One evening last September, Asgar Qadri, a wiry, 27-year-old credit analyst from Indian-controlled Kashmir, stood at the glittering departure terminal of New Delhi's international airport surrounded by a small group of friends. The boys hugged Qadri and patted his back with exclamations of random names they associated with China: "The Bird's Nest!" "Hu Jintao!" "Huawei!"

As Qadri pushed his luggage trolley toward the Air China counter, his eyes brimmed with tears. A schoolteacher's son from a remote Kashmiri village, he had recently won a scholarship to study public policy at Tsinghua University, in Beijing. "With that flight to Beijing," Qadri later told me, "I felt my life was about to take off."

But Indian immigration officials told Qadri that all Indian passport holders must have their visas pasted on, not stapled to, their passports. He was barred from boarding the flight.

Various meetings with Chinese and Indian officials revealed that Qadri had gotten swept up in a hostile diplomatic battle between the two rising Asian powers. In a signal of China's resistance to India's control of the disputed regions of Kashmir and Arunachal Pradesh, which China has long claimed as "Southern Tibet," China began issuing stapled visas to Indian passport holders from those areas.

Qadri lost his scholarship in Beijing and quietly began to apply for graduate study in the United States. The Indian media, however, immediately went into hysterics over his case and those of other Indian nationals caught up in similar altercations; talk of Chinese interference and aggression was everywhere, as was the memory of India's 1962 border war with China.

China's decision to needle India over Kashmir -- long one of India's most sensitive diplomatic issues -- suggests a major departure from China's earlier noninterventionist policy. In India, the crisis has become perhaps the most visible sign of the friction that will accompany the so-called Asian century: as China's and India's economies continue to grow, the two countries will vie for greater influence, competing for both markets and resources.

In the weeks that followed Qadri's visa dispute and the ensuing uproar, tensions continued to rise. In October, China opposed a trip by Indian Prime Minister Manmohan Singh to Arunachal Pradesh to campaign for candidates from his Congress Party running in local elections. Chinese foreign ministry officials called on India to address their "serious concerns" and "not trigger disturbances in the disputed region."

This showdown was the latest in a series of disagreements over the status of Arunachal Pradesh, part of which was under Tibetan rule until it was annexed by British India during World War II. Last spring, China objected to a $2.9 billion loan to India from the Asian Development Bank, $60 million of which was earmarked for flood management in Arunachal Pradesh. Five months later, in August, China moved approximately 50,000 additional soldiers to the Tibetan border, about 25 miles from Tawang, a town in Arunachal Pradesh that is the second-holiest site for Tibetan Buddhists after Lhasa. India responded by deploying tens of thousands of its own troops to its border with China.
Soon after China protested Singh's visit, India countered with its own objections to the construction of a Chinese power plant and other projects in Pakistani-controlled Kashmir. The Indian foreign ministry called on the Chinese to "cease such activities in areas illegally occupied by Pakistan." A few weeks later, China took issue with the construction of a road along India's de facto border with China in Ladakh, a part of Indian-controlled Kashmir; construction was stopped. At the same time, Indian analysts began speaking of incursions by the Chinese military across the border.

Tensions rose even higher in November, when the Dalai Lama was preparing to visit the Tawang monastery, where he spent his first night of exile after crossing the border from China into India in 1959. Since 2005, when India began pursuing close ties with China, New Delhi had adopted a colder posture toward Tibetan activists. But with China renewing the border dispute, India asserted its sovereignty over Arunachal Pradesh and allowed the Dalai Lama's visit. Although the Dalai Lama described his intentions as "nonpolitical," many believe that he was trying to identify his eventual successor among the monks at the monastery.

The event reawakened tensions over the two countries' 2,200-mile effective border, known as the McMahon Line, named after Sir Henry McMahon, the foreign secretary of British India who demarcated it in 1904. McMahon negotiated the border with a then autonomous Tibetan government. Today, India largely accepts the line, but China rejects it, because it views the border as an impediment to Chinese control of Tibet. After a series of border skirmishes in the 1950s, the two countries fought a brief war in 1962. In 2005, China and India agreed to a framework that would solve the dispute with a series of mutually accepted adjustments, but little progress has been made since.

The festering discord -- and relations with China, in general -- is perhaps the one foreign policy issue that causes anxiety for an otherwise buoyant and optimistic government in New Delhi. Some Indian policymakers believe China's newfound assertiveness stems from its relative economic clout after the United States and Europe were hit especially hard by the global recession. "The Chinese have come out at the top of the heap," said India's former ambassador to the UN, Arundhati Ghosh, who was involved in negotiating the U.S.-India nuclear deal that was strongly opposed by China. "It is that sense of power that is leading them to prick India and flex muscles."

Last December, I attended a seminar organized by the Aspen Institute India called "India-China: Forging an Uneasy Alliance." The room was filled with the country's elite industrial magnates, intellectuals, and journalists. There was talk about the Obama administration's emphasis on the U.S.-China relationship and about New Delhi's lack of confidence in dealing with Beijing. Sanjay Labroo, who heads the Confederation of Indian Industry's task force on economic relations with China, shocked many in the audience when he said, "We flatter ourselves by even using the terms 'Chindia' or 'China-India.' The hyphenation is not justified. China is way ahead of India, whether it is automobile or steel production or spending on health." He went on, "India is only ahead of China in its population growth and movie production."

Questions followed about how India might best catch up with China, both in terms of economics and geopolitics. (China is India's largest trading partner, whereas India remains China's tenth-largest trading partner.) The seminar's moderator turned to Nayan Chanda, the former editor of Far Eastern Economic Review and the Indian best suited to speak on China. "Because the Chinese government and its state-controlled media speak in the same voice, the Chinese have created a narrative which refuses to describe India as a threat but presents it as somewhat paranoid," he explained. "The Chinese rarely talk about India, while the Indian press runs wild with stories about China, which makes India come across as insecure and aggressive."

Although the Indian press has indeed adopted a shrill tone toward China, Singh's government has been more sober in its dealings with Chinese officials. At an Association of Southeast Asian Nations conference in Thailand last July, Singh reached out to Chinese Premier Hu Jintao to ease tensions. In a statement to the press, Singh called China a great nation, saying, "We share with the Chinese people their pride of success." At the Copenhagen conference on climate change in December, India allied itself with the skeptical and ultimately obstructionist Chinese position, which resulted in the summit reaching an inconclusive end.

Still, the two countries have very real areas of rivalry: they will struggle against one another for dominance in the Indian Ocean, compete for resources in Africa and gas in Burma, vie for influence with the United States, and more specifically, debate the question of devaluing the Yuan, on which India and the United States are in agreement.

This suggests that some strain is unavoidable. But at the moment, a serious conflict seems unlikely. "It will not be all sweetness and reasonableness, but I would be surprised if there was any conflict in the next 20 to 30 years," Lee Kuan Yew, the former prime minister of Singapore, told a gathering of Indian business leaders in Delhi in early December. "It will take that time for both to get their economies to speed. Trade and investment will continue."

Many see economic ties as ultimately providing the basis for an improved relationship. Between 2001 and 2007, Indian-Chinese trade grew from $3 billion to $40 billion and is expected to reach $60 billion in 2010. "We have to work toward getting the Chinese infrastructure and manufacturing companies to invest in India," said Labroo. "Eventually greater business ties will bring us closer and tide over the political frictions."

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  • BASHARAT PEER is a Fellow at the Open Society Institute. His book on the Kashmir conflict, Curfewed Night, will be published in February by Scribner.
  • More By Basharat Peer