The U.S. is currently India’s main trade and economic partner, but for all the importance of India-U.S. relations for New Delhi, they are not serene. There are many issues related to the relative insularity of the Indian economy that have been raised since the Obama and Trump administrations, and they remain on the agenda of the Biden administration. India also has its own grievances against the United States in the area of trade and investment, and in some areas important to India, New Delhi prefers to work with the European Union rather than the United States.
On the other hand, trade between India and China is growing rapidly, as is Chinese investment in India. Of course, the volume of India’s economic ties with the PRC is less than with the United States, but in general we can say that they are quite comparable. According to India’s Ministry of Commerce and Industry, “Bilateral trade between the U.S. and India will be $119.42 billion in 2021-2022, up from $86.4 billion in 2020-2021.”
Another advantage for Beijing is the fact that, unlike Washington, it does not use unwarranted unilateral political and economic sanctions as leverage.
A complete resolution of the India-China border disputes seems unlikely in the foreseeable future. However, one cannot rule out the possibility of reducing tensions and implementing a whole set of military confidence-building measures. If this were to happen, the current incentives for further deepening of India-China relations would launch processes of reunification of the Eurasian continent, reduce tensions in the region, etc. But these processes would only benefit Asian states. On the contrary, the U.S. would sharply reduce its role as an external arbiter and balancer in Asian affairs, and even remain out of touch in this part of the world.
The Americans are no longer able to replace China as the main economic actor in South and Southeast Asia, nor are they able to reverse the expansion of Chinese military and technical cooperation with many countries in the region. Therefore, India has been designated as the PRC’s instrument of containment. At the same time, the White House wants to destroy the already difficult relations between Delhi and Beijing as cheaply as possible, without spending as much as possible.
Numerous Indian experts directly point out that the current U.S. strategy toward India does not include any workable alternatives to India-China economic cooperation. The U.S. does not offer any programs to modernize the Indian economy. And for this strategy to work, and for India to minimize its economic demands, Washington is artificially provoking tensions between the two countries in every way possible. Specifically, it makes no secret of the anti-Chinese orientation of the QUAD format, tries to draw New Delhi into interaction with AUKUS, NATO, etc.
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