By Ranjit Devraj
NEW DELHI, Jun 23 2003 (IPS)

The world’s two most populous countries, India and China, plan to resolve long-standing disputes over their 3,500-kilometre long border by reviving a centuries-old trade that was halted abruptly by a brief but bloody war in 1962.

On Monday, the two countries signed a memorandum of understanding to revive border trade but steered clear of outstanding issues that may not be resolved during Indian Prime Minister Atal Bihari Vajpayee’s six-day visit to China. He arrived there Sunday.

Vajpayee, the first Indian prime minister to visit China in 10 years, spent two hours Monday with Chinese Premier Wen Jiabao who, official sources here said, described the visit as a ”the beginning of a new era in China-India relations”.

In a televised briefing in Beijing soon after their historic meeting at the Great Hall of the People, India’s Foreign Minister Yashwant Sinha said the two sides had agreed that one bilateral issue – the unresolved border – could not hold hostage other areas where cooperation was possible.

The neighbours signed as many as nine agreements, including those for the easing of visa norms and strengthening bilateral cooperation in various fields.

Wen, who assumed office barely three months ago, announced that China had earmarked 500 million U.S. dollars for investment in India. Vajpayee returned the gesture by saying that Chinese firms investing in India could expect the best possible treatment.

Among those who welcomed the development was Prof. Alokesh Baruah, a well-known economist and expert on India’s neglected north-eastern region that is likely to benefit greatly by the reopening of the ancient trade routes through the Indian states of Sikkim and Arunachal Pradesh, which border China.

”The only way that the north-eastern region can be developed is through trade and the whole area has remained dormant for too long only because of closed borders,” Baruah said in an interview.

Reporters accompanying the Indian team were informed by Foreign Minister Sinha that the issue of Chinese recognition of Sikkim – a Himalayan kingdom until its merger with India in 1975 – as an integral part of India came up during Monday’s discussions.

Apart from the Sikkim issue, China claims 90,000 sq km of land in Arunachal Pradesh. Likewise, India holds that China occupies 38,000 sq km of the Ladakh region of the former princely state of Kashmir.

Wen was reported as saying on Saturday that Beijing was ready for a mutually acceptable solution to the vexed boundary issue, which he described as a ”historical burden on our two countries left over by the colonialists”.

"The Chinese side stands for a fair, reasonable and mutually acceptable solution to the issue, a solution that can be found through bilateral talks in accordance with the principles of consultation on an equal footing, mutual understanding, mutual accommodation and mutual adjustment," Wen was quoted as saying.

According to Baruah, the idea that trade could help achieve peace was a novel one made possible by the economic liberalisation of both countries.

Baruah said the present government has also been vigorously pursuing a ‘Look East’ policy that envisaged the opening of India’s insurgency-ridden north-eastern states to the economies of South-east Asia and the Far East.

”The attempt to use trade as a bridge has not worked too well on the western side, where Pakistan has until recently insisted that the issue of settling the dispute over Kashmir must precede everything else,” Baruah said.

China has in recent years toned down its stand on Sikkim’s accession to India, even conceding that the state is a non-issue so far as the border dispute was concerned although it has yet to officially accept Sikkim as a part of India.

While details of Monday’s memorandum of agreement are yet to be made known, China may want to reopen its border post in the Himalayan town of Kalimpong in West Bengal state and the consulate it maintained in Kolkata. Both had been functional until the 1962 war.

Since India and China took their first slow steps toward peace after the war, during the eighties, China has opened a consulate in the western port city of Mumbai and India has done likewise in Shanghai, but reopening the Kolkata consulate was considered too sensitive.

In spite of the movement forward on the border trade issue, some analysts say that there has been no breakthrough yet on the substantial issues that have kept China and India divided for four decades – including the annexation of Tibet by China.

”It will be something of a miracle if the Vajpayee visit can make serious headway on the boundary question,” commented Anand Sahay in Monday’s ‘Hindustan Times’, the influential daily newspaper.

”At the root of the boundary problem is India’s 1954 one-sided acceptance of China’s annexation of Tibet without Beijing’s acceptance of the Indo-Tibetan border,” said Brahma Chellaney, a strategic affairs expert with the prestigious Centre for Policy Research.

According to Chellaney, the border talks have actually reached a ”dead end” because China is unwilling to take even the preliminary step of exchanging maps.

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