The border clash soured public sentiment in India toward Chinese brands, leading to calls to boycott Chinese businesses. The bilateral relationship is currently skewed in China’s favor in areas of trade, investment and technology, data showed.
New Delhi has introduced measures in recent months that either sidelined or banned Chinese companies from one of the world’s largest consumer markets. They included restricting Chinese investments into India even before the border face-off occurred.
India also recently banned several dozen Chinese apps including the highly popular short video-sharing app, TikTok. Existing contracts with Chinese vendors were also canceled and there were reports suggesting Chinese telecom companies Huawei and ZTE might eventually be excluded from India’s 5G development.
In most of those decisions, India did not specifically name China but, rather, justified the moves on national security grounds, according to a note from consultancy Eurasia Group.
“We’re not enemies, but I think there’s always a problem about being friends,” Narayanan said. “There is a competition between the two civilizations.”
Narayanan explained that India needs to focus on managing its economic relationship with China rather than shutting it down completely.
He referred to India’s refusal last year to be part of the Regional Comprehensive Economic Partnership, which would form a major trading bloc involving Asia’s top economies, including China, and cover nearly a third of the world’s GDP. Some saw India’s presence in RCEP as a counterbalance to China.
“We left the field practically open for China,” he said. “I think India cannot afford to step back. India needs to be in the economic arena, the economic space. I think India’s drive in recent years has been such that I think we can fulfill that objective.”
Analysts have said that recent tensions between the two neighbors could potentially push India to establish closer ties with the United States and countries like Japan and Australia.