July 07, 2020

The first fatal clash along the Sino-Indian border in decades occurred June 15, slimming chances for resolution of long-standing territorial disputes between the two nuclear-armed neighbors. The incident may likely trigger a prolonged military standoff with economic, geopolitical, and security impacts in the coming months.

India-China Border Conflict – A Decades-long Dispute

With no map delineation or group demarcation, the approximately 3400-kilometer land border between India and China has been deeply contested. After the 1962 India-China war, the two countries have since been able to avoid conflict through a series of agreements establishing diplomatic channels to settle border disputes and bar the use of force, especially in a unilateral manner. Notably, a 1996 agreement includes confidence-building measures, such as a limit on number of forces and armaments in the vicinity of the Line of Actual Control (LAC) – the defacto border - and a ban on use of firearms within 2 km (1.2 miles) of the LAC.

However, border negotiations have been challenging due to fundamental differences in perceptions of the land boundary. Moreover, Chinese officials claim the line has shifted from the proposed Macartney-Macdonald line in 1959, then to a post-war status quo boundary in 1962, and in June 2020 to a currently unpublished line that Chinese representatives have described as comprising the June 15 border clash site of Galwan Valley.


Territories along the LAC are considered to offer strategic advantage, especially of height and access to domestic supply lines, in case of a Sino-Indian war. The nations are also wary of foreign influence in sensitive border regions such as the Tibet Autonomous Region under Chinese administration, as well as Sikkim and Arunachal Pradesh states in India. Both Indian and Chinese authorities have thus continuously built infrastructure in areas they claim, though China has done so to a larger extent and at a faster pace. However, India – under the nationalist Bharatiya Janata Party (BJP) since 2014 – has focused on border reinforcements like the Darbuk-Shyok-Daulat Beg Oldie (DBDSO) road. Such buildup is increasingly closer to the LAC, prompting further tensions.


De-escalation Attempts Fail; Border Conflict Continues

Since early May, reports indicated occasional skirmishes between Indian and Chinese troops due to an increased presence of Chinese troops and structures in the disputed Pangong Tso lake area.


The Pangong Tso Lake lies near the heavily disputed Finger 4 area of the LAC; Indian authorities have demanded the Chinese side withdraw new obstructions to Indian army patrols in contested regions to restore normalcy in relations.


Such encounters are not unusual due to the undermarketed nature of the LAC; India reported 1025 transgressions by the Chinese People’s Liberation Army 2016-2018. A de-escalation agreement, which required both sides to move back from their positions, was reached after bilateral high-level talks on June 6. However, Indian authorities claim the Chinese failed to honor the agreement, and attacked an Indian patrol troop that went to inspect if structures at the Galwan Valley were removed late June 15. The clash – allegedly involving crude weapons such as batons and clubs - resulted in 20 Indian fatalities. China admitted to casualties on their side but has refused to divulge details, arguing that any disclosure may provoke public sentiments.

Despite officials holding meetings June 22 for more than 12 hours that ended in mutual agreement to implement de-escalation, the ground situation has not improved significantly as of June 30. Satellite imagery from Maxer and PlanetLab show that though the Chinese structure at Galwan Valley was found destroyed June 16, other Chinese and Indian structures have proliferated along multiple points of the LAC, such as the Daulat Beg Oldie, Depsang Plains, Hot Springs, and Kongka La.


Domestic and Border Security Outlook

The clash that caused the first fatalities in an India-China conflict since 1975, evoked strong anti-China sentiments among the Indian public. Social campaigns to boycott Chinese goods and services are ongoing. Anti-China protests are also taking place in various regions, such as Delhi, Uttar Pradesh, and Gujarat; Chinese businesses and diplomatic facilities are popular demonstration sites for such events. Some retailers of Chinese goods have precautionarily covered brand signages due to the threat of arson and vandalism. Small demonstrations with sporadic violence will likely continue in the coming weeks.

The overall stability of the border situation remains moderate but has deteriorated due to the latest incident, prompting Indian authorities to allow the use of firearms along the LAC in exceptional circumstances. Chances of conventional military conflict remain low. However, troop deployment and the frequency of skirmishes at the LAC will likely increase through 2020, with possible standoffs like the 2017 Doklam incident. Retired Indian Army Colonel Dinny Sasidharan, who served as the commander for Pangong Tso in 2017, notes that the invariable increase in contact between hostile troops working under harsh conditions in the LAC region may worsen the mercurial nature of the escalation matrix in the medium term. Officials may also periodically increase security measures in border regions that provide access roads to the LAC.


India-China Dispute Raises Concern for Business Operations

In addition to public sentiment against Chinese products in India, various state infrastructure project tenders awarded to Chinese companies are undergoing official reviews. Despite the absence of published orders, business owners are also reporting that Chinese shipments – especially in the electronics and pharmaceutical sector - are being subject to extensive scrutiny at Indian ports and airports instead of fast-track clearance. Moreover, the Indian government, during a June 24 meeting, mandated e-commerce companies to include country of origin in product labels, in line with offline retail businesses. Retailers have opposed the immediate enforcement of the rule, fearing the move will particularly affect sales of Chinese products amid public calls for their boycott in India. As of June 30, the Indian Ministry for Home Affairs has also banned 59 Chinese mobile applications for alleged security breaches.

Shipment and delivery delays are possible in the medium term for operations dependent on Chinese imports. Government measures to control Chinese imports such as heightened security checks, increased duties, as well as capacity limits, are possible. Additionally, hindrances to the participation of Chinese firms in large state projects are probable in the coming months.


Diplomatic Repercussions

Pangong Tso Lake

Both India and China have accused each other of initiating the June 15 clash through territorial incursions. While China maintains it is open to boundary negotiations, India has clarified that the on-ground implementation of de-escalation agreements and return to status quo ante are immediate priorities. The Indian ambassador to China, Vikas Misri - in a strongly worded interview June 24– said the resolution of ongoing security and diplomatic tensions was “entirely the responsibility” of China, whose claims on the hitherto undisputed Galwan Valley he termed “exaggerated” and “completely untenable.” India will also likely widen and expedite strategic partnerships with countries such as the US, Japan, and Australia to counter the apparent revisionist policies of China – which will further deepen the trust deficit between India and China. Although economic and diplomatic ties will not see serious deteriorations, security-related tensions will likely be elevated for the long-term.


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