From Washington to Tokyo, the world has increasingly looked to India as a potential counterweight to China's rising might. During the past week, however, the world's two most populous countries – which fought a war in 1962 – have taken an unprecedented step toward becoming better friends.
The decision to hold joint Army exercises, ending tomorrow, in China's Yunnan Province, is admittedly a small measure. But it is the first time the two armies have cooperated in such a way, and it comes on the heels of rapidly expanding Sino-Indian ties in business and politics.
No one suggests that India and China are on the verge of an alliance. But experts here also dismiss the notion that India must set itself up as a Chinese adversary. On the contrary, they say, events like this week's exercise show that India and China are slowly improving relations – a trend which is likely to accelerate.
"Many who view China as a long-term threat would like to claim India in an attempt to contain China," says Army Lt. Gen. Satish Nambiar (ret.), head of the United Services Institution, a Delhi think tank. "But that is not in our own interests."
For the past 45 years, Sino-Indian relations have been overshadowed by the 1962 war. China still claims nearly all of the Indian state of Arunachal Pradesh as Chinese territory. Yet this week's Army exercise signifies a growing desire to find common ground.
"This indicates that India's growing military ties with the US will not affect the process of confidence building with China – we can achieve a lot together," says an Indian defense official, who asked that his name be withheld because he was not authorized to speak to the media. "It's time to bury the ghosts of 1962."
Economic ties led to security
This being the first Army exercise between the two countries, it has been small. Only 95 Indian soldiers have traveled to Yunnan Province, where they are participating in counterterrorism drills. But the joint exercise is expected to become an annual event, helping each side become better acquainted with the other.
"These are building blocks being put in place," says Rahul Bedi of Jane's, a London-based military analysis firm. "It's a part of the learning process."
In many ways, the military is only now acknowledging the shift. Chinese Premier Hu Jintao visited New Delhi last year to explore the idea of establishing freer trade with India.
Indeed, more than military exercises or ministerial meetings, it is economics that has recast the relations between India and China. Trade between the two countries surpassed $11.4 billion in 2007 – up from only $250 million in 1991, according to the Federation of Indian Chambers of Commerce and Industry. It grew by half in the first four months of 2007, and forecasts suggest trade could hit $40 billion in the next three years. China could even eclipse the US as India's largest trading partner in the near future, with two-way trade projected to reach $100 billion in the years following 2010.
As evidence of how economics has already suppressed some grievances, China agreed to reopen the strategic Nathu La pass to border trade last year – a move that effectively accepted the state of Sikkim as a part of India.
In closer Sino-Indian ties, Sen He, managing director of Sany Heavy Industry, sees only opportunity. For the past three years, Sany has been exporting machines such as conveyer equipment to Indian firms. After selling more than 700 machines, the company decided to invest $60 million to build a factory near Pune. The operation, scheduled for completion next year, will be the first Chinese-owned major manufacturing plant in India.
"India's economy is booming … and the construction market is flourishing," says Mr. Sen. "There is a big demand for our product."
Meanwhile, major Indian corporations such as Ranbaxy pharmaceuticals and Videocon electronics have opened operations in China.
Cooperation and competition
The business deals are counterpoints to the economic competition likely to grow between the two Asian powers – most notably over natural resources. "There will be more instances of cooperating [than competing]," says Jabin Jacob, an analyst at the Institute of Peace and Conflict Studies, a security think tank in Delhi.
India and China "are beginning to understand they can compete and cooperate at the same time," he adds.
It is a lesson the military is learning, too – yet with a clear sense of caution. Much about China still worries India. China recently invested huge amounts of money in its military. India responded by increasing its efforts to build longer-range missiles. "That is China-centric," says Mr. Bedi of Jane's.
Any attempt to match Chinese spending "would be a disaster," adds General Nambiar. "But we must be able to maintain a capability that is a deterrent to China."
To that end, India is building 72 roads into the remote border area with China and moving more of its airpower to a nearby state – hoping to counter similar and more robust moves by China on the other side of the border. India has also participated in a massive five-nation naval exercise in the Malacca Strait – an exercise that experts say was intended to send a "hands off" message to China.
China's continuing support of Pakistan – and its reported role in helping Pakistan build a nuclear bomb – remains a point of contention, as well. For these reasons, experts say, there is a limit to the possibilities for Sino-Indian military cooperation. But as memories of the 1962 war dissipate, a new openness is emerging. Says Nambiar: "We've come a long way since then."