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Indian-Chinese officials talking trade, partnerships
Cooperation » Indian Prime Minister Modi looking to extend “bilateral relations.”
First Published Jun 09 2014 10:22 am • Last Updated Jun 09 2014 10:22 am

New Delhi • India’s new prime minister, Narendra Modi, continued his strong focus on foreign policy in his first weeks in office, meeting Monday with China’s foreign minister for talks aimed at reviving trade and building an economic partnership.

Both India and China have dismissed the idea that past tensions, particularly over a border dispute, should hold the Asian giants back from cooperating economically.

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The Indian foreign ministry said the two sides shared "an understanding that respect for the sensitivities and aspirations of each other was an essential for expansion of bilateral relations."

India’s relations with China have long been lukewarm, amid worries about Beijing’s growing power as well as the decades-old dispute over their shared 4,000-mile Himalayan border that triggered a brief war in 1962. During the election campaign, Modi said India did not want a war with China but would be prepared to deal with what he called Beijing’s possible expansionist designs.

But after leading his party to a landslide victory on economic promises, Modi surprised many in India by immediately reaching out to neighboring Asian countries including traditional archrival Pakistan.

The first foreign phone call he took was from Chinese Prime Minister Li Keqiang, signaling China and India could be ready for more robust relations. This week’s visit by Chinese Foreign Minister Wang Yi is the second high-level conversation between India and China in two weeks, which shows "the keenness with which both our leaderships are engaging with each other," India’s foreign ministry said in a statement.

In his meeting with Wang on Monday, Modi "emphasized the potential for greater cooperation between India and China for a strong and prosperous Asia, working for mutually beneficial trade and investment as economic partners," the prime minister’s office said in a statement.

Wang also met for three hours on Sunday with his Indian counterpart, Sushma Swaraj. The ministry said those talks included "a fairly long discussion on economic issues."

Modi is no stranger to China, having visited the country four times during his 12 years as chief minister of the west Indian state of Gujarat.

Given China’s dominance in the global economy, Modi’s government is likely be looking for Beijing’s help in reviving India’s stalled economy, analysts said. Trade between China and India has also stalled, falling to $65 billion last year with China enjoying a $48 billion surplus.

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China has said it was willing to help India through economic reforms — echoing promises by U.S. presidents Barack Obama and George W. Bush.

China’s overture shows the country is feeling confident that it "has the wherewithal to help another large country to become economically strong," said T.C.A. Rangachari, a former Indian diplomat and China scholar who served as ambassador to China in the 1970s.

"This is primarily an economic gesture, but it is not devoid of political significance," Rangachari said. "Both sides are seeing an advantage in working together."

Bringing in foreign investors to set up factories is crucial for Modi, who promised voters he could create the jobs needed for some 13 million youths entering the labor market every year.

China’s success in manufacturing, which makes up 31 percent of its economy, may contain lessons for helping India boost the sector’s share of its GDP from 15 percent.

From high-speed trains to solar panels, China could also help India upgrade its crumbling infrastructure.

"There’s an enormous hunger for investment in India, and there’s China sitting on a hunk of cash," Rangachari said. Given the trade deficit between the countries, "having China invest more might be a perfect solution."

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