1

AnAnal
ysi
sofDokl
am’
sInfl
uenceonIndi
aandChi
na’
sEconomi
c
Rel
ati
onshi
p
 2
Abst
ract

Sincethe1978Chineseeconomi cr eformswer eimplemented,tr

adebet weenIndiaand
China has soar
ed.Howev er
,par all
elt othe incr
easing economici nter
dependence
betweentheeconomi es,t
hereexistedapol i
ti
calanddiplomaticrel
ati
onshipmar kedby
tensi
onsandconfli
cts,thel
atestofwhi chistheDoklam cri
sisof2017.

Thispaperanal yseshow t het rader elati

onshi
pbetweent hesetwoAsi angiantshas
beenaf f
ectedbyt heDokl am cr
isis.Theai m oft
hispaperistoshowthattheIndi
a-Chi
na
tr
ader el
ationshi
pi sindependentofmi li
tar
yandpolit
icalconfl
i
ctsandtot hisend,we
haveanal ysedtheeconomi ceffectsofnotonl yDoklam butothermajorconfli
ctsas
well
.Ther esul
tsestabli
shedandev aluatedhel
panaly zeandpredi
ctthefutureofthe
bi
later
altraderelati
onship.
 3

Tabl
eofCont
ent
s
Abst
ract
……………………………………………………………………………………………2

Rev
iewofLi
ter
atur
e…………………………………………………………………………….
..
.4

Met
hodol
ogy
…………………………………………………………………………………….
..
.4

I
ntr
oduct
ion……………………………………………………………………………………….
.5

AHi
stor
ical
Precedent
…………………………………………………………………………….
5

Ef
fectofDokl
am cr
isi
sonbi
l
ater
alt
rade……………………………………………………….
..
.6

Concl
usi
on:
TheWay
………………………………………….…………………………….
…..
7

Ref
erences……………………………………………………………………………………….
..
8
 4

Rev
iewofLi
ter
atur
e
“IndiaandChi na:Conf l
ictandCooper ation”byDav idM.MaloneandRohanMukher jee
Thisr eportanalyzest hehistoryofSi no-I
ndianbor derconf
li
ctsandhowt herelati
onsof
thet wonat i
onswi tht heextraneousnat i
onsf uell
edtheconfl
ict
s.I
tgiv
esat hor ough
i
nsi ghtintothephasesofI ndia-Chinar elati
onshipsanditsimpactonthef oreignpol i
cy
ofbot ht henationswi t
heachot heraswel laswi t
hothernati
ons.I
talsopr esentsa
deeperi nsi
ghtintot henegot iationsbet weent henat i
onsundertherei
gnofdi ff
erent
l
eader s.Thepaperenl i
st sthepossi blef actorswhichareresponsi
blefortheSi no-
I
ndi ant ensions.Itisani mpor tantpi eceofwor kforthi
sstudytobeconduct edont he
basi soft hehistoryofsuchconf li
cts.

“Chi
na-
Indi
a: An anal
ysi
s of t
he Hi
mal
ayan Ter
ri
tor
ial Di
sput
e” by
CommodoreKather
ineRi
char
ds

Thi spapergi vesa deep i nsi

ghti ntot he Indian-Chinese bor dercr i
sis.Ithel pst o
under st
andt hestrategicimportanceofBhut an( Dokl am plateau)andTi bettobot hIndia
andChi naandhowt heseareasar ebothat hr
eatandanadv antaget otheser egi
onal l
y
giantnat i
ons.I tanal y
sest heimpactofSi no-Pakist anrel at
ionsonSi no-
Indiabor der
crisi
s.Further,itanalysesthefactorwhi chcoul dbei mpet usinnegot i
atingandf inding
anappr opriatesoluti
ont othebordercri
si s.
Itexami neswhet hereconomi cinter
dependencet hr ought radecoul dhelpt oeaset he
tensionsint heSi no‐Indianrelat
ionshi
pandi nturncont r i
butet obreakingt hebor der
stalemate.Thepaperpr ovestobeani mpor tantsour cefori tanalysesthehistoryaswel l
i
tsi mpactonv ari
ousaspect softheIndia-Chinabor dercr i
sis.

Met
hodol
ogy

Fort hisresearchr epor

t,anumberofsour ceswer eanalyzedandusedt ogetabet ter
under standingoft heissueathandandgi veahol ist
icr ev
iew oft
het rader el
ati
ons
betweenChi naandI ndi
a,inthepastandint hepresent,especi
all
yduri
ngandaf t
erthe
Doklam st and-off
.
Wer elyonquant i
tati
veaswellasquali
tat
ivemethodst oproveourhypothesis.However,
wer elypr i
marilyonstati
sti
calev
idencetosupportourfindi
ngs.
 5

I
ntr
oduct
ion
I
ndia and Chi na hav e,f ora l ong t i
me,had a v eryt umultuous and compl icated
rel
ati
onship.Thebor derandt errit
orialissuesar ealway spresent,althoughsomet i
mes
i
nt hebackgr ound,asaconst antr emi nderoft heconf l
ictbetweent hetwonat ions, even
whent hetwocount r
iest akest epsf orwar dtopur suet heircommongoal sandi nterests.
This contradictor
y nat ure oft he r elati
onshi pi s of t
en remar ked upon as bei ng
“competiti
on-cooperation-conflict.
”Thi sr esear chpaperai mst ogiv eani nsighti nto
I
ndiaandChi na’srel
ations, parti
cularlyregar di
ngt radeandhowt radeisaf f
ectedbyt he
borderdisputes.Thest udywi l
lemphasi zeupont heDokl am issueasi tisar ecentone
thathasonceagai nbr oughtt hebor derdi sputest ot heforeground,remi ndi
ngci t
izens
andthewor l
d, t
hatwhi letrademaybef louri
shing, theunder l
yi
ngconf l
ictsarey ettobe
resol
ved.

Theear li
ermodusv ivendi-modeofl ivi
ngort heagr eementf or
medt ohav epeacef ul
relati
ons-bet ween thet wo nationswasout l
ined in 1979 and t hen impl emented
offici
allyin 1988 witht he asserti
on thatt erri
torialdi sput eswoul d notactasan
i
mpedi mentt otheeconomi candi nsti
tutionalinterdependenceoft het wocount ri
es.
Howev er,post1990s,wi t
hgl obali
zati
onf l
ourishingandt hingsget ti
ngi ncreasi
ngl y
compl icatedast hetwocount r
iesracet owar dsgr owt h,theoper ati
onalmet hodsand
objectivesoft hetwocount r
ieshav echangedsi gni f
icantly.Addi ti
onall
y,especi al
lyin
India,thepolit
icalparti
esincont rolhaveal sochanged.TheDokl am stand-of f
,which
occur redin2017,onat hi
rdnat i
on,Bhut an’sterri
tory ,raisedanumberofquest i
ons,
especi all
yonechallengingthei mplement edmodusv i
v endiof1988andt hushow t he
territ
orialdi
sputescanbedeal twithinor dertot akest epsf orwardt owardseconomi c
growt handt r
adewi t
houtanysi gnif
icanthindrance.

AHi
stor
ical
Precedent:Oper
ati
onShakt
i

Ananal ysisofhowtheDokl am crisismightaff

ecttradeandeconomi crelat
ionsbetweenIndia
andChi nawoul dbei ncompletewi thoutconsider
ingahi st
ori
calprecedent.Here,theauthor
shallbet aki
ngthecaseofPokhr an-IIorthe1998Nucl earTestsbyIndia.Thereasonf ornot
takingabor derconfli
ctasapr ecedenti sthatal lmajorborderconfl
ictsbetweent hetwo
nationst ookplace before 1990,at ime per
iod during whi
ch China and Indi
a didn’
thav e
signif
icanttr
adeandinv est
mentr elati
ons.

Pokhr
an-II
,alsoknownasOper
ati
onShakt
i,presentedthemostseri
ouschal
l
engef orSi
no-
I
ndian cooperat
ion.I
fonewer
etolookatt hest ati
sti
cs,bi
l
ater
altr
adebetween thet
wo
 6
count
ri
essuffer
edaconsi
der
abl
eamountofset
back,
consi
deri
ngthatt
hegr
owt
hrat
efel
lfr
om
anaverageof78%dur
ingt
hepastdecadet
omer
ely3.
4%in1998.

Onfurtherenqui
ry,onereal
i
sesthatt
heseemingl
ysimplesit
uat
ionisindeedver
ycomplex.I
n
fact
,thegrowthr
at eoft
radebet
weentheset
woAsi angi
antshadal
readystart
edfal
l
ingf
rom

78%i ntheear
ly1990sby30%pery eardur
ingthemid-1990sandf ur
ther
,fellto5.2%i n1997.
China’
sexport
sf el
landtradedecli
nednotjustwit
hIndi
abutwi thi
tsothermaj ortr
adepar t
ners
suchasJapan, SouthKoreaandPaki st
anaswell,asAsiafacedamajorfinancialcri
sis,
known
astheEastAsianfinanci
alcri
sisof1997.

Ont heotherhand,in1998, I
ndia’
sshar eofChi na’
si nt
ernat
ionaltr
adei ncreasedfrom 0.56%to
0.59%.After
wards,itroset o0.9%i n2003and1. 1%i n2004,consideringt hefactthatChina’
s
overal
lexport
sfell
f r
om 9%t oonl y0.5%andi mport
sf el
lby1.6%.Toquot eSwar anSingh,an
eminentacademician,“whenseeni nt helargercontextofChina’
snegat i
vegr owthratesinthei
r
annualtr
adewi t
hAsi a,eventhelowposi tiv
egr owthinSino-
Indianbil
ateraltradein1998was
seentobodev erywel l
forSino-
Indiant i
es”.

Moreover,I
ndiasignedagreementswor
th$8mi l
li
onand$1.9mill
ionwithChinai
n1998and
1999respectiv
ely.Undeniabl
y,t
herewer
estrongpolemicsandagr eatdealofskept
icism,
l
eadingtothecancel l
ati
onofChinaCommodi t
yFairandChina’
snearabsenceduringIndia
I
nter
nationalTradeFair
,butsuchmoveswerehighl
ysymboli
cinnature.

Wecansaf el
yconcludethatOperati
onShaktiandallthepoli
ti
calrhet
ori
csur r
oundi
ngithad
moreorl essnoef f
ectonI ndia-
Chinabil
ateralt
rade.I
nf act
,traderelat
ionsfaci
l
itat
edin
undoi
ngthedamagedonet ot hebil
ater
alr
elati
onsbyPokhran-I
Iandtri
ggeri
ngfurt
herpoli
ti
cal
anddi
plomatici
nter
acti
ons.

Ef
fectofDokl
am Cr
isi
sonbi
lat
eralt
rade

Theauthorsconsi
derediti
mportanttoanalyset
heeffectofDokl
am crisi
sonbi lat
eraltr
adeas
i
ntheaftermathofeverymajorconfl
ictbet
weenthesetwocountri
es,speculat
ionsoft r
adewar
andeconomi crel
ati
onsgetti
nghitabound.However,asthediscussi
onpr oceeds,itbecomes
evi
dentthatChi
naandI ndi
ashareamat ur
eeconomicrel
ati
onshi
pwhi chisindependentofany
ki
ndofpolit
ical
anddiplomati
cconfl
ict.

I
ndia-Chinat rader eached$84.44bill
ionin2017,accor dingtothelat
estdat a.Thisi sthehighest
thattradebet weent hetwocount ri
eshasev erreached.Thev olumeofbi l
ateraltradet ouched
$80bnf orthef irstti
me.Thi sismuchhi gherthant he$71. 18bnbi l
ateraltrader egist
eredl ast
year.
.Thef i
gur essoundal lthemor eastoundingduet othefactthatI ndi
aandChi nahada
majorconf rontat i
onatDokl am.Unf ort
unatel
y,Doklam wasn' ttheonlyconf rontationt heyhad.
I
ndiaandChi nawer eatloggerheadswitheachot herov eranumberofi ssuesl i
keCPECcor ri
dor,
Chinabl ockingI ndia'
sef f
ortstobringaboutaUNbanonJai sh-e-
Mohammadl eaderMasood
AzharandI ndia'sent r
yintotheNuclearSuppli
ersGr oup( NSG)beingblockedbyChi na.

Indi
a'sexpor
tstoChi
naincr
easedby39.11percenttoreach$16. 34bil
lionlastyearwhereas
I
ndia'
simportsfr
om Chi
naincr
easedby14.59percentt o$68.10bi l
li
on.Consequently,I
ndia
hasemer gedasthesevent
hlargestexpor
tdest
inati
onforChi nesepr oducts,andthe24t h
l
argestexpor
tert
oChina.Whatisevenmor ef
ascinat
ingisthatIndianexpor tstoChinahad
 7
beendecl
i
ningf
oraf
ewy
ear
sandpost
-Dokl
am per
iodsawar
ever
sal
oft
hist
rend.

Di
amondsal
ongwithcopper
,ir
onor
e,or
gani
cchemi
cal
sandcot
tony
arncont
ri
but
edt
othe
i
ncr
easeI
ndi
anexpor
tstoChi
na.

Thought hel argerpi ctur

ei si nconsonancewi thourhy pothesi
s,therear eaf ew excepti
ons
whichar eimpor t
antt onote.Indiaputrestr
icti
onsont hei mportofaf ewChi nesegoods.Many
oftheser estricti
onscanbeseeni ntheDokl am context.Indust
riest hathav ebeenhitwi t
h
rest
rict
ionsi ncl udet emperedgl assandt yr
esi ndustr
y,againstwhicht heIndianadminist
rati
on
hasputant i
-dumpi ngduty,mai nl
ytoprotectIndiandomest i
cindustryandsmal l
scal
eindustri
es.
Apartf rom t hat,I ndi
ai ntr
oduced tough qual it
yst andards and mandat ed certi
fi
cati
on of
compl i
ancef orf i
rmsi ntoyandpowerequi pmenti ndustri
es.Asar esult,importsfr
om Chinain
thelatt
ert wocat egor i
eshasfal l
enbynearly50per cent.

Despit
et heexcepti
ons,thef
oll
owingprophecybyaChineseoffi
cialhasprovedtobetrue-
“The
l
ong-standi
ngeconomi candcultur
alti
est hatI
ndi
aandChinashar ewillnotbehit
.Bot hIndi
a
andChi naenjoylongcooperat
ionasourl andsar
econnected”,newsagencyI ANSquot edLi
Rongrong,Second Secretar
yint he Economicand Commer ci
alCounsel l
or’
sOf f
ice ofthe
Chi
neseEmbassyi nIndi
a.

Concl
usi
on:TheWayFor
war
d
Ther esultsofthestudypointtoamat uri
ngrelat
ionshipbet weent hewor ld’
stwof astest
growingeconomi es.Howev er,ther
eshoul dbenor oom f orcompl acency.From what
worldhi stor
yteachesus, weknowt hatanykindofmi l
itaryconfli
ctisnoti ntheinterest
ofanycount r
y.Therefor
e,theneedoft hehourisreali
singt hatour‘st
rategicpart
ner shi
p’
couldhel pusbot handwoul dhel pAsi atoemer geast hecor eofwor l
deconomy .This
dream of‘ I
ndia-
ChinaMi ll
ennium ofExcept ionalSy nergies’thatourPr i
meMi nister
envisions,howev er
,needshar dwordonpar tofbot ht henat ionsandt hebestwayt o
mov ef orwardisthepathofincreasingt r
adeandi nvestment .
 8

Ref
erences
Si
ngh,S.( 2004)
.China-
Indi
a Bi
l
ater
alTr
ade:
.St
rong Fundament
als,Br
ightFut
ure,
Jour
nal
s.openedi
ti
on.
org.

TheTi
mesofI
ndi
a.(2018)
.Indi
a-Chi
nabi
l
ater
alt
radehi
tshi
stor
ichi
ghof$84.
44bi
l
li
on
i
n2017-Ti
mesofI
ndia.

Z.,Zhu.(2011)
.Chi
na-I
ndi
aRel
ati
onsi
nthe21stCent
ury
:A Cr
it
icalI
nqui
ry.I
ndi
an
Journal
ofAsianAf
fai
rs.

Malone,D.and Mukher
jee,R.(
2010) I
ndi
a and Chi
na:Conf
li
ct and
Cooper
ati
on.

Jash,A.(2017)Doklam Standof
f:A TestofResol
vebet
weenChi
naandI
ndi
a,
I
ndraSt
raGlobalVol
.003,
IssueNo: 09

TheHi
ndu(2017)HasI
ndi
aki
ckedof
fat
radewarwi
thChi
na?Her
ear
e5si
gns.-
TheHi
ndu

C.
,Ri
char
ds.(
2015)
.Chi
na-
Indi
a:Ananal
ysi
soft
heHi
mal
ayanTer
ri
tor
ial
Disput
e.
9