In terms of sheer volume of trade (around $66 billion in 2012), the economic engagement between India and China has always been hailed as a successful model. Under this fierce ‘economic statecraft’, India thought it would normalise border stand-off with China. Sadly, it never happened. Just before Chinese premier Li Keqiang’s first visit to India, People Liberation Army (PLA) entered 19-km deep into eastern Ladakh, close to the strategic Karakoram Pass and pitched five tents in the area.

While China on April 30 rebuffed India’s plea to withdraw its troops, squatting 19km inside Indian territory at Raki Nala in the Depsang Bulge area, fresh imagery from Indian spy drones has shown that the People's Liberation Army (PLA) has already started using trucks to replenish supplies for over 30 soldiers stationed there. The pictures, which also show that PLA is trying to convert the track there into a proper road, are transforming what the government had called a "localised problem'' into a first-rate diplomatic crisis.

Both nations had committed to solve the border dispute through an agreement signed in 2005 which said the settled population will not be disturbed. But China ignored this agreement and moved to more hostile approach which has resulted now into the ‘tent confrontation’ in the Ladakh region. Even in the Chinese circle, this agreement is not discussed. You do not find this agreement on their official website.

Beijing’s policy is based on ‘Theory of Gradualism’, which means, “advancing toward a goal by gradual, often slow stages”. Since 2006, China has upped its ante towards India, raising the ‘Arunachal Pradesh’ territory (which China sees as a part of South Tibet) issue. There have been various minor Chinese incursions in Ladakh, Arunachal Pradesh and few other spots in the past seven years. However, both the countries have been actively engaged in border-level talks since 2003. Sadly, even after more than a dozen rounds of discussion on border dispute, we have only exchanged maps, not gone beyond it.

The Chinese territorial ambition is well known, a cue being its border disputes with Japan and Vietnam. While these two nations have thwarted any Chinese aggression, it is India that has always lived in denial, a perpetual denial from the first prime minister’s time to the current ones. Prime minister Manmohan Singh said recently that Chinese incursion is a ‘localised problem’. PM’s ignorance on the matter seems inherited, as India’s first prime minister Jawaharlal Nehru made the rather infamous statement in parliament after India ceded Aksai Chin to China in 1962, “Not a blade of grass grows there”.

External affairs minister Salman Khurshid has compared the standoff over the Chinese incursion in Ladakh's Depsang valley as “acne "One little spot is acne, which cannot force you to say that this is not a beautiful face... that acne can be addressed by simply applying an ointment," he told a Ficci conference on April 25. “Ointment is part of the process of growing up, just as acne is part of the process of growing up. And the relation between India and China is a relationship which is growing up.”

On the contrary, in Beijing, a new Chinese leadership has taken over from the old guard. Xi Jinping is the new president, while Keqiang is new prime minister of the country. Both are considered to be ‘nationalist’ while president Jinping is considered close to the People’s Liberation Army. With the Chinese economy growing despite the global slowdown, it is this new set of leadership that is taking calls aggressively in geo-political matters.

Indian policymakers have long lived under the fear of China. Indian officials fear that if they react with force, the face-off could escalate into a battle with the powerful PLA. But doing nothing would leave a Chinese outpost deep in territory India has ruled since independence.