Relations between India and China have been fairly stable at the strategic level. Economic relations are much better now than these have been in the past and bilateral trade has crossed US$ 60 billion even though the balance of trade is skewed in China’s favour. The two countries have been cooperating in international fora like WTO talks and climate change negotiations. There has been limited cooperation in energy security. However, at the tactical level, China has lately been exhibiting a markedly aggressive political, diplomatic and military posture.

The major cause for instability is the half-century old territorial and boundary dispute over which the two countries fought a border war in 1962. China continues to be in physical occupation of large areas of Indian territory in Jammu and Kashmir (J&K). On the Aksai Chin plateau in Ladakh, China is in possession of approximately 38,000 square kilometres of territory since the mid-1950s. In addition, Pakistan illegally ceded 5,180 sq km of Indian territory to China in1963 inthe Shaksgam Valley of Pakistan Occupied Kashmir under a bilateral boundary agreement that India does not recognise. China continues to stake its claim to about 96,000 sq km of Indian territory in the eastern state of Arunachal Pradesh, which it calls Southern Tibet, particularly the Tawang tract.

Chinese interlocutors have repeatedly claimed that the Tawang tract is part of Tibet and that the merger of this area with Tibet is non-negotiable. In 2005, India and China had agreed on “guiding principles and parameters” for a political solution to the territorial dispute. One important parameter was that “settled populations will not be disturbed”. In the case of Tawang the Chinese have gone back on this. If such errant behavior continues, India will find it difficult to accept Chinese assurances of peaceful resolution of the territorial dispute at face value.

The Line of Actual Control (LAC) between India and China is yet to be physically demarcated on the ground and delineated on military maps. In fact, despite the Border Peace and Tranquility Agreement (BPTA) signed with the Chinese in 1993 and the agreement on Confidence Building Measures in the Military Field signed in 1996, border guards of the People’s Liberation Army (PLA) have transgressed the LAC repeatedly to intrude into Arunachal Pradesh and Ladakh. They have even objected to Indian road construction efforts and the presence of Indian graziers at their traditional grazing grounds.

Patrol face-offs are commonplace and usually end with both the sides warning each other to go back to their own territory. While no such incident has resulted in a violent clash so far, the probability of such an occurrence is high. Demarcation of the LAC without prejudice to each other’s position on the territorial dispute would be an excellent confidence building measure but little progress has been made in 14 rounds of talks between the two special representatives. Under the circumstances, China’s intransigence in exchanging maps showing the alignment of the LAC in the western and the eastern sectors is difficult to understand.

The military gap between Indian and China is growing steadily as the PLA is modernising at a rapid pace due to the double-digit annual growth in the Chinese defence budget while India’s military modernisation plans continue to remain mired in red tape. China’s negotiating strategy is to stall resolution of the dispute till the Chinese are in a much stronger position in terms of comprehensive national strength so that they can then dictate terms.

During any future conflict with either China or Pakistan, India will have to contend with a two-front situation as both China and Pakistan may be expected to collude militarily with the other – a situation for which the Indian armed forces are not prepared. Hence, it is in India’s interest to strive for the early resolution of the territorial dispute with China so that India has only one major military adversary to contend with. Meanwhile, instability in the security relationship has the potential to act as a spoiler and will ultimately determine whether the two Asian giants will clash or cooperate for mutual gains.