One mountain, two tigers: an emerging Sino-Indian trade-security dilemma

Abstract

Barring a brief period of postcolonial amity in the 1950s, the Sino-Indian relationship has largely been characterised by mutual suspicion and conflict. Diplomatic relations remained thin and economic interactions negligible. However since 2003, Beijing and New Delhi have forged a substantive trading relationship generating considerable optimism about resolving past disputes. Today, despite maintaining one of the largest ‘South-South’ trade relationships in the world, considerable asymmetries in bilateral trade have been exposed, adding a new source of friction to a long list of unresolved historical disputes. This thesis explores how growing Sino-Indian economic interdependence has shaped the past two decades of rapprochement. Using trade expectations theory and a systematic analysis of contemporary Indian political discourse, I demonstrate how the positive expectations of future trade that initially supported Sino-Indian rapprochement have now faded. This has manifested in increased bilateral tension over the past five years, in particular over Beijing’s Belt Road Initiative, a dynamic that appears to conform to Copeland’s trade-security dilemma.