Choices usually involve a price, but people persist in believing that they can avoid paying it. That is what the Indian government thought when it joined the American Alliance System in Asia in the year 2005, but now the price has become increasing clear: China is claiming the whole of the Indian state of Arunachal Pradesh — some 83,000 square kilometres of mountainous territory in the eastern Himalayas containing over a million people.

China has claimed Arunachal Pradesh for a century. During the Sino-Indian border war of 1962, Chinese troops briefly occupied most of the state before withdrawing and inviting India to resume negotiations. However, most Indians thought the dispute had been more or less ended during the visit of the Chinese premier, Wen Jiabao, to New Delhi in April 2005. During that visit, the two sides agreed on “political parameters” for settling both the Arunachal Pradesh border dispute as well as another in the western Himalayas.

Indians assumed that the new “political parameters” meant that China would eventually recognize India’s control of Arunachal Pradesh. In return, India would accept China’s control of the Aksai Chin, a high-altitude desert of some 38,000 sq km, next to Kashmir. And that might actually have happened, in the end — if India had not signed what amounts to a military alliance with the United States of America.

Informed Indians knew perfectly well that Wen Jiabao’s visit was a last-minute attempt to persuade India not to sign a ten-year military cooperation agreement with the Americans. Two months later, Pranab Mukherjee, the Indian foreign minister, went to Washington and signed the treaty. Yet, most people in New Delhi managed to convince themselves that the Chinese premier’s concessions during his visit were not linked to India’s decision about the American alliance.

In June 2006, I spent two weeks in New Delhi interviewing Indian analysts and policy-makers about the country’s strategic relations with the US and with China. With few exceptions, their confidence that India could “manage” China’s reaction to its American alliance was still very high. “India knows what it is doing,” insisted Prem Shankar Jha, former editor of a national daily, citing confidential sources close to the prime minister, Manmohan Singh. “It is not going to make China an enemy.”

On the face of it, India got a very good deal in the lengthy negotiations that led to the military cooperation agreement. It got access not just to current US military technology but also to the next generation of American weapons along with full technology transfer. The Indian military are predicted to buy $30 billion of US hardware and software in the next five years. They got all sorts of joint training deals, including instructions from the US navy for Indian carrier pilots. And Washington officially forgave India for testing nuclear weapons in 1998.

This was the only part of the deal that got much attention in Washington, where the Bush administration waged a long struggle (only recently concluded) to get the Congress to end US sanctions against exporting nuclear materials and technologies to India. Stressing the military aspects of the new relationship would only rile the Chinese, which would obviously conclude that it was directed against them. Especially since Japan and Australia, America’s closest allies in the Asia-Pacific region, have also now started forging closer military relations with India.

It took a while, but China was bound to react. Last November, just before the first visit of President Hu Jintao to India, the Chinese ambassador firmly stated that “the entire state (of Arunachal Pradesh) is a part of China.” This took New Delhi by surprise, defence analyst, Uday Bhaskar, told a newspaper last week: “The Indians had taken the (2005) political parameters (for negotiating the border issue) as Chinese acceptance of the status quo.” They should have known better.

It is mostly petty irritants so far, but they accumulate over time. Last month, for example, Indian naval ships took part in joint exercises with the US and Japanese navies in the western Pacific, several thousand kilometres from home and quite close to China’s east coast. Admiral Sureesh Mehta, chief of naval staff, said the exercise had “no evil intent,” and two Indian warships also spent a day exercising with the Chinese navy to take the curse off it. But Beijing knows which exercise was the important one.

Also last month, India cancelled a confidence-building visit to China by 107 senior civil servants. This was because Beijing refused to issue a visa to the one civil servant in the group who was from Arunachal Pradesh on the grounds that he was already Chinese and did not need one.

A year ago, Indian foreign policy specialists were confident that they could handle China’s reaction to their American deal. In fact, many of them seemed to believe that they had taken the Americans to the cleaners: that India would reap all the technology and trade benefits of the US deal without paying any price in terms of its relationship with its giant neighbour to the north. But there was confidence in Washington, too: a quiet confi- dence that once India signed the ten-year military cooperation deal with America, its relations with China would automatically deteriorate and it would slide willy-nilly into a full military alliance with the White House. Who has taken whom to the cleaners remains to be seen.