The deterioration of India–China relations: the battle for influence in South Asia

India and China have long viewed each other’s global aspirations with suspicion. While their proximity makes them economically intertwined, their histories and geopolitical agendas have made their relationship fraught with distrust. India hopes for a multipolar international order in which New Delhi has a strong voice. Beijing wants to be a counterbalance to the US and for all its neighbours to fall in line. As Beijing works to achieve this aim, India will use its influence to weaken Chinese dominance.

India–China economic relations

Despite being at a diplomatic impasse, India and China have remained strong economic partners. However, India faces a substantial trade deficit with China, making New Delhi more dependent on the economic partnership. This has led to efforts by Indian President Narendra Modi to curb the country’s economic dependence on China. This was reflected by Modi’s decision to join the Biden administration’s Indo-Pacific Economic Framework for Prosperity (IPEF) after leaving the Regional Comprehensive Economic Partnership (RCEP). More recently, at the 2023 G-20 New Delhi summit, Modi signed a plan for the India–Middle East–Europe Economic Corridor (IMEC), aimed at increasing economic integration between Asia and Europe.

Tensions between Washington and Beijing are also making foreign investors in China look elsewhere. India’s close relationship with the US and rapidly expanding economy makes it an attractive alternative. For example, Foxconn’s recent decision to invest in India is seen as a way to limit dependence on the Chinese market.

While China’s economy is significantly larger with a valuation of US$15 trillion compared with India’s US$3.5 trillion economy, China’s economic growth is on shaky ground amid low consumer spending and a property crisis. Meanwhile, India has the fastest growing large economy in the world.

India–China border disputes

While India–China relations have long been characterised by mutual suspicion, the 2020 fatal skirmishes between Indian and Chinese forces in the disputed Galwan Valley served as a tipping point. During the skirmishes, China claimed a portion of territory previously controlled by India. In October 2023, Beijing and New Delhi agreed to maintain peace along the disputed border. However, deep-seated disagreements over the region persist.

While some analysts have predicted an India–China détente, recent developments point to protracted tensions between the countries. The Chinese People’s Liberation Army (PLA) has increased its troop count at the border while also strengthening its military infrastructure. On top of this, Indian and Chinese officials remain very far apart in terms of envisioned solutions to the border disputes.

India–China relations and geopolitics

Over the years, China has grown increasingly assertive over its interests in South Asia. China’s economic and military strength has empowered Beijing to strengthen its global influence while disregarding the sovereignty of other countries. Beijing’s geopolitical aspirations extend far beyond South Asia as they work to propel China to becoming a global superpower and counterbalance to the US. This was displayed earlier this year when China brokered the Saudi–Iranian rapprochement. However, Beijing has recently focused attention on establishing influence in South Asia at the expense of India’s influence in the region. This is seen as a threat to India, and New Delhi is working to maintain its status as a South Asian leader.

Over the years, China has invested billions of dollars into South Asian countries that have traditionally relied on economic, political and security relations with India. Many analysts see this as part of China’s ‘debt trap diplomacy’.

For example, Beijing’s investment into the development of Sri Lanka’s Hambantota Port was contingent on majority ownership being granted to a Chinese firm. A report from a US-based institute specialising in foreign aid known as AidData indicated that Beijing has long-term plans to convert this port into a Chinese naval base. Similarly, Chinese investment into the construction of Pokhara International Airport in Nepal led to a Chinese firm establishing control over the airport.

The Chinese Communist Party (CCP) is also establishing relations with political parties in South Asian countries. In the Maldives, pro-Chinese candidate Mohamed Muizzu emerged the victor in the recent presidential election. Muizzu is set to take office on 17 November 2023. Recent developments also indicate increased co-operation between Bhutan and China. In a meeting, Bhutanese officials agreed to China’s stance on the strategic Doklam region, to the detriment of India. On top of this, Beijing continues to deepen ties with Pakistan and recently signed a contract with the Taliban to extract minerals in Afghanistan.

Beijing’s efforts to assert influence over South Asia are not going unchallenged by New Delhi. While India struggles to match the capital invested by China, New Delhi has increasingly facilitated co-operation between its allies and South Asian countries. For example, New Delhi encouraged investment from Japan into Sri Lanka and worked with the US to strengthen electricity connectivity between Nepal and India. However, India is still engaging with its regional partners directly. Just this month, Modi and Bangladeshi Prime Minister Sheikh Hasina announced India-assisted investments into new railway links and a thermal power plant unit in Bangladesh. The deepening of economic co-operation is accompanied by an increase in India’s diplomatic footprint with its South Asian neighbours as visits from Indian politicians and diplomats have increased.

India-China relations and propaganda

The competition for influence in South Asia between Beijing and New Delhi is also carried out through disinformation and propaganda campaigns. Indian intelligence officials have uncovered attempts from Beijing to mobilise pro-China views through posts on social media platforms including X, Facebook, Instagram, YouTube, and Reddit. On top of utilising social media accounts, the CCP has funded news sites and think tanks to spread Beijing’s talking points.

Evidence has emerged that the Indian news source, NewsClick, has links to the CCP. American businessman Neville Roy Singham has been accused of facilitating the transfer of funds from Beijing to the news site.

Propaganda campaigns organised by Beijing aim to discredit India’s global standing. Common narratives disseminated by pro-Beijing outlets include accusations that India oppresses minority groups as well as critiques of New Delhi’s diplomatic posture. Following the G20 Summit in New Delhi, propaganda campaigns centred around the absence of Xi Jinping and Vladimir Putin, arguing it reflected New Delhi’s inability to lead. Leading up to the summit, China released maps that displayed parts of India as under the control of Beijing. All of this is part of Beijing’s plan to make India appear weak.

New Delhi has directed significant attention to mitigating the impact of Chinese propaganda and disinformation campaigns in the country. In October 2023, 46 employees of NewsClick had their homes raided by New Delhi police as part of an investigation. Following questioning, two were arrested. Efforts to curb Chinese propaganda predate this. Since 2020, India has banned a long list of Chinese applications, including TikTok, and the Indian army has had a post to address information warfare titled ‘Director General Information Warfare’.

New Delhi’s response to Beijing’s propaganda campaign is not solely defensive. In the past, New Delhi has used its resources to spread pro-India, anti-China narratives. Asian News International (ANI) is widely seen as a propaganda machine for New Delhi. The news site often critiques the CCP’s ‘wolf warrior diplomacy’. A report from the EU DisinfoLab found that ANI quoted fake experts when reporting on Pakistan and China. The battle to control the narrative is at the centre of the competition between Beijing and New Delhi.


India and China are competing for influence in South Asia. While Beijing’s aim is to emerge as the leader of Asia, India wants to ensure that it does not become a chess piece for a great power. India’s inability to match China’s economic and military strength has forced New Delhi to rely on its allies, especially the US, to compete with China. New Delhi and Washington share an interest in weakening Beijing. However, New Delhi envisions a multipolar world where India is a leader, rather than a bipolar world where it follows the lead of the US. As the battle for influence over South Asia continues, New Delhi has a difficult path to navigate to avoid getting trapped between two great powers.

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