While the selfie showing Narendra Modi and Li Keqiang smiling at Beijing’s Temple of Heaven was promptly posted on the social media, the Chinese prime minister admitted there were “some disagreements between us” but that India and China agreed that they ought to seek “a fair, reasonable and mutually acceptable solution” to the decades-old boundary problem. Earlier, at a reception at the Great Hall of the People on Friday, the Indian prime minister called upon his hosts to “reconsider” their approach to their bilateral relations, especially to issues “that hold us back from realising the full potential” of their relationship. Notwithstanding this broad admission of the hurdles in the way of a more vibrant economic relationship, the two sides signed 24 documents, including some agreements, worth $22bn providing for cooperation in a variety of fields ranging from collaboration in tourism, aerospace and education to opening one new consulate each. The two countries also agreed to create a body that would increase the volume of trade by focusing on cooperation in the development of infrastructure, pharmaceuticals, agriculture and industry in a bid to address India’s concerns about the imbalance in trade with China.

Also read: China, India sign more than $22 billion in deals: Indian embassy

One reason for the two countries’ failure to realise the full economic potential of their relationship is the Indian establishment’s refusal to go beyond the 1962 border conflict and place greater emphasis on the economy part of their ties. Even though representatives from the two sides continue to hold talks on the border dispute, New Delhi has injected tension into the border region by beginning work on an all-weather strategic road which will end at a point where the borders of India, China and Myanmar meet. China says the mountain road should be built after an agreement is reached and the borders are clearly demarcated. As the Chinese foreign ministry spokesman put it, the road would “complicate” the boundary dispute. Instead, it expects India to build a highway that would raise the economic stakes by going from Kolkata through Bangladesh and India’s eastern states to reach Myanmar, thus creating an economic corridor. India also continues to host the Dalai Lama, a provocation to China. The truth is that the mistrust between the two countries stems from a sense of rivalry over regional influence, especially, much to New Delhi’s annoyance, Beijing’s deepening economic ties with Pakistan, and its resolve to play a greater economic role in Afghanistan. Are China and India’s ambitions colliding?

Published in Dawn, May 17th, 2015

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