India, China, and the United States: A Delicate Balance

As India and China enjoy tremendous economic growth, each country is vying to increase its role on the world stage. The United States will play a critical part in the emergence of these two major powers in Asia. As President Bush heads to India, provides a brief look at the relationships between the three countries.

February 27, 2006

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President George Bush travels to India March 1 for the first time in his presidency, highlighting the increasingly important role New Delhi is playing in world affairs. Many analysts see a stronger U.S. relationship with India as part of a longer-term effort to check China’s influence in Asia. India’s leaders have dismissed suggestions their country should be part of any U.S. containment strategy toward China and have cited the importance of booming economic ties with China. But officials in both New Delhi and Washington have stressed what they term is a "natural" partnership based on their traditions as large, multiethnic democracies.

What’s India’s current relationship with China?

Experts say both India and China are pursuing their foreign policy goals more assertively as each country tries to position itself as the major political and economic force in Asia. "It’s the start of the realignment of the balance of power in Asia," says Anupam Srivastava, executive director of the South Asia program at the University of Georgia’s Center for International Trade and Security. Others say New Delhi is not quite sure how to deal with Beijing. "The Indians don’t know what they want with China," says Sumit Ganguly, the Rabindranath Tagore professor of Indian cultures and civilizations at the University of Indiana, Bloomington. "On one hand, they see China as a major strategic threat," while at the same time a growing economic relationship is bringing the two countries into increasingly closer contact, he says. That economic growth has kept the bilateral relationship, with its potential for conflict, generally positive thus far. "There’s a sense right now that they’re both rising, and it’s not a zero-sum game yet," says Adam Segal, the Maurice R. Greenberg senior fellow for China studies at the Council on Foreign Relations. "Right now it’s still win-win."

What are the major elements of the relationship between India and China?

  • Energy. India and China are two of the largest, fastest-growing energy consumers in the world. India imports some 75 percent of its oil needs, while China imports about 33 percent of its oil. Their combined demand has helped drive oil prices to record highs, prompting both nations to try to lock down sources of energy around the world. China’s quest for energy has prompted it to strike deals with countries from Africa—it has agreements with Sudan, Nigeria, Angola, and other nations—to Myanmar, Tibet, and Russia. India is also seeking oil in Russia, Kazakhstan, and Sudan, among other nations. In January, China and India agreed to a landmark energy cooperation deal that would prevent them from bidding against each other for energy resources. "The two countries realized that by very aggressively bidding for the same resources, they were pushing prices up for both of them," Srivastava says. "It’s a lot cheaper for them to divide resources and cooperate." Both countries are also exploring alternate energy sources, a factor behind the nuclear deal India is negotiating with the United States.
  • Trade. Bilateral trade between India and China has gone from $332 million in 1992 to $13.6 billion in 2005, according to a paper by Srivastava published in the fall 2005 issue of the Indian Journal of Economics and Business. Trade between the two nations has grown at over 30 percent per year since 1999. India accounts for nearly 80 percent of South Asian economic activity and is a critical gateway to the region’s economy. The two countries are increasing their economic cooperation, particularly in areas like technology. "There’s this idea that India does software and China does hardware, and the two of them together could make a new Asian market," Segal says. But some experts say India is worried it will be forced into the role of supplier of minerals and low value-added goods to China, unless it can leverage its expertise in services and higher value-added manufacturing into the bilateral trade relationship.
  • Borders. The two nations have a longstanding territorial dispute in the Himalayas that led to a border war in 1962. Negotiations over the 2,000-mile border are ongoing. Among the areas of contention, India says China is illegally occupying Indian territory in the disputed region of Kashmir. China has claimed the rights to land in the northeast Indian state of Arunachal Pradesh.
  • Security. At the time of India’s 1998 nuclear test, Indian officials said they needed nuclear weapons to deter China, an assertion that raised hackles in Beijing. "There are suspicions on the military side, but both leaders have kept it in check," Segal says. India is wary of China’s longstanding relationship with its rival Pakistan, including Chinese assistance for Pakistan’s nuclear weapons program and China’s role in a project to upgrade a Pakistani deep-sea port at Gwadar. "The nuclear threat from China and Pakistan is combined, since China has built up Pakistan’s nuclear and conventional capabilities," Ganguly says. China has also expanded its security ties with other nations around India, including Myanmar and Bangladesh. But "a direct military conflict doesn’t serve either country’s interest," Srivastava says, so Bejiing and New Delhi are compartmentalizing their differences so they can move forward on other issues. The two countries are now planning to conduct their first-ever joint naval exercises.

What’s India’s relationship with the United States?

President George Bush said in a February 22 speech that U.S. relations with India have "never been better," and praised India’s commitment to secular government and religious pluralism, saying they made the nation "a natural partner for the United States." Many experts say the United States and India have worked for the last several years to build a close, cooperative alliance. Robert Blackwill, a former U.S. ambassador to India, said at a Council meeting February 23 that while there is not likely to be a formal U.S.-India alliance, the bilateral cooperation between the two nations will continue to increase. Srivastava agrees. "There’s a very close partnership between the United States and India," he says, one that spans a range of issues, including counterterrorism, joint protection of critical sea lanes, and close cooperation on security investigations.

What’s China’s role in the India-U.S. relationship?

Some experts say India is seeking a closer relationship with the United States both to improve its regional standing and to bolster its security position against China and Pakistan. Ganguly says India suffers from "status anxiety" in relation to its northern neighbor, and is "constantly peering over the Himalayas at China, trying to catch up." China began its economic reforms nearly a decade before India did and its per capita income is now nearly three times India’s, he says. Beijing also enjoys greater world standing—including UN Security Council membership and a prominent role as a political power broker in situations like the North Korean nuclear issue—which some in India covet, experts say.

How will improved U.S.-India ties affect the U.S. relationship with China?

While U.S.-China relations have also shown steady improvement, there is a strong awareness from the U.S. side of China as an emerging competitor for everything from international markets to energy resources to military primacy. Some experts suspect the United States is cultivating a closer relationship with India to contain China, a factor they suspect is behind the recent nuclear deal. But some say this would be a mistake. "There’s no better way to empty a drawing room of Indian strategists in New Delhi than to start talking about this idea," Blackwill said. Indian officials have "no interest whatsoever in trying to contain China because they believe this could be a self-fulfilling prophesy, and their whole policy is to seek the best possible relationship with China and to try to shape their policy to that end," he says. "Neither India nor the United States is interested in any kind of containment of China," Srivastava agrees. Still, he says, Chinese officials still harbor suspicions about U.S.-Indian intentions.


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