U.S. strategy, directed toward an escalating competition with China, now sees the Indian Ocean as inseparable from the Pacific—combined in an organic Indo-Pacific whole—and India as a linchpin partner in it. As the United States plans to redouble its military power in the western Pacific, it is relying on India to grow more powerful and help safeguard their shared interests in the Indian Ocean, easing demands on U.S. resources in that region.

But that will not be the end of the story. India remains the most consequential strategic actor in the Indian Ocean by virtue of its geographic centrality, economic and military power, and abiding networks of influence across the region. But its capabilities and intentions—and therefore the strategic trajectory of the Indian Ocean—will continue to evolve as they have since the uncertain days of 1989 and long before. What if in the coming years India fails to expand its military power as its champions expect and instead is outmatched by China in the Indian Ocean? Or what if, in the throes of competition with China, India exercises its power more nakedly than its regional partners would wish? Relatedly, what if the United States, which has for decades underwritten regional security, chooses to retrench its strategic presence to focus efforts in the western Pacific? Policymakers in Washington, Canberra, and regional capitals would be well-advised to accept that many trajectories—some sharply divergent—are possible.

This essay offers a preliminary attempt at illustrating some of those sharply divergent scenarios. It uses a novel alternative futures methodology known as major/minor trends to derive scenarios of Indian and U.S. strategic behavior and their resulting effects on the Indian Ocean region. The essay briefly introduces the methodology and then sketches three alternative futures designed around a relatively weaker India, an aggressive India, and a retrenching United States, respectively. Each scenario is designed to convey a key lesson for policymakers on the fragility of the assumptions that underpin current policy. 

Using administrative data on over 4 million hospital visits, we document striking gender disparities within a government health insurance program that entitles 46 million poor individuals to free hospital care in Rajasthan, India. Females account for only 33% of hospital visits among children and 43% among the elderly. These shares are lower for more expensive types of care, and far lower than sex differences in illness prevalence can explain. Almost two-thirds of non-childbirth spending is on males. We combine these data with patient survey, census, and electoral data to show that 1) the program is unable to fully offset the costs of care-seeking, which results in disparities in hospital utilization because some households are willing to allocate more resources to male than female health; 2) lowering costs does not reduce disparities, because males benefit as much as females do; and 3) long-term exposure to village-level female leaders reduces the gender gap in utilization, but effects are modest and limited to girls and young women. In the presence of gender bias, increasing access to and subsidizing social services may increase levels of female utilization but fail to address gender inequalities without actions that specifically target females.

The Ladakh crisis between China and India seems to have settled into a stalemate, marked by somewhat reduced tactical tensions and continuing fruitless talks on disengagement—but its trajectory could again turn suddenly, even flaring into a limited conventional war. Despite a limited disengagement, both sides continue to make military preparations near the Line of Actual Control (LAC) to increase their readiness for potential conflict. While China proved its revisionist intent with its 2020 incursions, its specific goals and plans remain opaque. The broader political context is marked by distrust and hostility, and bilateral relations are at their lowest ebb in decades. War remains unlikely—both sides can ill-afford the distraction from higher national priorities and have demonstrated a recent keenness to step back from the brink. But, with growing capabilities and unclear intent, and with military operations no longer impaired by winter, the Ladakh crisis may still escalate to conflict.

The crisis has been full of surprises. Despite observing major military maneuvers in China, India didn’t anticipate the multiple incursions across the LAC in May 2020. For weeks thereafter, the Indian Army leadership insisted the incursions were nothing out of the ordinary. After both sides agreed to an early disengagement plan, the crisis took a shocking turn with a deadly skirmish in June — the first loss of life on the LAC in 45 years. India also mustered its own surprises, deploying troops to occupy tactically valuable heights in late August, to gain some bargaining leverage. And the crisis also abated with a surprise, with the sudden announcement of disengagement from heavily militarised stand-off sites around Pangong Tso Lake in February 2021.

Future surprises may yet occur. This paper argues that the risk of China–India conflict is significant because, even if its likelihood is low, its consequences may be considerable. A limited conventional war would be likely to impose significant costs on India, but, depending on the reactions of its partners, it may also reinforce latent Indian suspicions over the utility and reliability of its strategic partnerships. In that way, even a localized limited war on the LAC may have far-reaching implications, if it incidentally drives a wedge between India and its partners in the Quad. Mitigating that risk will require sound policy settings and astute diplomatic and public messaging from Canberra, Washington, Tokyo, and other like-minded capitals.

The remainder of this paper is in three parts: first, why a border war is plausible; second, what costs it would impose on India and how it might stir distrust of India’s Quad partners; and, finally, a framework to mitigate those risks.

In May 2020, China launched several near-simultaneous incursions across the Line of Actual Control (LAC) in Ladakh, into territory hitherto controlled by India. Both sides reinforced their positions with tens of thousands of troops, engaged in a deadly skirmish, and reportedly came close to war. An agreement to disengage troops was announced in February 2021, but implementation has been halting. Regardless of how disengagement progresses, the crisis poses significant challenges for India’s long-term strategic competition with China.

As a result of the Ladakh crisis, India faces a new strategic reality in which China is a clear and abiding adversary. For India, the political relationship is now defined by hostility and distrust, and the LAC will remain more heavily militarised and violence-prone. Given this new reality, India is likely to further defer military modernisation and maritime expansion into the Indian Ocean. In the face of unremitting Chinese naval expansion, India risks losing significant political and military leverage in the Indian Ocean. At the same time, China appears to have escaped significant harm. Its better-resourced military could better absorb the material costs of the mobilisation. It may have been more concerned by the prospect of an increasingly hostile India, but the disengagement agreement has limited even those modest political costs.

The central policy challenge for India is balancing the heightened Chinese military threat on the northern border with the rapidly growing Chinese military presence in the Indian Ocean. It can manage this challenge by focusing on military strategies of denial rather than punishment, focusing on imposing political rather than material costs on China, and accepting more risk at the LAC in exchange for long-term leverage in the Indian Ocean region. How India responds will shape not only its strategic competition with China, but also the interests of likeminded partners including Australia, which depend on an increasingly capable and active India.
 

Key Findings

• The still-unresolved Ladakh crisis has created a new strategic reality for India, marked by renewed political hostility with China, and an increased militarisation of the Line of Actual Control.
• This new strategic reality imposes unequal costs on India and China. India is likely to defer much-needed military modernisation and maritime expansion into the Indian Ocean — which would impair its ability to compete strategically with China.
• In contrast, China incurred only marginal material costs; it was probably more concerned with the prospect of continued deterioration in its relationship with India. Even that cost was more threatened rather than realised, and largely reduced when the disengagement plan was agreed.

 

In the Media

• ABC Radio
• The Hindu
• The Stimson Center's South Asian Voices (view also the related panel discussion below)

The rapid growth of electricity demand in developing nations, the availability of complementary generation resources, and the emergence of digital technologies have created increased opportunities for the international electricity trade. This paper proposes a framework for cross- border electricity trade (CBET) in the Bangladesh–Bhutan–India–Nepal (BBIN) Region that recognises the governance challenges associated with establishing an international electricity market. We explore the lessons for the BBIN Region derived from different types of CBET models. Specifically, existing markets in Northwest Europe, Latin America, and the United States provide insights into the development of our proposed cost-based CBET framework. We provide recommendations based on our proposed CBET framework to improve efficiency and increase the extent of electricity trade in the BBIN Region.