India Guards Against China's Encroaching Shadow

8 MINS READNov 9, 2018 | 09:00 GMT
Indian Prime Minister Narendra Modi, left, shakes hands with Chinese President Xi Jinping on Sept. 4, 2016, in Hangzhou, China.

Indian Prime Minister Narendra Modi, left, meets with Chinese President Xi Jinping on Sept. 4, 2016, in Hangzhou, China. Beijing's economic expansion into South Asia poses a major strategic challenge for India as it seeks to maintain its regional dominance against its northern rival.

(WANG ZHOU - Pool/Getty Images)
  • India and China's recalibration will endure in 2019 as New Delhi focuses on national elections and China focuses on managing pressure from the United States.
  • China's support for Pakistan, its military buildup along its periphery and its dispute with India over their border will continue to drive the Sino-Indian rivalry in 2019.
  • India will seek to deepen its influence by emphasizing its engagements on varying levels with its neighboring states in South Asia and the Indian Ocean.

Editor's Note: This assessment is part of a series of analyses supporting Stratfor's upcoming 2019 Annual Forecast. These assessments are designed to provide more context and in-depth analysis on key developments in the coming year.

India is the dominant country in South Asia, accounting for the majority of the region's landmass (68 percent), population (75 percent) and economic output (79 percent). These disparities have informed India's status as South Asia's reigning hegemon in the decades since it gained independence from the British Empire in 1947. Today, however, India's dominance is being challenged by China. Beijing's economic expansion into South Asia under its vast Belt and Road Initiative is meeting the infrastructure demands of India's neighboring countries and providing them with access to deep pools of capital in a way that New Delhi cannot match.

For emerging markets such as Nepal, Bangladesh, Sri Lanka and the Maldives, Chinese-funded projects are too enticing to pass up, even if they come with steep price tags that add to the debt burdens of these developing countries. Still, the infrastructure race isn't India's only challenge: China is boosting its military responsiveness along its periphery, including in Tibet and Xinjiang, the two provinces that border South Asia. China's defense buildup, in turn, is pushing India to pursue its own infrastructure and military expansion to prepare for a conflict with China, however unlikely such a conflict might be. Because India wants to protect its status as South Asia's hegemon against Chinese expansion, the broad contours of the strategies it will employ in the year ahead to achieve this overarching goal are evident.

The Big Picture

China's economic expansion into South Asia poses a major strategic challenge for India as it seeks to maintain its regional dominance. India and China are currently in a thaw after last year's Doklam standoff, but the Sino-Indian competition will quietly play out in the neighborhood and across the Indian Ocean as the world's two most populous countries jockey for military advantage and seek to protect their shipping routes.

China and Pakistan: The First Priority

China. China is India's principal strategic rival in Asia. For Indian Prime Minister Narendra Modi, New Delhi's ongoing diplomatic recalibration with China is aimed at avoiding a politically costly confrontation similar to last year's Doklam border standoff as the 2019 general elections draw near. For Chinese President Xi Jinping, his preoccupation with the United States as Beijing's main foreign policy challenge means that he, too, will seek calm with India in 2019, even as their rivalry persists. The 21st round of India-China border talks, set for Nov. 23-25, will help signal where the relationship is headed as the new year approaches. Additionally, India refuses to support the Belt and Road Initiative, since the initiative's China-Pakistan Economic Corridor crosses through the disputed territory of Kashmir. Another sign to watch for is Sino-Indian cooperation under Beijing's proposed "two-plus-one" mechanism, which allows India and China to hold joint talks with another South Asian country, though cooperation is more likely to advance in the diplomatic realm and in trade than on big ticket infrastructure projects.

Pakistan. Pakistan is India's principal military rival in South Asia. Born from the ashes of the British Raj alongside India during the partition of 1947, Pakistan's rivalry with India has lasted over 70 years, has included four wars and is driving a nuclear arms race. In Indian-administered Kashmir, the collapse of the alliance between Modi's Bharatiya Janata Party and the People's Democratic Party in June paved the way for central government rule. For Modi, this change in rule will signal a return to a military-centric approach designed to pressure Pakistan ahead of the 2019 elections. After the voting is done, however — and given that Pakistan's own elections took place in July — the two countries probably will rekindle their long-dormant negotiations on Kashmir, the disputed territory each country claims in full. Akin to the Sino-Indian recalibration, Pakistan wants to bring tensions to a more manageable level with India.

A map showing the strategic importance of the countries that neighbor India in South Asia and the Indian Ocean.

Bhutan, Nepal and Bangladesh: The Northeast Quadrant

Bhutan. Because India borders Pakistan and China, its key military threats are land-based. For this reason, Nepal and Bhutan are strategically significant buffer states between India and China. India has an opportunity to reaffirm its relations with Bhutan after the October election of the Druk Nyamrup Tshogpa party under Prime Minister Lotay Tshering. Bhutan already receives the lion's share of India's foreign aid — much of which goes to support Bhutan's hydropower sector — but New Delhi probably will increase its funding in 2019. The key event to watch is the China-Bhutan border talks (India and Bhutan are the only two countries sharing a disputed land boundary with China). India wants to prevent Bhutan from ceding its Doklam Plateau to China, which would give Chinese troops parity with Indian troops overlooking the Chumbi Valley.

Nepal. The focus of India's engagements with Nepal in 2019 will be infrastructure. New Delhi reportedly has made progress on 16 of 21 points of bilateral cooperation at Kathmandu's request as part of a reset in relations between Modi and Nepalese Prime Minister Khadga Prasad Oli. In 2019, the key projects to watch include the Arun III hydropower dam, the Raxaul-Bihar railway and the development of inland waterways facilitating trade for Nepal, a landlocked country relying on India's port of Kolkata. New Delhi will also avoid pressing Nepal on the issue of constitutional reform involving the Madhesi, an Indian-origin ethnic group residing mostly in southern Nepal. Modi is recalibrating New Delhi's approach toward Nepal to try to blunt anti-Indian sentiment, which sharpened after a 2015-16 blockade that India was widely blamed for supporting.

Bangladesh. Bangladesh, home to 166 million people, functions as a land bridge linking the Indian mainland with its far-flung northeastern wing and with Myanmar. Prime Minister Sheikh Hasina spent the year grappling with the influx of 700,000 Rohingya refugees after Myanmar launched a crackdown against them last year in neighboring Rakhine state. Domestically, Bangladesh is gearing up for what promises to be another controversial election in December as Begum Khaleda Zia, a former prime minister and leader of the opposition, was sentenced to a decade in prison on graft charges in a blow to her Bangladesh Nationalist Party. Although a victory by the ruling Awami League — in power since 2009 — would work in Modi's favor, given the relatively harmonious relationship between him and Hasina, he will move to strengthen relations with whatever political order emerges in Dhaka to shore up India's influence, especially given that Bangladesh is a signatory of the Belt and Road Initiative.

The Indian Ocean Islands

The Maldives. The two biggest political crises to erupt along India's periphery in 2018 took place in the Maldives and Sri Lanka. In February, Maldivian President Yameen Abdul Gayoom declared a state of emergency after the nation's Supreme Court overturned charges against nine political opponents, including the exiled pro-Indian former president, Mohamed Nasheed. In September, however, the electorate delivered a stinging rebuke to Yameen by handing his opponent, Ibrahim Mohamed Solih, a 16-point victory in the presidential elections. For India, Solih's victory along with Nasheed's return will offer an opportunity for a course correction through increasing diplomatic and military exchanges (though this won't preclude further engagement with China given the Maldives' need to balance against India).

Sri Lanka. Sri Lanka's Colombo port is the Indian Ocean's major transshipment hub for maritime traffic passing between the Strait of Malacca in Southeast Asia and the Strait of Hormuz and Bab el-Mandeb strait in the Middle East. On Oct. 26, President Maithripala Sirisena abruptly replaced Prime Minister Ranil Wickremesinghe with Mahinda Rajapaksa, the pro-China former president. The ouster points to a potential setback for New Delhi, but India will avoid coercive measures in shaping Sri Lankan politics for fear of further pushing Colombo into Beijing's orbit. (Last year, Sri Lanka signed over a majority stake in the Hambantota port to a Chinese state-owned firm.) Instead, it will focus on establishing good relations with whatever government emerges. Key projects to watch include the Mattala airport, the Trincomalee port and a 40,000-home project in Jaffna.

Mauritius, the Seychelles and the Andaman and Nicobar Islands. India is the largest of all the Indian Ocean economies, and its increasing reliance on seaborne trade is compelling it to assert its naval influence across that ocean to counterbalance China's growing maritime presence. As a result, the strategic significance of the Seychelles and Mauritius, as well as India's own Andaman and Nicobar Islands, will increase. In the Seychelles, New Delhi will push to revive a deal to gain a 20-year lease on Assumption Island to monitor the Mozambique Channel. It will similarly push a raft of infrastructure projects in Mauritius, including port facilities on Agalega island. Finally, New Delhi's push on Andaman and Nicobar Islands will focus on developing 10 priority projects, including a planned transshipment hub at Campbell Bay.

Article Search

Copyright © Stratfor Enterprises, LLC. All rights reserved.

Stratfor Worldview


To empower members to confidently understand and navigate a continuously changing and complex global environment.