India’s emergence stokes anti-India sentiment across South Asia.
Over the past year, “India out” sentiments have surged in Maldives, Sri Lanka, Bangladesh, Nepal, and Pakistan, sparking political upheavals. In Maldives, Sri Lanka, and Nepal, these have led to government changes; in Bangladesh, to violent protests. Meanwhile, Myanmar remains too unstable to gauge who holds power.
Such instability in the neighbourhood would typically concern any government in Delhi, but the Modi government remains steady, supported by stable economic growth through infrastructure and government investment. Private sector investments lag, however, holding back growth from reaching 10-12%. Nevertheless, this trajectory is a clear improvement over the 3-5% growth seen under Congress's inward-focused policies.
The most serious threat to India is the violent political shift in Bangladesh, likely influenced by foreign interests. With Bangladesh heavily reliant on India for essentials like food, fuel, and electricity, it’s unwise for Dhaka to strain relations with India. The Maldives learned this when it returned to a pro-India stance after economic pressures affected its tourism industry. Sri Lanka, too, should take note: it received a $4 billion loan and aid from India only four years ago, helping it recover from severe economic mismanagement. Yet, its new president has adopted an “India out” position, which experience suggests may not last long.
Nepal’s frequent government changes make it hard to establish political stability. Despite significant Indian investment and two million Nepalis working in India, China’s financial enticements remain tempting. However, even pro-China leaders in Nepal cannot afford to sever ties with India.
Smaller South Asian countries are often drawn to China’s financial promises, though at a high cost. Pakistan’s example looms large: despite a $54 billion Chinese infrastructure investment, it now faces economic ruin. For most, China’s money is initially enticing but ultimately alienating. Bangladesh’s new rulers, in particular, must recognize the limits of external influence, as their country’s fate is tightly bound to India.
The Indian economy, at $4 trillion, is not matched by China's $17 trillion. The latter has more cash to spare and endless military buildup to intimidate smaller nations in China Sea area and to some extent in Indian Ocean Region. Certain inherent influence peddling by the Chinese, along with high interest rates on cash disbursed, has irked most countries, except for the China influenced countries like Pakistan. They easily fall prey to the cash offered. Countries only realize their folly when repayments are due.
India does not offer free and easy cash nor promises high prosperity. India offers instead a steady growth with mutual business and national interests served, and a bailout if you get into financial trouble, as Sri Lanka did. As India's economy grows, more cash will become available, but unlike China, there is no easy access to cash.