Chinese Fingers In India’s Business Pie

Chinese Fingers In India's Business Pie

Social media got flooded with anti-China sentiment after 20 soldiers attained martyrdom in Indo-China face-off at Galwan valley. People across India are voicing boycott of Chinese products. Even government entities like BSNL and Railways are reconsidering their tie-ups with Chinese firms. But with the dragon’s investment so deeply penetrated into the Indian economy, is it feasible to cut out China from the Indian Economy?

Crux of the Matter

Even though India has a significant dependence on China, the government has taken immediate action after the clash on the border with China. The Department of Telecommunications asked BSNL to not use Chinese equipment in the up-gradation of its 4G facilities.

Even Indian Railways decided to terminate the contract of the Chinese signaling behemoth China Railway Signal and Communication Corp, which had won the contract in 2016 to install signaling systems in over 400 km in the Eastern Dedicated Railway Freight Corridor. The deal worth ~Rs. 500 crore involved designing, supplying, constructing, testing, and commissioning signaling and telecommunications for the railways.

Let us have a look at some infographics to understand the footprints of Chinese in the Indian market.

  • The Shanghai Stock Exchange is the world’s 4th largest stock market by market capitalization at $4.0 trillion as of November 2018. The exchange started on 26th November 1990.
  • The Art of War is an ancient military treatise from China attributed to the ancient Chinese military strategist Sun Tzu. The Art of War remains the most influential strategy text in East Asian warfare and has influenced military thinking, business tactics, legal strategy, lifestyles, and beyond.
  • Jack Ma, is a business magnate, investor, and politician from China. He is the co-founder and former executive chairman of Alibaba Group. Ma is a global ambassador for Chinese business and is often listed as one of the world’s most powerful people, with Forbes ranking him 21st on its “World’s Most Powerful People” list.

Political Fallout Of Galwan: Past And Present

Galwan Valley

With a past of muddled dealings, the events of Galwan valley in Ladakh between India and China have elicited various reactions from people home and abroad.

Crux of the Matter

Indian Govt Says
Ministers from the Indian Govt expressed views on the recent incident where 20 Indian soldiers were martyred in a clash with the Chinese army.

I would like to assure the nation that the sacrifice of our jawans will not be in vain. India wants peace but it is capable to give a befitting reply if instigated.

Narendra Modi, Prime Minister, India

Pain of losing our brave soldiers while protecting our motherland at Galwan Valley can’t be put in words. Nation salutes our immortal heroes who sacrificed their lives to keep the Indian territory safe.

Amit Shah, Home Minister, India

Our soldiers displayed exemplary courage and valour in the line of duty and sacrificed their lives in the highest traditions of the Indian Army.

Rajnath Singh, Defence Minister, India

Opposition Questions
Sonia Gandhi, the President of Indian National Congress, raised questions regarding the territorial occupation and the soldiers’ casualties to PM Modi.

Congress leader Rahul Gandhi also questioned the PM. In his tweet he asked:

“How dare China kill our UNARMED soldiers? Why were our soldiers sent UNARMED to martyrdom?”

Replying to Rahul Gandhi, the Minister of External Affairs Dr. S Jaishankar clarified how Indian troops are always armed outside posts but observed ceasefire.

India – Who Said What?
Prominent personalities of India expressed different opinions on the issue, with some questioning the government while others expressing contempt at the actions of China.

Our army has changed the political map of the world. I will always salute the valour of the army.

Maoj Kumar Jha, MP, RJD

This is a National Humiliation… [The PM] must speak up.

Manish Tewari, MP, Congress

The time has come to take Aksai Chin back.

Jamyang Tsering, MP, BJP

For every one of ours, kill 5 of theirs.

Captain Amarinder Singh, CM of Punjab, Congress

Foreign Ministries

Sovereignty of the Galwan Valley area has always belonged to China and the Indian border troops seriously violated Chinese border protocols.

Chinese Foreign Ministry

A violent face-off happened as a result of an attempt by the Chinese side to unilaterally change the status quo there.

Indian Foreign Ministry

Earlier History Of Aksai Chin
Aksai Chin is a disputed territory located at the northernmost extreme of Ladakh. It is currently administered by China while India claims it a part of its own. While Ladakh was an independent state before 1834, it was annexed by Dogra Raja Gulab Singh. In 1841, the Tibetan army was defeated and the treaty of Chushul was signed. In 1844-45, Ladakh was lost to British rule after the Anglo-Sikh war.

Changes After 1962 War
In 1954, PM Nehru demanded a clear demarcation of Ladakh. The situation deteriorated in 1957 as a road connecting Aksai Chin to Xinjiang was constructed by China, which had annexed Tibet. In 1962, a war was fought between India and China over the issue of Ladakh, the asylum for Dalai Lama and several other disputes. After the war, Aksai Chin fell under the control of China.

Hindi Chini Bhai-Bhai Or Bye-Bye?

  • 1950s: India went with the slogan of “Hindi Chini Bhai-Bhai” while China sustained its aggression on the borders covertly.
  • 1953: PM Nehru rejected a permanent seat at the UN Security Council and offered it to China instead.
  • Nehru downplayed the Chinese aggression in Ladakh, saying, “There is a large area in eastern and north-eastern Ladakh which is practically uninhabited… where not even a blade of grass grows“.
  • Nehru and the Defence Minister V K Menon publically snubbed General Thimayya as he warned of an imminent Chinese attack. Thimayya eventually resigned in 1959 in protest.
  • The Galwan River is named after Ghulam Rasool Galwan, a Ladakhi explorer of Kashmiri descent, who first explored the course of the river. This is one of the rare instances where a major geographical feature is named after a native explorer.
  • William Johnson, a civil servant with the Survey of India proposed the “Johnson Line” in 1865, which put Aksai Chin in Kashmir. The Line is one of three boundary lines considered by the British Indian government, the other two being the Macartney – MacDonald Line and a line along the Karakoram range.
  • Xinjiang, officially the Xinjiang Uyghur Autonomous Region (XUAR), is an autonomous region of the People’s Republic of China, located in the northwest of the country. It is the largest province-level division of China and the 8th largest country subdivision in the world. China claims that Aksai Chin is part of Xinjiang.

India And China Encircling Each Other

Leaders of India and China

India and China have engaged in strengthening geopolitical ties with other nations in a potential move of forming alliances to encircle each other’s territories.

Crux of the Matter

India’s Ties To Encircle China

  • India and Bangladesh agreed on the construction of a railway line to connect Agartala in Tripura with Akhaura in Bangladesh by 2021 – all the costs would be borne by the Indian government.
  • The two countries also agreed on a deal for waterways to connect Tripura with Daudkandi through the Gomti river from August 2020.
  • In 2017, India provided Bangladesh a credit of $4.5 billion for its 17 key projects.
  • In 2018-19, more than 12 deals were confirmed between the two.


  • 2014: Japan was among the foremost countries visited by PM Modi after winning LS elections.
  • 2015: Both countries agreed on a bullet train project in India using Japanese technology. $12 billion credit would be provided by Japan, with negligible interest rates for repayment.
  • 2016: Both sides agreed on a deal that enables Japan to provide nuclear development facilities to India.
  • 2019: Japan invested ₹13,000 crores in development projects in Northeast India
  • Japan and China have had strained relationships since World War II.
  • In 2020, Japan announced $2.2 billion in aid to companies moving out of China.


  • Bhutan is a protected state of India.
  • In June 2014, the first foreign state visit of PM Modi was to Bhutan.
  • 2017: Both sides agreed to establish free trade between them.
  • 2019: India increased its monthly supply of LPG to Bhutan from 700 Metric Tonnes(MT) to 1,000 MT.


  • Australia reportedly offered India military aid after 1962 Indo-China war.
  • 2016: Agreement was signed to allow uranium exports from Australia to India.
  • June 2020: Both sides agreed to allow each other the access of their military bases.
  • Australia recently called for independent investigation into the origin of Coronavirus, putting China in spotlight for its lack of transparency.
  • China retaliated by increasing tariffs on barley exports from Australia.

China Encircling India

  • China is the largest provider of arms to Pakistan.
  • In 1989, Pakistan supported Chinese govt in its Tiananmen Square Massacre.
  • 2019: China supported Pakistan on Kashmir issue.
  • 2020: Both sides agreed on a deal to build dam worth $5.8 billion in Gilgit-Baltistan lying in Pakistan occupied Kashmir (PoK), for which India expressed disapproval.


  • 2008: Nepalese monarchy fell with alleged aid from the Communist Party of China (CCP).
  • 2019: China to provide Nepal $500 million for development projects.
  • 2020: Several schools in Nepal make Mandarin mandatory.
  • Nepal blamed India for Covid-19 and claimed 3 Indian territories in its map allegedly at the behest of China.


  • 2015: China became the largest trade partner of Bangladesh.
  • 2018: Bangladesh received record amount of Foreign Direct Investment of $3.6 billion, with more than $1 billion coming from China.
  • China’s total investment in Bangladesh was $38 billion as of 2019. It is the largest sum provided to Bangladesh by any country.
  • China is the biggest arms provider to Bangladesh.

China-Sri Lanka

  • Sri Lanka is one of the major countries of the String of Pearls, which is a theory encompassing China’s hold on international ports.
  • 2007: China became the major weapon supplier to Sri Lanka which ended the civil war.
  • China provided loan worth $1.5 billion to Sri Lanka for building the Hambantota port.
  • 2017: China wrote off $1.1 billion loan to lease the port for 99 years.
  • 2020: US bans Lt Gen Shavendra Silva of Sri Lanka for civilian atrocities and alleged pro-China inclinations.
  • The String of Pearls is a geopolitical theory on potential Chinese intentions in the Indian Ocean region (IOR). In theory, a “pearl” refers to a current or potential Chinese overseas military base, mega infrastructure project, economic corridor, port or other city or locale of Chinese geostrategic advantage in the region. The eponymous “string” of these pearls refers to the possibility of the Chinese Navy connecting these pearls via maritime routes.
  • Mongolia is the world’s second-largest landlocked country behind Kazakhstan and the largest landlocked country that does not border a closed sea. In 2002, about 30% of all households in Mongolia lived from breeding livestock. (Mongolia)
  • The Silk Road was a network of trade routes that connected the East and West and was central to the economic, cultural, political, and religious interactions between these regions from the 2nd century BCE to the 18th century. The Silk Road trade played a significant role in the development of the civilizations of China, Korea, Japan, the Indian subcontinent, Iran, Europe, the Horn of Africa and Arabia.

Standoffs At LAC

Standoffs at LAC

After recent standoffs at the Indo-China LAC border, delegates have declared success in initiating peace talks. The incident comes at a time when several countries are tightly observing China for its role in Coronavirus spread as well as its dealings with other nations.

Crux of the Matter

Peace Talks
After recent standoffs at the Line of Actual Control (LAC) between India and China, both sides went into negotiation. In an official statement, the Indian government declared having a successful discussion that would seek to resolve the conflict with peaceful talks.

Both sides agreed to peacefully resolve the situation in the border areas in accordance with various bilateral agreements and keeping in view the agreement between the leaders that peace and tranquility in the India-China border regions is essential for the overall development of bilateral relations.

Ministry of External Affairs, India

What Happened?
Recent weeks saw an increase in standoffs between the 2 countries at the LAC. After a physical confrontation involving fistfight at Sikkim border, several fighter airplanes were spotted near the LAC in Ladakh after which India rushed its army and aircrafts to monitor the situation. Further tension occurred when India enhanced its infrastructure construction near the LAC which drew criticism from China.

Critics have labelled China’s actions as diversion from its actions regarding Coronavirus spread and its interference in Hong Kong and Taiwan.

History of LAC
Even the length of LAC is disputed between the 2 countries. India claims its length as 3,488 km while China claims it to be only 2,000 km long. While minor conflicts keep occurring in the eastern and middle part, the western part is a source of major conflict. After an informal agreement of LAC in 1962 after Sino-India war, agreements were reached in 1993 and 1996 for formal recognition. The blurring of LAC is most prominent in the western side, where the territorial claims overlap while a lack of clear demarcation fuels the conflicts.

Cutting The Lake
The case of the Pangong lake is interesting for the borders as the claimed LAC passes through it. It is divided into 8 areas, called fingers. While India claims that the border passes through finger 8 and patrols till the 4th, China claims the passing of LAC through finger 2 and patrols till the 4th; occasionally it ventures into the 2nd. Recent physical battles occurred in fingers 2 and 5.

Source: India Today

History of LAC Standoffs

  • 2013: 3 week standoff as China built camps in Daulat Beg Oldi inside the Indian border
  • 2014: Standoff as India attempted to build canal in Demchok
  • 2015: Standoff as Indian troops dismantled Chinese watchtower inside the Indian LAC
  • 2017: Doklam standoff for more than 2 months
  • 2020: Unarmed fight at Sikkim border and increased aircraft patrolling at Ladakh LAC

  • A Mexican standoff is a confrontation in which no strategy exists that allows any party to achieve victory. Any party initiating aggression might trigger their own demise. At the same time, the parties are unable to extricate themselves from the situation without suffering a loss. The term Mexican standoff was originally used in the context of using firearms and today still commonly implies a situation in which the parties face some form of threat from the other parties. The term is made popular due to usage of it in Movies and Video games.
  • Pangong Lake is an endorheic lake in the Himalayas situated at a height of about 4,350m. It is 134km long and extends from India to the Tibetan Autonomous Region, China. Approximately 60% of the length of the lake lies within the Tibetan Autonomous Region. The lake is in the process of being identified under the Ramsar Convention as a wetland of international importance. This will be the first trans-boundary wetland in South Asia under the convention.
  • A bargaining impasse occurs when the two sides negotiating an agreement are unable to reach an agreement and become deadlocked. Some theorists contend that impasses are used by negotiating parties in situations of imperfect information as a method of signaling to the other side the seriousness of their position. An impasse is a type of standoff.

India’s Infra Development On LAC Spooks China

As India maintained its stance on infrastructure development on the Line of Actual Control (LAC), China displayed aggressive reaction which is a culmination of stand-off continuing since several weeks.

Crux of the Matter

India Ramps Up Development
India and China have been engaged in a stand-off for several weeks. However, India has maintained a strong stance of keeping the Army established near the borders and has continued its development project along the borders. Indian Army has maintained emphasis on “peaceful talks” but has rejected the possibility of revising the plans of construction on the Indian side of LAC.

The project is a part of the plan of the Indian government to develop strong infrastructure on its borders to facilitate rapid action in case of invasion/intrusion.

China To Prepare For War?
On Tuesday, Chinese President Xi Jinping ordered his army to prepare for “worst-case scenarios”. Without taking India’s name directly, Jinping directed his army to prepare for situations where they may be forced to defend “national sovereignty”.

All Indian activities are entirely on the Indian side of the LAC. In fact, it is the Chinese side that has recently undertaken activity hindering India’s normal patrolling patterns. The Indian side has always taken a very responsible approach towards border management.

Ministry Of External Affairs, India

China In World Spotlight

Consequently, several analysts have pointed to China’s actions on Indian border as attempts to divert attention from its role in Coronavirus spread as well as hostilities in Taiwan and Hong Kong.

  • The McMahon Line is the demarcation line between the Tibetan region of China and the North-east region of India proposed by British colonial administrator Henry McMahon at the 1914 Simla Convention signed between British and Tibetan representatives. It is currently an effective boundary between China and India.
  • Chinese scholars claim that the Chinese Prime Minister Zhou Enlai first used the phrase ‘Line of Actual Control’ in a letter addressed to Indian Prime Minister Jawaharlal Nehru dated 24 October 1959.
  • The slogan of “Hindi Chini Bhai Bhai” was used to declare brotherhood between India and the People’s Republic of China between 1954—1962, under the “Five Principles of Peaceful Coexistence” or called the “Pancha Shila” agreement.