India woos smaller neighbours to counter challenge from China
New Delhi moves to counter Beijing's growing economic influence with smaller nations by pledging to fund a raft of regional projects
India pledged a slew of regional investments at a South Asian summit this week, seeking to counter China's growing economic inroads into its backyard as it remains embroiled in bitter rivalry with Pakistan.
Indian Prime Minister Narendra Modi said South Asia's largest economy would fund regional infrastructure, health facilities and even a communications satellite, and promised to free up its markets to exporters in smaller countries in the region.
Modi, who won a landslide election victory in May, has made clear that boosting India's influence in its immediate neighbourhood is a strategic priority for his Hindu nationalist government.
Critics say the previous Congress party government began to take relationships for granted, allowing China - which shares a border with four of India's neighbours - to step into the breach.
But the failure of the South Asian Association for Regional Cooperation to make any significant progress during a two-day meeting underscored the scale of the challenge New Delhi faces.
Cross-border trade among the eight Saarc nations - Afghanistan, Bangladesh, Bhutan, India, Nepal, the Maldives, Pakistan and Sri Lanka - still accounts for less than 5 per cent of total commerce in the region.
"Indians want to keep South Asia as their exclusive sphere of influence," said Sreeram Chaulia, dean of the Jindal School of International Affairs in Delhi.