Why Modi’s Success Depends on China
(The World Post/Huffington Post) The crushing victory of the Bharatiya Janata Party and India’s newly elected Prime Minister Narendra Modi has brought much hope to exasperated Indians and foreigners alike. With promises to revive a nation that 1.2 billion people call home, the so-called “Modi wave” has surged across India. Over the past few months, Indian equities have risen close to 20 percent. The rupee, which lost 13 percent against the dollar in 2013, has been one of the best performing emerging market currencies this year.
Modi, a three time chief minister of the state of Gujarat, has made much of his rise from a train station chaiwallah (tea seller) to a sarkar (government official). But if Modi is going to have as much impact on India’s economy as his premiership march to Lutyens’ Delhi has had on market sentiment, then he has to make peace with the dragons — China.
For many years, China and India have tried to tango. It’s a dance both countries have been trying to master, albeit awkwardly. When one tries to lead, often, the other fails to follow.
Economic cooperation between the two Asian giants is still hindered by unresolved disputes. India and China have yet to agree on sovereignty over an area along the shared eastern Himalayan border that India calls Arunachal Pradesh and China refers to as South Tibet. The dispute led to a brief war in 1962 and a three week standoff last May.
“Arunachal Pradesh is an integral part of India and will always remain so. No power can snatch it from us,” Modi declared during an election rally this year. He urged China to shed its expansionist attitude and forge bilateral ties with India for peace and progress.
This is one side of Modi; the staunch, security-minded, Hindu nationalist who won voters with his “less government more governance” mantra. The other Modi is the economic-minded technocrat who knows the value of tapping into China’s economic muscle.