India is losing its regional primacy as Beijing and Washington move in

India is being denied the uncontested dominance it once held. The task ahead is not to restore the old hierarchy but to find a new path.

Prof. Syed Munir Khasru

South China Morning Post
July 28, 2026

https://www.scmp.com/opinion/asia-opinion/article/3361501/india-losing-its-regional-primacy-beijing-and-washington-move

South Asia is undergoing a gradual but important shift. Smaller states now command a widening array of options, and India’s primacy is quietly giving way. The lesson is clear. Regional leadership can no longer rest on geography and must be sustained through credible and mutually beneficial engagements that compare favourably with the alternatives.

China’s challenge begins at India’s border. Both countries fought in 1962, continue to dispute a frontier of roughly 3,500km and had their deadliest confrontation in decades in the Galwan Valley in 2020. Relations have cautiously normalised but the underlying strategic rivalry remains unresolved.

Economic dependence complicates the rivalry. India imported nearly US$132 billion of Chinese goods in the year ended March, more than from any other country. A government analysis has since reportedly identified about US$51 billion in critical imports that could be replaced by pushing domestic production, partly to reduce reliance on China. Thus, China competes strategically with India while retaining considerable influence over its industrial supply chains.

Pakistan provides the clearest expression of Beijing’s regional strategy. China supplied 81 per cent of Pakistan’s major arms imports between 2020 and 2024. This year, Pakistan commissioned the first of eight Chinese-designed Hangor-class submarines under a US$5 billion programme. It also raised 1.75 billion yuan (US$258 million) through its first yuan-denominated sovereign “panda bond” in China’s market.

Bangladesh, meanwhile, illustrates the risks of tying bilateral relations too closely to one political party. India’s partnership with former prime minister Sheikh Hasina strengthened bilateral cooperation but her fall – her government was deposed after a popular movement in 2024 and her party, the Awami League, banned – exposed the weakness of that approach. Her continued stay in New Delhi does not help India’s relationship with Bangladesh. Consequently, China’s influence is expected to expand.

New Bangladeshi Prime Minister Tarique Rahman’s decision to include China in his first overseas tour carried political weight. In Beijing last month, he met Chinese President Xi Jinping and sought greater cooperation and investment. The visit showed Bangladesh can use its growing ties with China to negotiate with India from a stronger position.

Nepal provides an older warning. In 2015, protests over Nepal’s new constitution left border crossings from India blocked. Although India denied imposing a blockade to exert political pressure over the constitution, many Nepalis blamed it for shortages of fuel, medicine and other essentials. China then provided Nepal with emergency fuel worth 10 million yuan, followed by agreements on transit and transport. It also granted Nepal access to four seaports, ending India’s monopoly over Nepal’s trade routes.

The same competition is visible in Sri Lanka, where China-backed projects include the US$1.4 billion Colombo Port City and US$3.7 billion oil refinery near Hambantota port. Yet India remains equally important, having provided about US$4 billion during Sri Lanka’s 2022 economic crisis and advanced its own energy and connectivity projects. Sri Lanka is not choosing one over the other, but using their rivalry to secure investment, infrastructure and political support.

The Maldives has followed a similar balancing strategy. President Mohamed Muizzu came to power after the “India Out” campaign, sought to remove Indian military personnel and strengthened ties with China, to which the country owed about US$1.37 billion. India later helped avert a default and extended a US$565 million credit line, restoring much of its influence. Yet the scale of effort required to repair the relationship shows Indian primacy can no longer be taken for granted.

China’s expanding position would be less consequential if the United States consistently reinforced India’s regional primacy. Instead, US policy has become more transactional.

Relations deteriorated sharply last year after the Trump administration imposed tariffs of up to 50 per cent on Indian goods over its purchases of Russian oil, while lowering Pakistan’s to 19 per cent. An interim agreement reduced the rate to 18 per cent earlier this year, but a new round of tariffs announced last week added an additional 10 per cent.

Against this backdrop, US Secretary of State Marco Rubio’s recent visit to India was seen as an effort to rebuild ties strained by the trade dispute and America’s closer engagement with Pakistan.

US President Donald Trump has claimed credit for last year’s India-Pakistan ceasefire more than 80 times, saying his intervention averted a war. India rejects this, saying the ceasefire resulted from communication between the two militaries and opposing any third-party mediation. A month after the ceasefire, Trump hosted Pakistan’s army chief Asim Munir at the White House.

Ties deepened further this year, as Foreign Minister Ishaq Dar met Marco Rubio to discuss militant threats from Afghanistan and closer counterterrorism cooperation. Pakistan has also emerged as a mediator in the US-Iran negotiations, positioning itself as a key regional intermediary.

India has reason to read such signals warily. Pakistan helped broker US president Richard Nixon’s 1972 diplomatic opening to Beijing, and in the 1971 India-Pakistan war, the US and China backed Pakistan while India leaned towards the Soviet Union. The circumstances today are very different, but the memory of external powers converging around Pakistan continues to influence Indian strategic thinking.

India is not being isolated from South Asia. It is being denied uncontested dominance over it. The task ahead is not to restore an old hierarchy – it is to depend less on individual governments, listen more closely to public sentiment and respond more generously to the economic priorities and strategic concerns of its neighbours.