Over the last two decades, China has drawn India’s neighbors closer into its embrace through a mix of financial incentives, defense agreements, and large-scale infrastructure projects.
This narrative, often highlighted by the Indian and Western media, suggests that China is using its economic power to lure these nations, providing substantial loans and constructing what some view as “white elephant” projects. The claim is that China’s endgame is to trap these countries in a cycle of debt dependence, and is using a “string of pearls” strategy to constrain India’s regional autonomy.
However, an examination of South Asian history since the late 1940s reveals a deeper, more nuanced reason for China’s success in the region.
India’s neighbors have long adopted a policy of seeking external alliances to mitigate India’s dominance.
India is South Asia’s dominant power. The most populous nation with the largest territorial expanse. Its military and economy are bigger than those of its neighbors. World Bank data shows that of the roughly 4.8 million military personnel in South Asia, India fields over three million. India not only dominates South Asia’s economy but this domination is growing; India now accounts for approximately 80 percent of the South Asian economy, up from 76 percent in 1980.
This structural imbalance, compounded by India’s central geographic position and shared borders with nearly every South Asian nation, has influenced Indian leaders to embrace a Monroe Doctrine-style approach to regional dominance. India’s first Prime Minister, Jawaharlal Nehru, articulated this stance in 1961, asserting that India would not tolerate external influences in South Asia, especially those that threaten Indian interests. Indian policymakers believe that regional cooperation should occur with India rather than through outside assistance. The rationale is that India’s recognized military superiority would ensure regional peace and stability.
Yet, India’s hierarchical vision for South Asia has met with opposition, most notably from Pakistan. From the beginning, Pakistan pursued regional parity with India, as well as the accession of Kashmir to Pakistan. To further these aims, Pakistan sought support from external powers such as the United States, China, the Gulf nations, and Turkey. While India’s intervention in East Pakistan’s liberation war of 1971 led to the splitting of Pakistan and a shift in regional power dynamics, Pakistan’s reliance on external support demonstrated to other South Asian nations the benefits of leveraging foreign alliances to balance Indian influence.
Sri Lanka, too, has historically taken measures to counter India’s dominance. Shortly after independence, the United National Party (UNP) leaned on the Commonwealth and entered into a defense pact with Britain to safeguard against Indian intervention. UNP leader Sir John Kotelawala remarked, “The day Ceylon dispensed with Englishmen completely, the island would go under India.” Later, Sri Lanka Freedom Party governments cultivated ties with the Non-Aligned Movement and the communist bloc to create distance from India. In the 1980s, President J.R. Jayewardene of the UNP sought closer relations with the United States as a counterweight to India. More recently, Sri Lanka has increasingly turned toward China to balance India’s influence.
India has historically viewed the involvement of external powers in the regions with suspicion. In the case of Sri Lanka, when Jayewardene grew close to the United States, India responded by funding, training, and sheltering Sri Lankan Tamil militant groups, eventually intervening directly in 1987 with an aerial “food drop” over Tamil areas and the signing of the India-Lanka Peace Accord. Former President Mahinda Rajapaksa also argued that India undermined his administration because of his alignment with China.
Although Sri Lanka has had two pro-India administrations since Mahinda’s departure, Sri Lanka’s political establishment has also maintained close ties with China to ensure that the island nation does not become dependent on the South Asian behemoth.
India also viewed the growing proximity between China and Maldives with concern. Since joining China’s Belt and Road Initiative (BRI) in 2014, the Maldives has borrowed approximately $1.4 billion from Chinese banks, which accounts for 20 percent of the country’s public debt. Through the BRI, China has made significant infrastructure investments in the Maldives. Following the exit of the India-friendly Ibrahim Mohamed Solih in 2023, Maldives’ bilateral ties with China strengthened under President Mohamed Muizzu, who swept to on an “India Out” campaign.
Soon after taking office, Muizzu requested that India replace its military personnel in the Maldives with civilian technicians. Muizzu also visited China, before visiting India. In response, India announced plans for a new naval base on Minicoy Island in the nearby Lakshadweep archipelago and torpedoed Indian tourist arrivals to Maldives by encouraging tourism to Lakshadweep.
However, a careful consideration of Muizzu’s actions shows that his aim is not to sabotage his relationship with India but to balance India and China strategically, leveraging their rivalry to secure favorable terms. The Maldives remains part of Modi’s “Neighborhood First” policy, which has provided Malé with significant financial support for infrastructure, development, and cybersecurity projects. In recent months, Maldives has secured assistance of hundreds of millions of dollars from India.
Despite political shifts, South Asian nations are likely to continue seeking external alliances to balance Indian influence. India’s dominance leaves little incentive for these countries to align with it. Without a common threat to rally South Asian nations around India, and with a perception of India’s involvement in separatist movements and regional destabilization, many countries view India as the primary threat. The economic power shift toward India also raises concerns in the neighboring countries over the flooding of Indian goods and professionals, threatening local economies.
India’s regional ambitions and China’s strategic outreach have set the stage for a complex power dynamic in South Asia. For the foreseeable future, India’s neighbors are likely to continue balancing India’s influence by involving external powers. Until India addresses its neighbors’ fears and economic concerns, regional cohesion around India remains unlikely. Instead, China’s influence in South Asia is poised to grow, reshaping the balance of power and adding complexity to India’s regional aspirations.