Global Economics

India Is Courting China's Rivals, Too


General Secretary of the Communist Party of Vietnam Nguyen Phu Trong receives a gift during his visit to the Mahatama Gandhi memorial in New Delhi, on Nov. 20

Photograph by Prakash Singh/AFP via Getty Images

General Secretary of the Communist Party of Vietnam Nguyen Phu Trong receives a gift during his visit to the Mahatama Gandhi memorial in New Delhi, on Nov. 20

As China squabbles with the Philippines, Vietnam, and other Southeast Asian nations over disputed islands in the South China Sea, Japan isn’t the only regional rival looking to capitalize on distrust of China in Asia. India is trying to take advantage of opportunities, too. Like Japan, India has disputes of its own with China. India has a long border with China, which claims the Indian state of Arunachal Pradesh, as South Tibet. And like Japan, India is looking for friends that could potentially come in handy if tensions build with China.

So, just as Japanese Prime Minister Shinzo Abe has focused much of his diplomatic efforts during his first year in office traveling to Southeast Asia, India’s leaders are trying to build ties with other Asian countries that have reason to be wary of the Chinese. That helps explain why the head of Vietnam’s Communist Party is the Indian Prime Minister’s guest in New Delhi. Yesterday, as part of the visit by Nguyen Phu Trong, general secretary of the Communist Party of Vietnam, the two countries announced a series of deals to boost economic ties. Among the agreements is a plan for India’s Tata Power to build a $1.8 billion coal-fired power plant in Vietnam and Indian energy company ONGC Videsh to explore for oil and gas off the Vietnamese coast.

The energy deal is particularly significant. It’s Vietnam’s latest offer to India to explore off its coast and once again puts India in the midst of a territorial dispute. China and Vietnam have conflicting claims on islands in the South China Sea (known in Vietnam as the East Sea), and the two countries have a history of awarding oil-and-gas exploration concessions that overlap.

No doubt with the China threat in mind, the Indian and Vietnamese leaders emphasized yesterday the importance of maritime security. As reported by Vietnam’s news agency, “they agreed that freedom of navigation in the East Sea should not be impeded and called the parties concerned to exercise restraint, avoid threat or use of force and resolve disputes through peaceful means in accordance with universally recognized principles of international law, including the United Nations Convention on the Law of the Sea (UNCLOS).”

The China threat and how it responds will likely become a bigger issue in India. At the end of the month, Japanese Emperor Akihito will make the first visit by a Japanese monarch to India, a message to China that two of its biggest regional rivals are getting closer to one another. By next spring, India will have elections—and Hindu opposition leader Narendra Modi is already trying to make an issue of what he calls Singh’s timid China policy.

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Einhorn is Asia regional editor in Bloomberg Businessweek’s Hong Kong bureau. Follow him on Twitter @BruceEinhorn.

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