India’s reckless border bravado could prolong its contraction

By Dai Yonghong (Global Times, 9 September 2020) – With its continuous reckless moves to aggravate the border dispute with China, India is facing a disastrous economic consequence amid its losing control of COVID-19. Becoming a coronavirus epicenter of the world, India could see its GDP slump over 30 percent this year, if it bet on opportunism to cause an inflammatory border conflict.

Not only did Indian troops again illegally crossed the Line of Actual Control (LAC), they even fired warning shots at Chinese border patrol troops who came to negotiate, despite the two sides having conformed to an agreement not to use firearms. The reckless move came as India surpassed Brazil to become the country with the second biggest number of novel coronavirus infections.

On Tuesday, rating agency India Ratings and Research revised the country’s GDP contraction forecast in financial year 2021 to 11.8 percent from 5.3 percent earlier, the Hindu reported.

After a steep precipitation of 23.9 percent GDP slump in the quarter of April-June, the estimate for the whole year may seem conservative in light of the wildly spreading virus in India, already slowing down economic growth, not to mention the potentially disastrous consequences the country would see from its further confrontation with China.

China-India border dispute is a conundrum left over from history. After over 40 years of generally peaceful condition, India has recently shown its intent to provoke China. Domestically speaking, New Delhi has been to some extent kidnapped by rising nationalism, and perhaps the leadership is willing to use the border issue to deflect domestic attention from New Delhi’s outright failure to contain the pandemic.

In the meantime, New Delhi may ponder the current international environment as an advantageous one for it to antagonize China in order to gain some bargaining chips. The US, Japan, Australia and India have rolled out strategies or policies trying to enhance cooperation in the Indo-Pacific region and hinder the development of China, which may have contributed to India’s intent to take riskier moves and bet on opportunism.

However, it is obvious that India has chosen the wrong path. Leaving behind the primary and urgent task of containing the virus, it now wants to trigger a conflict with China which it clearly has zero possibility to win.

As a populous country, India has developed into a major emerging economy in Asia and accumulated fair growth momentum in recent years, which, unfortunately, would be entirely gone by a witless and wrong choice by New Delhi.

Unlike other major economies with solid industrial foundation, robust economic structure or abundant capital reserve, Indian economy was very vulnerable. With the risks of a border conflict with China rising, it is inevitable that foreign capital will flee Indian market and eventually leave Modi’s ambitious “Make in India” campaign a pipe dream.

With daily confirmed COVID-19 cases hitting global records, it is highly possible that India will leapfrog the US and become the epicenter of the world in the near future. After months of large-scale lockdown, it is now promoting the gradual reopening of public transportation systems which would further strangle its efforts to prevent the spread of the virus. Against the backdrop of a hopeless COVID-19 situation and its increasingly reckless moves on border, the Indian economy may see a very dim prospect in the coming years.

The author is director of Global Governance and Area Studies, Shenzhen University. [email protected]

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