In an exclusive and extensive interview to Managing Editor (National Affairs) Sheela Bhatt and Nikhil Lakshman -- which we will publish in several parts -- Narayanan spoke at length about the discussions with China and hinted at the possible direction of the talks that intends to create history by the peaceful settlement of the decades-old dispute.

Can we start with the very important visit of President Hu Jintao? After eight rounds of Special Representative level talks and 15 Joint Working Group meetings how are we placed? Can you give us an overall picture of India-China relations after Hu Jintao's visit?

I can, but the issue you raised were about the eight rounds of SR (Special Representative) talks. That is a separate issue from Hu Jintao's visit.

Sino-India border talks is an important component but after the end of the fifth round (the first three rounds were handled by Narayanan's predecessor J N Dixit) we managed to arrive at a very remarkable step with regard to the guiding principles and political parameters. Without that you can't really go forward.

Till then we were quite unclear what would be the principle on which the next steps will take place. Now, we are at the stage to create an agreed framework. That is going to take quite sometime I would presume.

After all, it is a problem, as the Chinese say, left over by history. And we have to arrive at a mutually acceptable solution. We now have certain guiding principles, we have certain political parameters. Therefore, the talks can proceed.

There is a compass for the talks. Now we know in which direction the talks are going. Naturally, both sides are not going to give in easily because there are long-standing beliefs, long-standing commitments and long-standing territorial issues. That will take time.

How long?

Well, it all depends on one side or the other finally deciding to give in. There are issues. What we have agreed is that there will be no major displacement of population. Given that, I suppose, one major area which is already populated by Indians or Chinese, we would not ask for it to be transferred. I suppose both sides will, still, make some demands. That will be the matter we are supposed to discuss.

The newspaper (The Asian Age) of which you were once a director and columnist speculated that there was a discussion on the redrawing of borders... Is swapping of areas on the border on the table?

Quite clearly, when you finally delineate the border, which is the third stage, as you know there is a guiding principle, political parameters, then there is the agreed framework and then the final delineation of borders...

When the final delineation of the border takes place, I presume, as a result of all the discussions that have taken place in round one and round two, maps will be drawn.

For instance, the McMahon Line will be there. In the McMahon Line itself, because of modern cartography innovations and what not, there will be changes in it. There may be certain amount of changes with regard to the agreement that we may reach.

It is possible that there may be some amount of changes in territory. But what we have agreed upon is that where there are settled populations we don't want to have a Partition-kind of situation. People moving across borders, creating problems on both sides, and, God knows, what will be the other consequences.

What is the crucial point on which there is a deadlock?

(Raises voice) There is no deadlock! It is the ignorance of people like you, I am sorry to say, who talk about a deadlock. You are thinking in terms of the territory which both sides have laid claim to for a long time. We, of course, are in possession of most of the territory that the Chinese lay claim to.

The question is to reach an understanding. There is no deadlock. The deadlock comes when basically we reach the final point. We are nowhere near the final point. There are issues.

There is a McMahon Line. The Chinese side has not accepted the McMahon Line. They have contested that. While they do not officially recognise the McMahon Line, by and large there seems to be an agreement on the McMahon Line... Now, it is left to the SRs (Special Representatives) and also, the other negotiators finally to arrive at what would be mutually acceptable.

So, everything is a deadlock! If I have to come at 10.30 in the morning and if you come late because Mr Nikhil Lakshman's plane does not land it is not a deadlock! It's a matter of adjustment. I think the press wants a deadlock, you want the breakdown of the negotiations so that you get newspaper headlines.

No sir, you will agree that the overall relationship will have...

I don't think that. The border issue is certainly not going to be a problem in the Sino-Indian relationship. That is a fundamental. That is what Hu Jintao made it very, very clear.

Yes, these are issues on both sides, but both sides are mature. We have no confrontation. The borders will remain peaceful. But we need to settle issues so that people cannot raise these issues later on.

As of now, the border is not an issue in the Sino-Indian relationship. Yes, it is an issue between two countries but it is not something that is holding up (things) like Kashmir as far as Pakistan is concerned.

Do you see it becoming an issue with the resurgence of Chinese nationalism?

I think both sides are comfortable with each other. You said there is a rise in Chinese nationalism; people may also see a rise in Indian nationalism. I think we are two mature nations. In the 1950s, I suppose we had great bon homie... like children (the) two new countries came together. They thought about the world. And, suddenly, they ran into a major one (trouble).

The most important thing happening in the world today is the simultaneous rise of India and China. A peaceful rise of both countries. Both are intent on their economic progress and moving forward.

China wants to be the world's most important economic power by 2020 or 2030 whatever... We have no such ambitions but we certainly want to be a country which is the economic dynamo of a certain kind but tempered with social justice.

We are not going to stampede people in doing things. Therefore, the rate of progress may be slower but as the prime minister remarked the other day, the Indian elephant will move slowly but surely it will move forward. That is the basic point.

There is absolutely (loudly emphasises) no reason for India and China to even contemplate a conflict! Yes, but we are rivals. The world looks at India and China. As more and more people look to India as a model in terms of economic growth, political maturity, political stability, social equality and egalitarian (society) of a certain kind that China will be seen as doing (things) different. I suppose there is rivalry between us and so many other countries in the world.

I think in the visit of Hu Jintao, the message was very clear. The Chinese and Indian sides made it very clear that we would not disturb the equilibrium that we have established.

Is there a timeframe you may like to have on the 'final point' on the border discussion?

If you look at the history of the border disputes that the Chinese have had or for that matter most countries have had -- suddenly something happened. It is a question of the degree of flexibility that either side shows in terms of the issues.

The one major point, I said, was that what should be the guiding principles... that we have achieved. Now, the framework is somewhat a more difficult phase. Then the delineation of the border will become a much easier exercise.

Were you surprised the way the issue of Arunachal Pradesh cropped up after the Chinese ambassador's interview? The media and public mood in India changed on the eve of President Hu's arrival. Were you surprised to see that Indians in general have such a strong position about this issue?

Arunachal Pradesh has always been seen by Indians as an integral part (of India). That is our position. What we are negotiating is -- are there parts of Arunachal Pradesh on which there could be differences and if that needs solutions?

First and foremost, the Chinese ambassador should not have said it on the eve of President Hu Jintao's visit. But President Hu Jintao didn't raise the issue. He didn't even bother!

You think the only talk during Hu Jintao's visit was on the Sino-India border? I am sorry to say this, but I am surprised to see the inability of people like you to see the bigger picture.

You are the Special Representative that is why we are asking you. You are very important, a key person in...

I am SR but I also have an equal role in Hu Jintao's visit. The point is in the entire context of the Hu Jintao visit so many things have happened.

Economic...

Economic, political... You are talking in terms now of a strategic relationship. It is a move forward... This is extraordinary. And you are now talking about the border which is important no doubt but it is a very small part of the...

The reason that this issue has come about so prominently is because of the ambassador's remarks.

I am sorry to say but the media likes to harp on anything that is confrontationist. That I think has been very unfortunate in my opinion. It is really a question of dog biting man or man biting dog. The ambassador made the statement but he is not the policy maker in any case.

I can understand if President Hu Jintao came and made the same statement and you were referring to it. We are unhappy that the matter has been blown up. This, I think, is unfortunate. I think the media should play a much more important role in informing people about what has happened instead of highlighting things which are marginal to the basics.

I think Hu Jintao's visit was in some ways an extraordinary event. There was stability, maturity, assurance. Somebody who is normally taciturn is saying India and China are partners in progress. That is what we want. We are not seeking anything from China.

People want to know what did we get (from the Chinese)? We are not beggars on the street. We are now one of the countries which provides aid to countries from Afghanistan to Africa; we are not looking for aid.

What we want is that finally the world recognises India. China is the country we look at to say yes, India is in the same league. You compare the statement he (President Hu) made in the past and what he made now is the sum total of it (his visit).

Yes, he said, both SRs should work even harder on the border issue. He made it very clear that it will take time but whatever happens, that is not going to be the problem as far as the final negotiations are concerned.