, Sharjah and Abu Dhabi because Vivo is a Chinese company and BCCI’s move goes against the “current mood of the nation”.
New Delhi’s second big concern is its friend and ally Japan’s recent unusual request to the Ministry of Commerce and Industry to exempt 990 items from raised tariffs because these are imported from China, pointing out that these are necessary for the production of Japanese goods in India.
Now the Ministry of Commerce and Industry — as well as the rest of the Modi government — has been looking long and hard at reducing India’s dependency on China ever since People’s Liberation Army soldiers occupied Indian territory in Ladakh two months ago. India knows its trade deficit with China is a key vulnerability, even though it has fallen marginally from $53 billion to $48 billion this year (total trade is $81 billion).
New Delhi realises that it needs to do something quickly, to show that it won’t take things lying down — the banning of the 59 Chinese apps, including TikTok, was the first shot in that direction — but the bitter truth is that magic wands are in short supply these days.
To Quad or not
None other than Chinese ambassador to India, Sun Weidong, issued a veiled taunt last week at a webinar organised by the Institute of Chinese Studies (in which ThePrint was a media partner) when he said: “forced economic decoupling…will only lead to a lose-lose outcome.”
At the webinar, Ambassador Sun pointed out that, “92 per cent of Indian computers, 82 per cent of TVs, 80 per cent of optical fibres, 85 per cent of motorcycle components are imported from China.”
Certainly, it is this vulnerability that prevents New Delhi from allying itself much more closely with the US, despite calls not just by the Americans, but also the Australians and the Japanese, to do so. The US Navy exercised with the Indian Navy a couple of weeks ago, and separately with the Australian and Japanese navies 4,000 km away, because New Delhi wouldn’t agree on a joint exercise.
Another move is in the offing to have all four navies of the Quad exercise together in an expanded version of the ‘Malabar’ exercise this November – but New Delhi hasn’t officially said yes so far. With the enemy dragging its feet in Ladakh and throwing all schedules to withdraw to the winds, New Delhi knows Beijing is testing its nerve.
That is why India continues to choose ‘strategic autonomy’, the 21st-century version of ‘non-alignment’, a phrase the Modi government loves to hate because it stinks of Jawaharlal Nehru.
Is strategic autonomy paying?
None other than External Affairs Minister S. Jaishankar admitted over the weekend that “it would be a great disservice if China viewed India through the American lens”. That was also a signal to China that Delhi isn’t about to fall into anyone’s lap, at least in the near future.
There are other fears at stake, even if one half of the government is tempted by America’s wooing — let’s face it, there is no other country in the world that can take on the Chinese. But caution has won the day because India is still hugely dependent on Russian weaponry and Russia isn’t about to stomach an open Indian alliance with the US.
Walking this fine line between several competing interests and realities — shoring up partners, some of them reluctant, exhorting others to speak up more and trying to mitigate the damage that China has wrought — has been one of the Modi government’s successes so far. (An inquiry into the alleged ‘intelligence failure’ in Ladakh can come later.)
But what is interesting at this particular moment is that a self-proclaimed friend and ally, Japan, is going out of its way to undermine India’s attempt at reducing its China exposure.
Only some months ago, Japan’s PM Shinzo Abe ordered that Japanese companies reduce their own dependencies on China. Of the 87 Japanese companies that are now relocating from China, 57 are returning home, while the remaining 20 are going to South-East Asian nations such as Malaysia, Vietnam and Laos. Not one is coming to India.
Worse, several of Japan’s biggest companies doing great business in India are now pressuring us not to raise import tariffs on intermediate products they source from China. These include big brands such as Suzuki, Sony, Panasonic, and Honda.
Some would say that Abe is not just undercutting his good friend Narendra Modi’s ‘Aatmanirbhar Bharat’ or Make In India campaign, but also turning a blind eye to big Japanese companies who would rather impose a neo-imperialist fatwa on India than train unskilled labour. These Japanese companies insist that China has better skilled labour, and while that may be a fact, it must be pointed out that the Japanese are in India because of the enormous market that surely shores up a substantial portion of Japan’s bottom-line.
Money, cricket and phones
If the Swadeshi Jagran Manch, indeed, succeeds in its anti-China tirade and persuades the government to blacklist Chinese goods – like Vivo, which sponsors IPL – it is clear that the Japanese, along with other foreign companies, will benefit.
That is why it is doubly odd that Tokyo, otherwise so keen on India stiffening the spine of the so-called Quad, refuses to see the strategic picture, but persists with wanting to make a fast buck in the Indian market in the short run.
At the end of the day, it is the amount of money that is the thread that ties all these stories together. Beijing is subtly reverse threatening India not to withdraw from the Chinese market, warning that the pain will be too severe for Indian customers to bear. The Japanese are pressuring India for exceptions because import taxes hurt their profit margins. And BCCI, no doubt shored up by having Home Minister Amit Shah’s son Jay Shah as an office-bearer, is insisting on going ahead with China’s Vivo sponsorship of IPL 2020 — Vivo paid BCCI Rs 2,199 crore in 2017 for a five-year contract and BCCI could lose Rs 440 crore per year now if the exit clauses favour Vivo.
So, what happens to the fight the Swadeshi Jagran Manch has picked with the BCCI and invited the government to play umpire?
With National Security Adviser Ajit Doval summoning the China Study Group to discuss next steps on how to make Beijing behave, it is clear that PM Modi’s big China headache just got bigger this week.
Views are personal.