In brief
Facing regional instability, India is deploying its economic prowess to forge strong alliances with its neighbors, countering China's dominance.
Prime Minister Narendra Modi is capitalizing on India’s robust 7% economic growth to exert influence in the region as neighboring countries grapple with economic or political turmoil. In light of China's growing reach, India has ramped up aid efforts, surpassing $4 billion to support Sri Lanka during its 2022 economic crisis, doubled aid to Bhutan in 2024 totaling $1 billion over five years, and directed substantial funds toward infrastructure projects in Bangladesh before political upheavals altered its leadership landscape in August.The Maldives serves as the latest frontier in this strategy. Newly elected President Mohamed Muizzu transitioned from previous anti-India rhetoric to acknowledging India's crucial role in Maldives’ development. His recent visit to New Delhi saw India extend $750 million in aid to address Maldives' dire fiscal challenges. President Muizzu lauded India as a "key partner," reflecting a shift towards cooperation with India.India's economic expansion, in contrast to China and other regional powers struggling post-pandemic, positions it as an appealing partner for trade and economic agreements. Despite bureaucratic barriers, global business leaders see promise in India's uncapped growth potential, reinforcing its leverage in regional dynamics.
