Only stable LAC can normalise India’s ties with China, says Jaishankar

‘We need peace, tranquility’

Jaishankar also linked expansion of trade and investment ties between the two countries to peace and tranquillity along the border.

“The point we make to the Chinese is: 'If you want a normal relationship, if the rest of the relationship is to move, it's common sense – It is a no-brainer that the boundary has to be stable and that we need peace and tranquillity in the border areas'," he said.

‘India-China ties moving towards normalcy’

Addressing the Bloomberg New Economy Forum on Tuesday (October 13) evening, Jaishankar noted that the situation along the LAC has "settled down" to a great extent since 2024 and that the relationship is "commensurately moving towards normalcy."

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In the last few months, both sides have rolled out a series of confidence-building measures to repair ties frayed by the more than four-and-a-half-year military standoff in eastern Ladakh. The face-off ended in late 2024.

Will LAC issue affect trade ties?

To a question on whether India would allow more Chinese investment in the country in case there was an "early harvest" agreement on the boundary question, Jaishankar broadly said that various possibilities are being looked at.

"We are now looking at those possibilities, and we have to see where we go. But we are not insisting that you have to solve the boundary issue in order to do business." "What we are saying is: the bar is lower. The bar is: maintain peace and tranquillity. I wouldn't link the early harvest to anything other than the boundary question resolution. Anything we do on any policy we have on business, market access issues will be dealt with separately."

Concerns over economic issues

Jaishankar also spoke about “major economic issues with China,” stating that India is not getting a level playing field in China in regard to trade.

“We also have very major economic issues with China. If you look today at the trade balance, it is completely tilted (towards China)," he said.

"The tilt is extremely one-sided, and in many sectors where we have done well with the rest of the world, we have not had market access; we have not had a successful business operation for that sector in China," he said.

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"We do believe today that we're not getting a level playing field in China in the manner in which we have given a level playing field to them," he noted.

‘Ties will have consequences if peace is disturbed’

Jaishankar also referred to the Galwan valley clashes of 2020 and explained how it brought the ties under severe strain.

"From 1975 till 2020, a good 45 years, no blood was shed on that border. The last time there were fatalities was in 1975. In this period, India-China relations did grow," he said.

"Then in 2020, when we were in the midst of the Covid lockdown, we had a series of border issues, and it culminated in a clash in which a number of soldiers were killed on either side," he said.

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"For us, what it represented was a very profound departure from the situation that was prevailing since 1975. If the peace and tranquility in the border areas are disturbed, then the relationship will have consequences," he said.

Jaishankar said those consequences were very visible in the next few years until peace and tranquility were restored.

(With inputs from agencies)