Indian Conundrum and Regional Imbalance in South Asia

As tensions continue to mount up in the Eastern Ladakh region along the Line of Actual Control (LAC), series of talks and dialogues continue between New Delhi and Beijing to resolve the deadliest border-standoff the two Asian giants have seen in 45 years.

Twenty Indian soldiers lost their lives in the June 15 clash. While China also reportedly suffered casualties, the country has not confirmed it.

While the diplomatic talks were being held, the Chinese side issued long statements that reiterated their claim over the Galwan Valley in eastern Ladakh. This is the first time since the Sino-India War of 1962 which eventually led to the demarcation of LAC that Beijing has made such a claim. Although the Ministry of Foreign Affairs rejected this claim saying that the claims were “exaggerated and untenable”, it says much about New Delhi’s futile foreign policy and diplomatic handling of matters of crucial importance. The world’s largest democracy is in a regional dilemma in the South Asian region with each of its neighbour posing a challenge or threat to its interests. With China increasing its footprint everywhere in the South Asian region and each country challenging New Delhi’s position, will India be able to sustain the regional balance in the region?


The long-standing rivalry between the two nuclear-armed nations is not new and perhaps both the nations share one of the most volatile borders in the world. But ties between the two nations seem strained beyond immediate repair. In yet another maneuver, India followed by Pakistan, has decided to halve the strength of diplomatic missions in each other’s capital. The government’s decision follows the ill-treatment and torture of Indian personnel posted in Islamabad, in clear violation of their diplomatic rights.

While expulsions of diplomats are not uncommon between countries as antagonistic as India and Pakistan, this is the first time such a measure has been taken since the 2001 Parliament Attack of India. The latest decision follows not one event, but a general downslide in relations over a year. Since the Pulwama Terror Attack of last year following Balakot Air Strikes, the two countries seem to have decided not to engage with each other in any manner on diplomatic levels. Whenever it seems like the relations between the two countries cannot get any worse, they actually do.

Islamabad has always been seen as a rival to India in the region and challenges India’s claim over Pakistan Occupied Kashmir and Gilgit-Baltistan Region which are currently administered by Pakistan. The Government of India on several occasions have made it pretty clear that New Delhi will not let go of its occupied territory.

But things are not as simple as they seem for India. The huge Chinese investments in different sectors of Pakistan’s economy poses some worrisome challenges to India especially the billion dollars project of China-Pakistan Economic Corridor(CPEC) in the Gilgit-Baltistan region which is under the illegal occupation of Pakistan. With China pouring in billions of dollars in this project, India has limited to counter it and that too is on shaky grounds. Earlier this year, the Ministry of Foreign Affairs in its statement of Feb 5, 2020, asserted that CPEC project is ‘illegal’ as it passes through the Union Territories of Jammu and Kashmir and Ladakh which are under the illegal occupation of Pakistan. This has always been the official position of the Indian side to the CPEC initiative which sees it as a challenge to India’s economic aspirations in the South Asian region. Beijing’s growing collaboration with India’s neighbours has created a sense of unease in New Delhi. Like any rising power with global ambitions, China is looking to expand its presence and increase its profile beyond its immediate neighbourhood. Naturally, as China’s influence in Pakistan grows, India is faced with the challenge of managing its relationship with its biggest neighbour and competing to maintain its prominence in the region. With China-Pakistan relations growing, India can do a little about it and it needs to formulate such a balance between its relations with Pakistan and China, so as to fulfil its economic and regional aspirations in the South Asian region.


Indeed one of India’s closest allies, Nepal is not one of the countries India was ever hoped to have a bone with. With China’s Communist Party’s influence growing over Kathmandu, it seems that the two former closest allies are drifting away in ways they have never before. The old ‘roti-beti’ relation between the two nations seem to be falling apart. After all, the ruling Nepal Communist Party 's (NCP) leader Bishnu Rijal on Monday (June 22) called the 'Roti Beti ka Rishta' with India old rhetoric and that it is 'not wise to talk about the Roti Beti relationship'. This statement from one such leader is not something to be merely ignored while analysing the process of how Beijing’s influence over Kathmandu has turned it against its closest ally, India. In June 2020, Nepal passed a new controversial map in its Parliament showing the Indian regions of Lipulekh, Kalapani and Limpiyadhura regions as parts of Nepal. India has strongly objected to this saying that the map is not based on historical facts and are not in accordance with previous agreements. This move by Nepal came after India inaugurated a road that starts from Dharchula in Uttarakhand and runs 80 km to the Lipulekh pass was built by the Border Roads Organisation to help shorten the travel time to reach Kailash Mansarovar in Tibet by about three days each way. An interesting fact which cannot be overlooked regarding this project is that it was in construction from several years but Kathmandu never objected to its construction, and suddenly the objections and criticizing New Delhi over this road happened. It seems like this was all done in a systematic way of showing Kathmandu’s distancing itself away from New Delhi.

Here comes the Chinese factor in all this. In some ways, one analyst in Kathmandu said, China, which poured millions of dollars in Nepal, has gradually encircled the Himalayan nation. Chinese investments in Nepal started to surge from 2008 when Kathmandu switched from a monarchy to a republic in 2008. By 2014, China outranked India in terms of total investment. In 2015-16, China contributed 42 per cent of the total FDI to Nepal. According to the latest available data, China has again surpassed India as the top investor in Nepal in the first quarter of 2019-20 with a total pledge of $ 88 million FDI representing 93 per cent of total committed FDI of $95 million. Britain came next with $ 1.85 million followed by India’s $ 1.76 million. Nepal is also getting a second Chinese cement plant being set up with $ 140 million investment; the first was Hongshi Cement. This increase is also seen in Chinese overseas development assistance where China overtook Indian aid in 2015, growing steadily from $ 19 million in 2010-11 to $ 38 million in 2014-15 as compared to India’s $22 million.

These investments and mega-projects can be seen as Beijing’s yet another attempt to grow its footprint in another South Asian country while being successful in doing so. This has given New Delhi yet another blow from one of its closest allies.


The relations between India and Bangladesh have always been warm and both the nations have been close trade allies and regional partners since the Indo-Pak War of 1971 which resulted in the formation of Bangladesh.

But India has a lot to worry about on this front too. When India passed the controversial Citizenship Amendment Act(CAA), 2020, it received lukewarm criticism from the Bangladesh side too which resulted in cancelled trips and meetings of Bangladesh ministers and officials in India. ‘Bangladesh has always maintained that the CAA and NRC are internal matters of India but I think its totally unnecessary,' said Sheikh Hasina, Prime Minister of Bangladesh.

Going by the negative publicity generated by the anti-CAA protests in India, it would be very easy for anti-establishment forces in Bangladesh to raise a false alarm about the possible exodus into that country from India. Although there is not even a remote possibility of an exodus, it will only take the rumour mills in Bangladesh a few minutes to demolish the friendly relationship that the two countries have carefully cultivated since 1971 against so many odds. Of the three countries named in the CAA, Bangladesh and Afghanistan are good friends with a long and cordial relationship with New Delhi. Bangladesh shares a long border with India and even longer historical and cultural relationship. From an economic and strategic point of view, no other country in the neighbourhood is as important as Bangladesh is to New Delhi. The success of the coveted Look East Act East policy and any regional trade forum in lieu of the Regional Comprehensive Economic Partnership (RCEP) or the furtherance of the BIMSTEC agenda depends heavily on New Delhi’s relationship with Bangladesh.

More importantly, in what has been seen as a ‘blatant act of provocation’, China has invested $38 billion in Bangladesh and supplied Ming-class Type 035B submarines to Bangladesh Navy. Quickly responding to this deal, India has agreed to provide $500 million lines of credit to facilitate the Bangladesh Army to upgrade its defence systems and acquire more military hardware.

While India is working to retaliate to the border violence by China, which claimed the lives of 20 Indian soldiers, through various measures mainly to hurt its economy, Beijing has reached out to Dhaka by offering to waive off 97% tariff on 5,161 items that Bangladesh trades with China. Dhaka had asked for the waiver from China for being a “less developed country”, and Beijing responded favorably on June 16, ironically a day after the Ladakh clash.

“Tariff Commission of the state council of ministry of finance of the People’s Republic of China issued a notice dated on 16 June on granting zero treatment to 97% of tariff products of Bangladesh. This will come into effect from 1st July,” Bangladesh foreign office said in a statement.

The new list adds to Dhaka’s existing benefit of tariff-free trade on 3,095 products with Beijing under the Asia-Pacific Trade Agreement.

These new developments which can lead to Beijing and Dhaka coming closer can add to the woes of India which sees Dhaka as a close ally. New Delhi hasn’t responded to these new developments while focusing on the standoff along LAC, but it cannot keep ignoring these developments for much longer if it wants to keep a hold over its position as Dhaka’s closest ally.


The country of Sri Lanka is in a huge debt trap laid by China and owes a huge amount of money to it. This trap grew stronger with each loan taken by Sri Lanka, especially under the leadership of former President Mahinda Rajapakse, who turned to his Chinese allies for loans and assistance with ambitious port projects, infrastructure development, etc.

Over years of construction and renegotiation with China Harbor Engineering Company, one of Beijing’s largest state-owned enterprises, the Hambantota Port Development Project distinguished itself mostly by failing, as predicted. With tens of thousands of ships passing by along one of the world’s busiest shipping lanes, the port drew only 34 ships in 2012. Then the port was handed over to China after Mr Rajpakshe lost an election in 2015 under huge pressure on the government and authorities.

This is one of many examples of how the Chinese manpower and tactics have left smaller nations in the region with no other choice to surrender in front of Chinese supremacy. The relations between India and Sri Lanka seem to be lukewarm as Sri Lanka struggles to keep a balance between its relations with New Delhi and Beijing. But will it be able to sustain the balance is the major question that comes out of the major picture. India needs to assure Sri Lanka and build up the confidence between the leadership of the two neighbours so as to maintain the balance in the Indian Ocean region where China is trying to increase its dominance like the South China sea region.


Although India and Afghanistan do not share a direct border, Afghanistan is a key factor in regional diplomacy in the South Asian region. As a member of the SAARC and a close partner of India, Kabul’s partnership is crucial for India. Moreover, it is a partner in the Chabahar Port, a joint initiative of India-Afghanistan-Iran, which is the most important port for India to counter the Gwadar Port, which is joint initiative of China and Pakistan.

Over the years, New Delhi has spent billions of dollars in developing infrastructure and providing aid to the war-torn nation of Afghanistan so as to keep its partnership and influence over Kabul under check and both the nation share warm relations altogether. But recent developments have shown that India does not hold much say when it comes to the regional politics of Afghanistan. New Delhi did not have any say in the peace talks between the Taliban and the Afghan government while the US, Russia, Pakistan and China dominated it. This left New Delhi on the outskirts of these talks and after that more was to be seen. The Taliban will now be a major political force in Afghanistan and India is not seen to get along with it so well. With the signing of the peace deal between the United States and the Taliban in late February, the question as to India’s engagement with, or rather estrangement from, the Taliban is being debated more intensely. As the U.S. prepares to withdraw the majority of its forces from Afghanistan by 2021, it is imperative to interrogate the new terms of engagement with the Taliban, India’s understanding of the new political and security landscape in Afghanistan, and whether India is ready for this new change or not.

With the Taliban ready to become a legal political force in Afghanistan, India needs to be ready to engage with it through a set of new policies and reformed diplomatic ties. New Delhi cannot ignore it any longer now. Some of the experts’ opinions say that although not formally, India is having backdoor talks with the Taliban to secure the presence of India in Kabul. Now, more than ever before, the strategic community in India is discussing New Delhi’s position on the peace talks and even urging India to diplomatically engage with the Taliban. Going ahead, India would certainly have to re-evaluate its decisions and be more omnidirectional in its approach to deal with all forces that are central to the future of Afghanistan, where India is still in the quest for a new playbook to protect and promote its interests.


Reports suggest that China is growing its military presence in the Indian Ocean too. Satellite pictures in May this year suggest China’s military base at Djibouti is being modernised. The facility, set up in 2017 as a logistics support unit, is being upgraded into a full-fledged naval base with a 1,120-feet pier that can berth Chinese warships, including the Liaoning aircraft carrier. This follows China’s expansion of an artificial island in the Maldives, a development with seeming strategic overtones, leading some to claim that China is encroaching on India’s sphere of influence. There have been rumours that China is planning on militarizing the Gwadar Port too.

According to an article by Forbes, to counter this move, India has increases its submarines’ presence in the region. Moreover, a high ranking military officer in India has said that the Indian Ocean is not the South China Sea, won’t let China dominate it.


The logic of the Chinese opening so many fronts together is baffling. Reassuringly, it could mean China is overreaching. Less reassuringly, it could mean that rather than displaying strategic coherence, China is now a regime that, like so many authoritarian regimes of the past, is willing to damage itself and the world. Such regimes are always harder to handle because it is not straightforwardly interesting that drives them. Even as we deal with the military situation on the border, the test of India’s resolve will be its ability to return to some first principle thinking about its own power.

The Indian Government needs to reassure its strategic allies in the region and make the most out of its abilities as a democratic and republic nation. While building our relations with the western powers like the US, New Delhi has lost its grip over the region which is used to possess. It is in India’s as well as in the world’s interest that India remains a balanced alternative to China in the region.


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