Disclaimer: Following is a complete replica of the article present in "Times of India" dated April 20th, 2008 by Shashi Tharoor. I am just copying it here with some highlighted content so that more people can give a look at the article.
Personally, count me amongst the sceptics. It's not just that, aside from the fact that both countries occupy a rather vast landmass called "Asia", they have very little in common. It's also that the two countries are already at very different stages of development — China started its liberalization a good decade and a half before India, shot up faster, hit double-digit growth when India was still hovering around 5%, and with compound growth, has put itself in a totally different league from India, continuing to grow faster from a larger base. And it's also that the two countries' systems are totally dissimilar. If China wants to build a new six-lane expressway, it can bulldoze its way past any number of villages in its path; in India, if you want to widen a two-lane road, you could be tied up in court for a dozen years over compensation entitlements. When China built the Three Gorges dam, it created a 660-kilometer long reservoir that necessitated the displacement of a staggering 2 million people, all accomplished in 15 years without a fuss in the interests of generating electricity; when India began the Narmada Dam project, aiming to bring irrigation, drinking water and power to millions, it has spent 34 years (so far) fighting environmental groups, human rights activists, and advocates for the displaced all the way to the Supreme Court, while still being thwarted in the streets by the protesters of the Narmada Bachao Andolan. That is how it should be; we are a fractious democracy, China is not. But let us not even pretend we can compete in the global growth stakes with China.
But if we can't compete, can we co-operate? The two civilizations had centuries of contact in ancient times; thanks mainly to the export of Buddhism from India to China, Chinese travellers came to Indian universities, visited Indian courts, and wrote memorable accounts of their voyages. Nalanda received hundreds of Chinese students in its time, and a few Indians went the other way; a Buddhist monk from India built the famous Lingyin Si temple in Huangzhou in the 5th century. Kerala's coastline is dotted with Chinese fishing nets, and the favourite cooking-pot of the Malayali housewife is the wok, locally called the cheen-chetti ("Chinese vessel"). It's been a while, though, since Indians and Chinese had much to do with each other. The heady days of "Hindi-Chini bhai-bhai", the slogan coined by Nehruvian India to welcome Chou En-Lai in 1955, gave way to the humiliation of the 1962 border war, after which it was "Hindi-Chini bye-bye" for decades. The bitter border dispute between the two countries remains unresolved, with periodic reports of incursions by Chinese troops onto Indian soil and new irritants over the anti-Chinese protests of Tibetan exiles who have been given asylum in India. To speak of a "trust deficit" between the two countries is arguably an understatement.
And yet, there has been some good news. Trade has doubled in each of the last three years, to an estimated $40 billion this year; China has now overtaken the US as India's largest single trading partner. Tourism, particularly of Indian pilgrims to the major Hindu holy sites in Tibet, Mount Kailash and Lake Mansarovar, is thriving. Indian information technology firms have opened offices in Shanghai and Hangzhou, and Infosys recruited nine Chinese this year for their headquarters in Bangalore. There are dozens of Chinese engineers working in (and learning from) Indian computer firms and engineering companies from Gurgaon to Bangalore, while Indian software engineers in Chennai and Bangalore support the Chinese telecoms equipment manufacturer Huawei.
By and large, India is good at things that China needs to improve at, notably software; China excels at hardware and manufacturing, which India sorely lacks. So India's Mahindra and Mahindra manufactures tractors in Nanchang for export to the United States. The key operating components of Apple's iPod were invented by the Hyderabad company PortalPlayer, while the iPods themselves are manufactured in China. Philips employs nearly 3000 Indians at its "Innovation Campus" in Bangalore who write more than 20 percent of Philips' global software, which in turn goes to Philips' 50,000 strong workforce in China to turn into brand-name goods.
In other words, the elephant is already dancing with the dragon. The only question is whether the two countries can prolong the dance, or whether political tensions could bring the music screeching to a halt. There is no doubt that, whatever our legitimate differences with the Communist regime in Beijing, co-operation is in the best interests of the peoples of both India and China. After all, 1 plus 1 doesn't only equal 2; put together properly, it can also add up to 11.
For example, why there was nothing on the matter of OBC reservation after so much protest by young doctors and engineers. Even the Supreme court has given its decision very soon, WHY??? Is it just because protesting against it will be a leak in the vote bucket of every political party. So every party supported it whether it makes any sense or not.
Also another thing as Shashi said that the elephant is already dancing with the dragon but it is only because China is dominating either it is border issue or business issue. If the condition were reverse as it is then there was no way that there would be such relations.