In the shifting geopolitics of South Asia, a region long considered India’s natural sphere of influence, Beijing’s steady diplomatic gains have become impossible to ignore. From Kathmandu to Colombo, from Thimphu to Dhaka, China’s presence is now deeply woven into the region’s economic aspirations and political recalibrations. India, despite its geographic centrality and cultural affinity with its neighbours, finds itself struggling to match China’s momentum. Understanding why this is happening requires looking beyond simplistic binaries or familiar narratives of “chequebook diplomacy.” The story is deeper, more structural, and ultimately tied to India’s strategic choices, domestic challenges, and an often outdated diplomatic posture.
At the heart of the matter lies India’s hesitation to fully embrace its role as a regional economic engine. While China has spent the last two decades deploying its vast capital through the Belt and Road Initiative, Asia Infrastructure Investment Bank, and a slew of bilateral loans, India’s economic engagement with South Asia has remained cautious and fragmented. For smaller economies in the region, many of which are desperate for infrastructure, energy, and connectivity, China offers what India cannot: scale, speed, and a clear economic proposition. The result is that highways in Pakistan, ports in Sri Lanka, energy grids in Nepal, and industrial zones in Bangladesh increasingly carry Beijing’s imprint.
To be fair, South Asian states are not blind to the risks of overdependence on China. The troubled trajectory of Sri Lanka’s Hambantota port, often cited as an example of debt distress, has become a cautionary tale for governments across the region. Yet even with these concerns, South Asian capitals continue turning to China because the alternatives are either insufficient or too slow. India’s bureaucratic pace, coupled with limited financial bandwidth, has left it unable to compete head-on. While New Delhi has found success in delivering small to medium-scale development projects, these are rarely transformative enough to shape national political narratives in the way Chinese megaprojects do.
Another factor eroding India’s diplomatic advantage is the perception, sometimes exaggerated, sometimes earned, that New Delhi behaves like an overbearing elder sibling. The term “big brother attitude” surfaces with regularity in political debates across Nepal, Bangladesh, and Sri Lanka. Much of this resentment stems from past grievances: trade restrictions, border disputes, perceived political meddling, and asymmetries in river-water agreements. Even when India means well, its actions are sometimes communicated or implemented in ways that fuel suspicion. Smaller states often find India’s proximity more intimidating than reassuring.
China, by contrast, benefits from being the distant power with no shared borders and fewer historical complications. Beijing’s rhetoric, centered around “win-win cooperation” and “non-interference”, is crafted to appeal to nations wary of hegemonic behavior. Whether China lives up to those principles is another matter, but the diplomatic packaging is effective. In many cases, China’s ability to provide large-scale economic incentives allows it to sidestep complicated political conversations altogether. For governments under domestic pressure, this is often a welcome relief.
Domestic politics within India also shape its external limitations. India’s strategic bandwidth has become increasingly absorbed by internal polarization, economic recalibration, and border tensions with China itself. The ongoing military standoff in Ladakh has heightened New Delhi’s security anxieties and diverted diplomatic energy. Meanwhile, India’s aspiration to become a global power through forums like the Quad or partnerships with the West has sometimes come at the cost of regional attentiveness. Smaller South Asian states often complain privately that India looks past them rather than at them, especially when New Delhi’s focus shifts to countering China at the global stage.
Ultimately, the question is not why India is losing to China in South Asian diplomacy, but how India can regain its footing by reimagining its role. China’s rise in the region reflects not just Beijing’s ambition but also New Delhi’s missed opportunities. If India chooses to act boldly economically, diplomatically, and politically it can not only reclaim influence but reshape the future of South Asia on its own terms. The region is not turning away from India; it is simply waiting for India to show up with the vision and humility that the moment demands.
Moreover, India’s economic slowdown in the past decade has diminished its ability to project influence through trade and investment. While India remains the largest economy in South Asia, its capacity to act as a regional growth driver is still below its potential. Policies such as sudden export bans on essential commodities have also damaged trust, particularly in countries like Nepal and Bangladesh. When governments in the region feel economically vulnerable, they naturally diversify their partnerships and China stands ready to fill any vacuum.
Yet it would be misleading to suggest that China’s rise in South Asia is inevitable or that India’s position is irreversibly in decline. In recent years, New Delhi has taken steps to recalibrate. India’s Line of Credit programmes have expanded; connectivity projects like the India-Bangladesh rail links and the India-Nepal cross-border petroleum pipeline have shown that India can deliver efficiently when political will aligns with strategic vision. India’s vaccine diplomacy during the early phase of the Covid-19 pandemic was widely appreciated, showcasing the country’s capacity for meaningful and compassionate leadership.
Still, these successes are not enough to offset structural disadvantages unless India adapts its diplomatic philosophy. First and foremost, New Delhi must embrace a more cooperative rather than protective stance toward South Asia. This means recognizing that influence is earned, not assumed. India’s neighbours want partnerships founded on respect for sovereignty, predictability in commitments, and sensitivity to domestic political contexts. The days when South Asian relationships could be managed through personal rapport between leaders are long gone; today’s diplomacy demands institutional strength, continuity, and clarity.
India could also benefit from aligning its regional diplomacy with its own economic reforms. If New Delhi accelerates domestic infrastructure, manufacturing capacity, and investment flows, it will naturally become a more attractive partner. Its large market remains a massive asset— something China cannot replicate in South Asia; but market access must be made predictable and strategically targeted. India’s soft power, too, continues to be formidable, from Bollywood to yoga to its democratic credentials. These strengths, however, require consistent nurturing and must be accompanied by goodwill on the ground.
The region’s political elites are increasingly pragmatic; they seek balanced relationships rather than exclusive alignments. This means that India’s goal should not be to outbid China project by project. Instead, India must offer what China cannot: sustainable partnerships, transparent development, cultural familiarity, and truly reciprocal diplomacy. Such an approach requires patience, confidence, and a willingness to view South Asian neighbors as equal stakeholders.
Ultimately, the question is not why India is losing to China in South Asian diplomacy, but how India can regain its footing by reimagining its role. China’s rise in the region reflects not just Beijing’s ambition but also New Delhi’s missed opportunities. If India chooses to act boldly economically, diplomatically, and politically it can not only reclaim influence but reshape the future of South Asia on its own terms. The region is not turning away from India; it is simply waiting for India to show up with the vision and humility that the moment demands.
