He explained that the post-Ladakh years brought stability but not normalisation. Both sides managed to avoid further escalation and settled into a stalemate on the Himalayan frontier, but the relationship could not return to the status quo. It was the Kazan Summit last year that provided the turning point, as both sides anticipated shifts in geopolitics following the Ukraine war and US repositioning.
Singh argued that material realities have pushed India and China to set aside past resistance. “You’ve got economic interdependence with China that you want to rebalance and expand. You need to diversify your export markets, which are in jeopardy with the uncompetitiveness that could come in certain commodities you export to the United States,” he said.For now, Singh sees India and China managing their frictions while cooperating in trade, supply chains and multilateral forums like BRICS. He added that India faces greater pressure than China because it has far less offshored production to bring back, even as it seeks to grow its domestic capacity.
According to Singh, the broader context is the end of the liberal globalisation phase. “If there was any doubt that this new liberal phase of globalisation, of a borderless trading system, I think that’s completely been upended in the last few months,” he said, pointing out that US tariffs are aimed at every major economy, including India.Below is the excerpt of the interview.
Q: How do you see the statement from China? Is this a significant change from the past, with the Chinese saying that we stand by India in this hour of crisis?
Singh: If there was any doubt that this new liberal phase of globalisation, of a borderless trading system, I think that’s completely been upended in the last few months. The writing was on the wall even before Trump came to office. What we’re really seeing is a complete turning of the tables. The global South, even though China’s economy is, of course, infinitely larger and much more expansive than India’s, now certainly sees a commonality of interest. What we are seeing from the United States — the targeting of tariffs intended to bring back production capacities to the US — is aimed at every major economy. Ironically, India is the one that has the least amount offshored anyway. If anything, we are trying to bring back production and play a bigger role in the supply chain. So, I think the pressure on India is more severe, and the pushback that India needs to do now — from restructuring its economic model to, in fact, resetting its entire foreign policy — is immense. Just look at the reset with India-China relations. This would not have happened at the pace and with the gusto that it has if it weren’t for this major shock to India’s geo-economic posture with the global economy.
Q: But, many would say that this reset in ties between India and China really began in October last year on the sidelines of the Kazan Summit, when Prime Minister Modi and President Trump reached the Kazan consensus. Would you say that what we are seeing in terms of the warmth in ties is more of a long-term shift, or is it a current adjustment to the geopolitical times?
Singh: There are two facets to this. After the Ladakh crisis, both sides spent several years calming down what could have been an even bigger escalation — a breakout of all-out war in the Himalayas. They had contained that and reached a level of armed coexistence and stalemate on the Himalayan frontiers. Where they had stumbled was how to re-normalise the relationship, given that the border cannot go back to what it used to be. The military situation has changed. So, what happened last year was that both sides engaged. Why did Kazan happen? Because there was an anticipation that changes in geopolitics were underway. The Ukraine war, of course, was a big one in the last few years. I think both sides were expecting the United States to re-engage and reset its terms of engagement with the rest of the world. From India’s perspective, it was finding that its bargaining terms across the board were deteriorating. So, the decision was taken, but it was sort of kept warm, and now the file has been picked up and the reset has happened. The basic consensus and points were already in place. What we are now seeing is that any kind of hardline resistance from both establishments has been set aside because of hard material realities. You’ve got economic interdependence with China that you want to rebalance and expand. You need to diversify your export markets, which are in jeopardy with the uncompetitiveness that could come in certain commodities you export to the United States. So, there is a clear commonality now. Whether you want to call it long-term or not, certainly for the period of the Trump administration, which has several years to go, you are going to see these two Himalayan giants come to an understanding where they will manage their friction and collaborate on the economy and even in the multilateral sphere, particularly in BRICS.
Watch accompanying video for entire conversation.
