Editorial 1: An India-China reset needs bold and new thinking

Context

Cynical practitioners of ‘realpolitik’ who argue that idealism has no place in diplomacy, should not be allowed to hijack the India-China discourse.

 

Introduction

The hallmark of mature leaders is to resolve disputes peacefully and not let them escalate into conflicts. Even when a historically inherited dispute triggers a conflict, they make every effort to ensure that it is diffused through dialogue and does not balloon into a bigger conflict. On this test of maturity, Prime Minister Narendra Modi and China’s President Xi Jinping have fared admirably. The military standoff between the two countries, triggered by the violent confrontation in the Galwan Valley in June 2020, has ended because of the political authority they lent to a disengagement agreement that was reached after a series of patient talks between the military and diplomatic teams of the two countries.

 

Shun hostility, pursue cooperation

• Strategic Determination: Will they make a strategic determination to move India-China relations uninterruptedly in the direction of comprehensive and mutually beneficial cooperation?
• Mutual Distrust: Or will they allow the accumulated deposit of mutual distrust to drag the ties in the opposite direction of minimal cooperation and increased rivalry?
• Military Clashes: Pursuit of the second option surely has the danger of sparking future military clashes, especially since the inherited boundary dispute is still not settled.
• Line of Actual Control: Any new clash, small or big, will wreck peace and tranquillity along the Line of Actual Control, which is a precondition for bilateral cooperation to flourish.
• Geopolitical Turbulence: At a time when the world has entered an era of growing geopolitical turbulence and uncertainty, India-China hostility will add to the load of global woes.
• Mutual Gains: On the other hand, cooperation will not only bring immense mutual gains but also make the world a better and safer place.
• Strategic Choice: This is the strategic choice Mr. Modi and Mr. Xi will have to make.
• Bold thinking: Making the right choice requires bold new thinking in New Delhi and Beijing.
• Honest Effort: This is not possible unless both make an honest effort to remove mutual apprehension that one is acting against the other’s core interests.

 

China's Actions for Trust Building

• National security: China must demonstrably convince India that it poses no threat to its national security, now or in the future — on its own or in alliance with its “all-weather friend” Pakistan.
• Pakistan-sponsored terrorism: Beijing’s equivocation to condemn Pakistan-sponsored terrorism in Kashmirand elsewhere in India has made common Indians view China as an unfriendly nation.
• Contain India’s rise: China must not act in a manner that makes India suspect that it seeks to contain India’s risein Asia and on the global scene.
• UN Security Council: As evidence, it should forcefully advocate the inclusion of India, now the world’s most populous nation, as a permanent member of the United Nations Security Council.
• Equal pole: Beijing must respect India as an equal pole in a multipolar Asia and a multipolar world, knowing that India will never accept a subordinate position vis-à-vis any country in the world, including China.

 

India's Actions for Trust Building

• Power asymmetry: India must not be guided by the misleading notion of “power asymmetry” between the two countries, and, hence, join hands with the United States to augment its own strength (through confrontational initiatives such as the Quad) in dealing with the “China threat”.
• Quad: The Quad (India, Japan, Australia, and the U.S.) has made China think that New Delhi has joined Washington’s “Contain China” strategy.
• One China Policy: India must not deviate from its “One China” policy by appearing to support Taiwan’s independence or to play the “Tibet” card.
• Anti-China sentiment: It does not behove a great and independent nation such as India to allow the West’s anti-China narratives to shape the Indian media’s and academia’s — hence our people’s — thinking about its neighbour.
• Indian media: In this writer’s frequent visits to China, he has seen far less anti-India feelings among Chinesepeople than is the case vice versa.
• Indian TV Channels: This is because Indian TV channels and newspapers (with some exceptions) indulge in constant anti-China propaganda. India’s ruling party and the government do nothing to stop this.
• Chinese media: The Chinese media, even though it is controlled by the communist party, rarely does so.

 

The Historical and Civilizational Context

• Civilization history: There is nothing in the millennia-old history of the two civilisations that predestines Indiaand China to become adversaries and rivals, much less enemies.
• Higher ideals: Rather, the profound wisdom of their civilisations requires the world’s two most populous nations in the world to serve certain higher ideals of humanity — peace, inclusive global development that prioritises eradication of poverty everywhere, democratic global governance, saving the planet from the climate crisis, and cultural-spiritual rejuvenation of the entire human race.
• Realpolitik: We should not allow cynical practitioners of “realpolitik” on both sides, who argue that idealism has no place in the conduct of diplomacy, to hijack the India-China discourse.

 

Trust-building ideas

• Second and third largest economies: Now is the time for the world’s second largest and soon-to-be third largest economies to become partners in domestic development.
• Opportunities for China: With the U.S. under Trump 2.0 threatening to hike tariffs on Chinese imports, India’s large and fast-expanding market offers a growth opportunity to China’s slowing economy.
• Opportunities for India: Similarly, China, with its formidable strengths in infrastructure modernisation, green energy, electric vehicles, and several other breakthrough technologies, provides greater opportunities than any other country for the realisation of India’s aspiration to become a ‘Viksit Bharat’ (developed nation).

 

Global South Cooperation

• India and China as Global South Countries: India and China are Global South countries.
• Helping other developing countries: As such, their cooperation can greatly help other developing countries and, especially, underdeveloped countries in Asia, Africa, and Latin America.
• Convergence in foreign policies: If India and China enhance convergence in their foreign policies, they can bring greater stability, predictability, and fairness to global governance, which is now becoming increasingly ineffectual.
• Ending gobal conflicts: For example, should not the two countries work together to end the Russia-Ukraine war and for peace in West Asia?
• Peace in Myanmar: And why not, closer home, in strife-torn areas of Myanmar?

 

Addressing Common Challenges

• Youth employment and mobility: Be it Myanmar or India’s own disturbed State of Manipur, a common problem is the lack of opportunities for employment and upward mobility for the youth.
• BCIM corridor: Hence, the Bangladesh-China-India-Myanmar (BCIM) Corridor, languishing on paper for nearly two decades, can bring prosperity to India’s north-eastern States, besides adding strength to India’s Act East policy.
• High-hanging fruits: All these trust-building ideas are what can be called high-hanging fruits. A lot of time, hard work, and careful nurturing is needed before they can be harvested.
• Low-hanging fruits: There are, however, five low-hanging fruits ready for picking.

 

Five Low-Hanging Fruits

• Direct flights: First, direct flights, suspended after the outbreak of COVID-19, must be restarted.
• Issuing Visas: Second, the Indian government should begin issuing visas to Chinese businesspeople, engineers, technicians, and also to scholars and tourists eager to visit India. Last year, China issued visas to over 2,00,000 Indians; in contrast, India issued less than 10,000 visas to Chinese nationals.
• Reversing journalist exits: Third, New Delhi and Beijing should reverse their decisions that led to the exit of Chinese journalists from India and Indian journalists from China.
• Ban on Chinese apps: Fourth, the Indian government had banned dozens of Chinese apps, including WeChat, in the wake of the Galwan Valley clash. The ban should be lifted.
• Trade and investment: Fifth, the two countries should quickly make big moves on trade and investment. China can easily reduce the huge deficit in the bilateral trade by importing more from India.

 

Conclusion

As rightly suggested by India’s Chief Economic Adviser V. Anantha Nageswaran, another way to manage this trade imbalance is by getting more foreign direct investment from China. Today, almost every big Indian business house is hungry for joint ventures, technology tie-ups and third-country export collaborations with Chinese companies. Let 2025 be a breakthrough year for India-China cooperation. A telling demonstration of this could be an official visit by Mr. Xi to India or Mr. Modi’s visit to China early next year.

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Editorial 2: Myth of meritocracy, caste-based disparities in IT sector

Context

An empirical test of the inclusivity-promoting image of IT, by analysing NSSO surveys, shows the reality.

 

Introduction

India’s IT sector is one of the fastest growing industries in the country, contributing over 7% to India’s GDP, so much so that the sub-Saharan African countries look to follow its lessons to replicate India’s success in software exports. The performance-driven and high-paying nature of jobs in the IT sector make it a preferred career destination for millions of Indian youth. The job market in this industry is often touted as the epitome of skill-based meritocracy and inclusivity, with the social backgrounds of candidates playing no role in their hiring.

 

What NSSO data show

• An empirical test of the inclusivity-promoting image of IT reveals a different reality.
• Analysis by the writers of this article based on household surveys by the National Sample Survey Office (NSSO)unravels stark caste-based disparities in employment probabilities and wage earnings in the IT industry, indicating that social inequalities are significantly alive in the job market.

 

Study Methodology

• The study utilises two rounds of NSSO surveys:
  • NSS 78th (2020-21)
  • NSS 68th rounds (2011-12)
• These rounds are representative at the national level.
• The study’s sample comprises 29,289 individuals:
  • 20,437 drawn from the NSS 78th round
  • 8,852 from the 68th round for India.
• The variation in the selected sample size from the two periods is due to the variation in the overall sample covered under these surveys.
• The employment probabilities were estimated after controlling for observable factors that could influence the outcome variable.
• Industries that are dominated by the public sector were used as the benchmark in the probability estimation.

 

Key Findings

• The probability of Scheduled Castes (SC) and Scheduled Tribes (ST) to be engaged in the IT sector is only 10%in comparison to upper castes (27%).
• The finding remains robust even after accounting for differences in educational attainment and other individual characteristics such as gender and regional background (rural and urban).
• Surprisingly, this disparity in employment probabilities has increased over time from 2011-12 to 2020-21, though both caste groups were at a relatively disadvantaged position in the first time period than the later period.
  • In 2011-12, lower caste groups faced only 6% probability of being engaged in the IT sector as compared to 17% for upper castes.
  • Thus, while the overall employment probabilities for engagement in the IT sector increased for both caste groups, the deficit of lower castes went up from 11% in 2011-12 to 17% in 2020-21.
• This suggests that as the IT sector grows, it fails to address or even acknowledge the social barriers that exclude marginalised groups.

 

Wage Disparities in the IT Sector

• The study also reveals that even when lower caste groups manage to enter the IT job market, they face labour segmentation as reflected in caste-based disparities in wage earnings.
• SC and Other Backward Classes (OBC) workers in the IT sector face negative wage differentials of 24.9% and 22.5%, respectively, as compared to upper caste workers, even after accounting for differences in educational attainment and type of employment (regular versus temporary).

 

Labour Market Segmentation Theory

• These findings align with the labour market segmentation theory, which predicts a division of the labour marketinto dualistic segments (lower and upper labour segments), with workers in the lower segment facing structural barriers in upward mobility.
• The findings indicate that lower castes are relegated to the lower segments of the job market, facing limited returns to private investments in education and skills.

 

Gender inequality

• The labour market disparities in IT also affect other vulnerable sections, especially women.
• Female workers in IT earn 26.2% lower than males, irrespective of their caste, though their employment probabilities are closer to that of men.
• Labour market segmentation, particularly in a high-growth and high-paying sector such as IT, has far-reaching socio-economic implications.
• By systematically excluding a significant portion of the population, the industry not only sacrifices economic efficiency but also undermines social justice.

 

Diversity and Its Impact

• Diversity in the workplace is widely seen as an important source of comparative advantage.
• According to a report by the International Labour Organization in 2022, higher levels of diversity at the workplace are associated with greater productivity and innovations.
• The Network for Business Sustainability (in Canada) reported that each 1% increase in racial diversity in upper and lower management is associated with a yearly firm productivity gain between $729 and $1,590 per worker.
• Yet, the Indian IT sector’s reluctance to embrace true diversity risks stifling its potential for sustainable growth.
• Further, it discourages the marginalised sections from investing in skill development, trapping them in a vicious circle of poverty.

 

Conclusion: The policy steps needed

Several policy steps are needed to address these inequalities. First, all companies should be required to publicly disclose their workforce diversity matrix, and make it public on their website. Such transparency can encourage accountability and motivate employers to prioritise diversity, without imposing specific quotas. Second, lower-caste entrepreneurs should be provided with greater incentives and training for entrepreneurship in high productivity sectors to boost their economic participation. Finally, bridging the skill gap among the marginalised sections can pave the way for a more equitable and inclusive job market.

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