There’s a Chinese proverb that says, “To get rich, one must build roads.” China takes this saying very seriously, especially in its western borders, around the Line of Actual Control (LAC) with India. China has almost completed the construction of a bridge near Pangong Lake. Satellite imagery expert Damien Symon (whos goes with the X username – _Detresfa) recently published the latest photos, indicating that the bridge connecting the north and south banks of Pangong Lake will soon be ready for use.
This bridge is being built in the Khurnak area of Ladakh, at the narrowest part of the lake, linking the northern and southern parts of Ladakh. This will make it easier for Chinese troops to reach the southern bank, like Rezang La, with their tanks, where the Indian Army had outmaneuvered them in 2020. By cutting the 180 km loop through Rutog County in Tibet, this bridge will also help Chinese troops bring heavy war-fighting equipment to the northern bank’s finger areas of Pangong Tso.
China’s aggressive infrastructure and telecommunication buildup around the LAC and its surrounding areas have been ongoing for many years. Following the clash between Indian and Chinese soldiers in Galwan in 2020, China has carried out numerous constructions to increase its army’s proximity around Galwan. China’s defense budget is approximately $235 billion and a significant portion of China’s defense budget is allocated to developing infrastructure around the border.
If we talk about India’s defense budget, India announced its budget for FY 24-25 on Tuesday, July 23. India’s allocated 12.9% of its total budget to the defense, highest among all the other ministries. Last year the budget allocated to defense was 5.92 lakh crore rupees, and this year it has been increased to 6.21 lakh crore rupees ($75 billion aprox). The Border Road Organisation (BRO) has been allocated 6,500 crore rupees, almost 30% up from last year. This allocation will be used to develop the Nyoma Airfield at an altitude of approximately 13,700 feet in Ladakh, the strategically important 4.1 km Shinku La Tunnel in Himachal Pradesh, the Nechipu Tunnel in Arunachal Pradesh, and several other projects.
The MoD will spend around 1.72 lakh crore rupees on modernization. 75% of this mordernization budget approximately 1.05 lakh crore rupees designated for procurement through domestic industries. Similarly, China allocates a substantial portion of its $235 billion defense budget to modernization. Therefore, the question arises whether this defense budget of will help control China’s aggressive buildup near the LAC?
Enemies at the Border, Friends in Trade!
While India is engaging in border conflicts with China and spending on heavy arms, ammunition and deployment along the LAC, there is also talk of boosting business partnerships with China. This isn’t just speculation; the government’s economic survey advocates for it. Despite efforts to reduce imports and exports with China after the 2020 Galwan clash, the economic survey suggests increasing investment from Chinese companies to boost exports amid a rapidly growing trade deficit with China. The survey states that as the US and Europe are reducing their dependency on China, it would be more effective if Chinese companies invested in India and then we export products to the markets rather than importing from neighboring countries.
The survey emphasizes that an increase in Foreign Direct Investment (FDI) inflow from China could enhance India’s participation in the global supply chain and boost exports. According to a report, this year’s FDI inflow in the country is the lowest in 16 years. To increase FDI inflow, the economic survey suggests that bringing Chinese component manufacturers (especially electronics) to India could result in domestic value addition.
On one hand, India is inviting China to set up manufacturing units in the country, while on the other hand, China is becoming increasingly aggressive at the border. Recently, Indian billionaire Mukesh Ambani’s Reliance Retail Ventures finalized a deal with China’s fast fashion brand Shein. Under this deal, Reliance will launch Shein in India, competing with India’s Tata Group’s affordable fashion brand Zudio, so the chinese company will compete with an Indian Brand.
It is natural to question whether trading with China will help resolve the ongoing strategic escalations between India and China. How is trading with China helping or going to help in this context? If India cannot ignore China and if we are such a significant business market for China, why can’t we control China’s continuous aggression at the border?
