In brief
Amid regional turbulence and competition with China, India is leveraging its robust economy to strengthen ties with neighboring countries, offering substantial financial assistance to bolster its geopolitical influence.
Prime Minister Narendra Modi of India is strategically using the country’s growing economic strength to expand its influence over regional neighbors, presenting India as a formidable contender against China's regional dominance. Following economic turmoil in countries such as Sri Lanka, where India extended over $4 billion in aid during its 2022 economic crisis, and Bhutan, where aid was increased to $1 billion, India continues to deepen its economic ties within South Asia.A recent engagement with the Maldives, where India facilitated over $750 million in currency swaps to alleviate fiscal stress, exemplifies this approach. The Maldives' new president, Mohamed Muizzu, despite previous 'India Out' rhetoric, acknowledged India's pivotal role in his nation’s infrastructure and socio-economic development.India's growing economy—expanding at 7% according to the World Bank—presents it as an appealing partner for regional development and trade, despite existing bureaucratic challenges. This fiscal muscle aids Prime Minister Modi's geopolitical strategy to counterbalance China's established dominance and forge stronger diplomatic and economic alliances.
