Subject: International Relations

In recent years, China's economic assertiveness has transformed into a potent tool for expanding its military footprint across Asia, exemplified by its record trade surplus of $190 billion with ASEAN in Q1 2025, raising concerns about regional power dynamics.

Economic Tools of Military Expansion

• Belt and Road Initiative (BRI): China strategically uses infrastructure investments to gain military access, as seen in its $14 billion investment in Sri Lanka (2005-2015) leading to control over strategic ports like Hambantota.
• Debt-Trap Diplomacy: Beijing leverages economic dependencies to secure military advantages, evident in its investments in Nepal's infrastructure including hydropower projects and strategic railway lines.
• Trade Dominance: China's growing trade surplus enables increased defense spending and technological advancement in military capabilities.

Impact on India's Security

• Strategic Encirclement: China's economic investments in India's neighborhood (Nepal, Sri Lanka, Myanmar) create potential military pressure points along Indian borders.
• Maritime Challenges: Chinese investments in port infrastructure threaten India's maritime security in the Indian Ocean Region (IOR).
• Economic Competition: China's trade dominance in ASEAN reduces India's economic influence, affecting strategic partnerships.

India's Response Strategy

• Defense Modernization: India has increased its defense budget to ₹6,81,210.27 crore (2025-26), with 75% earmarked for domestic procurement to counter Chinese military expansion.
• Maritime Initiatives: Launch of ASEAN-India Maritime Exercise (AIME) in 2023 strengthens regional maritime security cooperation.
• Economic Partnerships: Strengthening ties with Quad nations and promoting initiatives like Supply Chain Resilience Initiative (SCRI) to reduce economic dependence on China.

Challenges and Way Forward

• Infrastructure Development: Accelerating projects like Chabahar Port and Bangladesh-Bhutan-India-Nepal (BBIN) initiative to counter BRI influence.
• Defense Capabilities: Focusing on modernizing military infrastructure along the Line of Actual Control (LAC).
• Economic Integration: Enhancing trade relationships with ASEAN through frameworks like Regional Comprehensive Economic Partnership (RCEP).

India's comprehensive response to China's economic-military nexus must balance strategic autonomy with regional cooperation, ensuring security while promoting economic growth. The success of initiatives like Make in India and Atmanirbhar Bharat in defense manufacturing will be crucial in maintaining regional power equilibrium.