South Asia has once again become a scene of competition between major powers, similar to what was seen during the Cold War period. The region occupies a crucial space, which could be seen as a strategic battleground where several influences and interests intersect. With the internal contestations and State-specific rivalries, the region is not only a passive recipient of extra-regional power politics but also becomes actively involved in politico-strategic and maritime dynamics of these powers.
Global politics can be defined in terms of either ‘lopsided multipolarity’ or the emerging ‘bipolarity’. The US is zealously defending the status quo, while China is bidding aggressively to dislodge the US from its predominant position as the singular hegemon and emerge either as a substitute or at least as an alternative to the US in global politics. This contestation is unfolding across the world in different geographies and different issues, and South Asia is no exception. Both powers employ various strategies that either serve their economic interests and extend influence in the region or create the potential for military or political advantages. The region is getting embroiled in a new race between Uncle Sam and the dragon.
On the one hand, the driving force behind China’s approach in South Asia is defined by institutionalised economic persistence. The shift from overt balance-of-power politics to the systematic manoeuvring of trade and defence ties throughout the 1990s and 2000s led to a formalised set-up in 2013, as the Belt and Road Initiative (BRI). Beijing, aided by its vast capital reserves and compliant State-owned enterprises (SOEs), has been making deep inroads in the region, with clear geo-strategic objectives. It constructs economic corridors (CPEC and CMEC), roads, railways, ports, and pipelines to increase connectivity and access to the markets.
Beyond economics, the country has expanded its defence ties. Pakistan is the most visible example of a deep military relationship with China. As per Booz Allen Hamilton’s ‘String of Pearls’ hypothesis, China is acquiring strategic presence at several ports in the region, such as Gwadar and Karachi (Pakistan), Hambantota and Colombo (Sri Lanka), Chittagong and Payra (Bangladesh), and Kyaukpyu (Myanmar). This has given China a broader footprint in the Arabian Sea, the Bay of Bengal, and the Indian Ocean littoral. Beijing has methodologically strengthened its ties through a blend of high-level diplomacy and economic leveraging, though, resulting in a ‘debt trap diplomacy’.
The US has noticed this and has charted out a plan to counter China’s hold in the region. Its policy in South Asia has ranged from deep military to interventions towards leadership changes, to counter-balance China’s growing influence. Under the Trump administration, it has adopted a ‘transactional foreign policy posture’, in which foreign economic assistance is not just regarded as a soft-power tool, but rather as a geopolitical strategy to install favourable political dispensations across the region.
The US’s ‘war on terror’ policy and subsequent withdrawal from Afghanistan had left a gap in the region that China could fill. The realisation of this possibility has prodded the US into efforts to reclaim the space. The US had anchored its Indo-Pacific strategy around India to limit Chinese ingress in the region. But it has realised the limitations of this strategy due to India’s policy of non-interference.
When regimes change
The US and China have institutionalised foreign policy systems, while India’s neighbours have personality-driven, elite-centric politics. Leadership transitions form a crucial part of this structure. In April 2022, Imran Khan was ousted from power for being too independent, pro-China, and pro-Russia. The Rajapaksa government, which also had a pro-China outlook, was toppled a month later. In August 2024, Sheikh Hasina was replaced by pro-US Muhammad Yunus, and, in September 2025, Nepal witnessed the overthrow of K P Oli’s pro-Chinese Communist Party of Nepal (Unified Marxist-Leninist) government. That all the toppled regimes had relatively pro-China positions tells a story.
The US also focuses on alternative financing in the region through institutions like Millennium Challenge Corporation (MCC), Development Finance Corporation (DFC), and Blue Dot Network, to counter China’s growing footprint. In 2023, the US announced a $553 million project for a deep-water shipping container terminal in Sri Lanka. In 2025, the US also came into an agreement with Pakistan to lower tariffs and invest in its oil reserves and minerals.
The US’s port-grabbing exercise is also aimed at increasing strategic depth in the region. It has made a joint military base with the UK on Diego Garcia in the Indian Ocean, and is planning for Pasni (Pakistan) in the Arabian Sea, and ‘Quad Ports for Future’ in the Bay of Bengal. Washington also has regaining the Bagram airbase in Afghanistan as a top priority.
It can be argued that the ongoing strategic competition between the US and China in South Asia has irrevocably transformed the region into a battleground for a new Cold War. Thus, India has to hone its regional diplomacy for global gains. Apart from economic development and political stability, India’s primary objectives are countering terrorism, curbing insurgency, and defying religious fundamentalism. All these internal security threats emanate from its neighbourhood and are supported by invisible, extra-regional powers.
The increasing US-China contestation in the region has impinged upon New Delhi’s foreign policy choices. India must avoid entrapment in this great-power rivalry and play a delicate balancing act to safeguard against emerging security threats. It should also aim to promote a rule-based and just world order along with a free and open Indo-Pacific region. India has to align with the extra-regional powers in a way to protect its regional dominance and strategic autonomy, and ensure an inclusive, liberal, and democratic South Asia.
(The writer is a professor at the School of International Studies, JNU)
(Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.)