India’s goal of becoming a developed country by 2045 putting pressure on China

Direct flights are important for China from an economic perspective, because they ensure more Indian customers purchase raw materials and semi-finished products from the Chinese manufacturers.

However, the Chinese side is upset that India is negotiating with China but it is publicly criticising it for abusing its dominant position in key minerals, portraying it as an "unreliable or untrustworthy" supplier.

India, the Chinese argues, is also threatening to look for alternative sources of rare earths around the world and accelerate the development of domestic rare earth reserves so as to reduce its dependence on China. 

The Chinese side noted that India was not the only one. 

On the eve of the G7 Summit, the United States, the European Union, Japan, and other countries jointly called for the establishment of a "rare earth security supply chain" to reduce dependence on China. Given the global trends, there is concern in Beijing that G7 leaders could take up the issue of jointly dealing with China’s control of rare-earth matals.

Why Beijing is worried about Modi’s G7 visit

As PM Modi attends the G7 Summit, China watches closely, concerned over rare-earth diplomacy and India's balancing act between the West and Global South amid growing geopolitical unease.

As Prime Minister Narendra Modi visits Canada to attend the G7 talks, two big concerns seem to have gripped China’s strategic community.

Will G7 jointly deal with China’s rare-earth control?

Beijing's restrictions on rare earth exports in recent months disrupted global supply chains, particularly in the defence and automobile sectors. The Indian automobile industry was not immune.

 Beijing has been actively negotiating the issue with various countries, including India. On June 12, Chinese Vice Foreign Minister Sun Weidong visited New Delhi and met Foreign Secretary Vikram Misri and National Security Advisor Doval. 

The key agenda reportedly was to see if a deal could be reached where India’s requirement for rare earths was exchanged for China’s requirement of resuming direct flights between New Delhi and Beijing.

To prevent the formation of a global front against China’s export control measures, the Chinese strategy has been to avoid a "one-size-fits-all" blockade for all. Chinese officials have also been negotiating individually with each nation on a case-by-case basis.

For India, the overall sentiment is that, given India's continued unfriendly attitude, it rightly "deserves the pain". 

Chinese strategists further issued a warning that the G7 could do little to address India’s rare-earth crisis. On the other hand, given India's industrial strength, it will probably take a long time for Indian companies to use the rare earth materials produced independently. Therefore, India has little choice but to continue importing rare earths from China, on Chinese terms.

The other question that dominated the Chinese discourse was whether Indian diplomacy could balance the interests of the West and the Global South.

China has always been suspicious of the G7 platform. Despite the intergovernmental body actively inviting China to join it from 1999 to 2006, China has repeatedly refused, stating it would have to accept and abide by the rules set by the West and assume the international responsibilities assigned by them.

 It feared that joining the G7 would mean that China would either be subjected to a second “Plaza Accord”, humiliated like Russia, or lose the trust of the vast third world or the developing world, says 'India Today'.

However, India, they noted, has chosen a different path. Foreign Minister S Jaishankar once positioned India as a "southwest country", implying it was a bridge between the West and the global South. 

India, they argued, is seeking to leverage the support of the G7, a Western camp platform, to demonstrate the international community's recognition of its economic size, to strengthen its global economic voice, and thereby enhance its influence in the global South.

India’s goal of becoming a developed country by 2045 is, in a way, also putting pressure on China, whose official stance is that "it will always be a developing country". China has long complained that the West's continuous attempts to force China to become a developed country are really only a ploy, aimed at slowing down China's economic development.

"India cannot have its cake and eat it too”, argued Hu Shisheng, deputy secretary-general of the Academic Committee at the China Institutes of Contemporary International Relations, adding that “the roles it plays in the West and the global South are mutually contradictory, and India will sooner than later find itself in a rather isolated situation, where it fails to please either side”.

He cited India’s absence from Russia's Victory Day parade or its refusal to criticise the US tariff war at the BRICS Foreign Ministers' Meeting as evidence of India's policy of being a fence-sitter, “playing both sides”, thereby causing dissatisfaction among countries of the South, and diluting their agenda.

Prime Minister Modi’s C position in the group photo of the 2024 G7 summit created ripples on the Chinese internet last year. This year too, China will keep a close eye on the G7 Summit to accurately grasp the geopolitical headwinds.

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