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India

India can avoid the middle-income trap

India could be one of the few emerging economies to escape the “middle-income trap.” Key factors include a stable democracy, favorable demographics, rapid infrastructure expansion, and sustained willingness to pursue reforms.

By Arvind Panagariya

Gas shortages: India taps coal reserves

To cover the expected summer surge in electricity demand, India is leaning more heavily on coal generation. Shortfalls in gas supplies – driven in part by the Middle East conflict – are forcing the government to subsidize energy companies’ costs.

By Ning Wang

India-China relations have been strained for decades. Disputes over the border, water and economic contradictions are causing tensions. The Table.Media editorial team has all the latest news on the India-China conflict. The Sino-Indian relationship The Sino-Indian relationship is characterized by a great deal of mistrust. There are massive political upheavals between the two countries. A border war has been raging between the neighboring states for decades. There are also disputes over water supply. Geopolitically, the two countries are pursuing different goals and negotiating with other partners. Officially, formal India-China relations have existed since 1950, when India recognized the People's Republic of China as the official representative of the country and ended relations with the Republic of China on Taiwan. Historically, however, Sino-Indian relations date back to the 1st century. On the one hand because of the exchange of goods via the Silk Road, and on the other because Buddhism was passed on from India to China. Do China and India share a border? India shares a border with China in the north. There lies the autonomous region of Tibet, which shares 3,380 kilometers of border with India. However, there have been disputes over the course of the border for decades, which is why there is still no official border demarcation. In the north, i.e. in the border area with China, the Himalayas form a natural border. Bhutan is sandwiched between China and India. The border triangle is also politically highly controversial. For example, China refers to the Indian state of Arunachai Pradesh in eastern Bhutan as South Tibet. India has a total of six direct neighboring countries. Pakistan, China (Tibet), Nepal, Bhutan, Myanmar and Bangladesh. Until 1949, India also shared a border with Afghanistan. Since then, however, Kashmir has been controlled by Pakistan. The Indo-Chinese border war The Indo-Chinese border war broke out on Oct. 20, 1962. It ended on Nov. 21. However, there were no significant border adjustments or an official settlement of the conflict. The conflict broke out again in May 2020. The background to this is the occupation of India by Great Britain in the mid-19th century. At the beginning of the 20th century, Great Britain also placed Tibet under its protectorate because the Europeans were afraid that the territory could be invaded by Russia. The Dalai Lama then fled to Mongolia. In 1914, the Shimla Conference was held between Great Britain, Tibet and China. In it, the so-called McMahon Line was designated as the border between India and China. However, China never ratified the treaty. India became independent from Great Britain in 1947 and the People's Republic of China was founded in 1949. As early as 1950, China invaded Tibet and the Dalai Lama fled again. This time to India. Course of the Indo-Chinese border war On Oct. 20, 1962, Chinese soldiers crossed the McMahon Line, triggering the actual Indo-Chinese border war. Until the ceasefire on Nov. 21, 1962, around 2,000 people lost their lives. The war still has geopolitical repercussions today. China concluded an agreement with Pakistan and still supports the country in its efforts to become a nuclear power. India, in turn, rearmed its army with the help of the Soviet Union. It was not until June 18, 2006 that an agreement was reached between India and China. From then on, an old trade route in the Himalayas was to form the border between the two countries. Since then, however, there have been regular conflicts. In 2013, Chinese soldiers invaded the border region again. In 2016, India had tanks stationed in the region. In June 2020, twenty Indian soldiers died in a battle with Chinese soldiers. China and India: water shortage in the Himalayas The Indo-Chinese relationship is strained by a dispute over drinking water from the Himalayas. India's water supply is dependent on the Brahmaputra. It is one of the longest rivers in the world and flows into the Ganges. It flows through China, India and Bangladesh. Crucially, it has its source in the Chinese territory of the Himalayas. The People's Republic of China itself is struggling with droughts and water shortages. Especially in the north-east of the country. The South-North Water Transfer Project is intended to help. It diverts water from the Himalayas to Beijing, which in turn leads to water shortages in India and Bangladesh. Experts question whether it makes sense, as enormous quantities of water would evaporate during transportation. The construction costs would also lead to very high water prices. China, India and the New Silk Road India is not a partner country of China in the development of the New Silk Road. The Belt and Road Initiative (BRI) is a major infrastructure project of the People's Republic that has been under construction since 2013. The aim is to create new sea and land routes to speed up global trade. It is a prestige project of the Chinese Communist Party. With the exception of Bhutan, all of India's neighboring countries are involved. India is opposed to the project and is looking for alternatives. India has also not signed the Regional Comprehensive Economic Partnership (RCEP). This is a rather superficial free trade agreement in the Asia-Pacific region. It involves China, Japan, South Korea, Australia, New Zealand, Brunei, Indonesia, Cambodia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Although there are tensions and reservations between many of these countries, they wanted to create a counterweight to the Trans-Pacific Partnership (TPP). Consequences of India-China tensions for the EU The economic rise of China and the aggressive expansionist policies of the Chinese Communist Party are bringing India and the European Union closer together. Both are looking for alternatives to trade with the People's Republic. A trade agreement between the EU and India is intended to help. Import duties are to be lowered and infrastructure projects with European participation in India are to be promoted. The fact that India is committed to democracy and would adhere to multilateralism plays a major role in this, explained Green MEP Reinhard Bütikofer. "And this is all the more important as we are now seeing our north-eastern neighbor China going against us in all respects. It is acting as a systemic rival with aggressive behavior," he said, referring to the People's Republic. EU-India connectivity partnership The partnership between the EU and India is therefore also a geopolitical project. The aim is to create a counterweight to the global power China. This is why the EU-India connectivity partnership is currently being developed. Similar to the New Silk Road, this also includes major infrastructure projects. The aim is for Europe to present a more united front and become more visible in India. Currently, eight German infrastructure projects with a total value of EUR 1.7 billion are being implemented in India alone. These include the construction of transformer stations, power lines and a metro line. David McAllister, chair of the EU Parliament's Foreign Affairs Committee, emphasizes that connectivity has a geopolitical role to play. China's geopolitics in the Indian Ocean The presence of Chinese warships in the Indian Ocean is another point of contention between India and the People's Republic. India claims the area between the Horn of Africa on one side and the Andaman Sea on the other, as far as the entrance to the Strait of Malacca. However, important Chinese sea trade routes also run through here. China wants to protect them from piracy. Because China is dependent on oil imports from the Gulf States, the People's Republic has bought or built a large number of ports, which are lined up like a string of pearls along this trade route and are therefore also known as the "String of Pearls". The presence of Chinese warships also worries the USA. Together with India, Japan and Australia, they hold regular naval maneuvers. Tear test for Sino-Indian relations The tensions between China and India mean that both economies are looking for new trading partners. Global projects such as the New Silk Road harbor additional potential for conflict. The trade agreements concluded are a clear geopolitical sign. The Table.Media editorial team reports on how they will develop.