INTRODUCTION

Asia has become a new battleground for global power rivalry, resulting in an increased
geostrategic and geopolitical significance for South Asia. Major powers are actively
establishing extensive connectivity routes and alternative networks to gain an advantage over
each other. At the same time, these dominant nations are attracting smaller, less developed
South Asian countries through loans, grants, and various forms of support to promote
infrastructure development and economic advancement. In this context of geopolitical,
geostrategic, and geo-economic competition among global powers, smaller South Asian
nations are caught in a complex web. Rich in maritime trade routes, natural resources, and
political diversity, Southeast Asia is not only central to regional connectivity but also a
battleground for influence between India and China. These two Asian giants, each with their
own historical legacies, economic ambitions, and strategic doctrines, are actively shaping the
contours of regional order.

India’s engagement with Southeast Asia has evolved significantly since the end of the Cold
War. The launch of the Look East Policy in the early 1990s marked a strategic reorientation in
Indian foreign policy, aimed at integrating more deeply with East and Southeast Asian
economies. In the early 1990s, the SEA emerged as a priority area of India`s foreign policy
and the shift in its SEA policy has spelled out in the various measures undertaken by New
Delhi to connect with ASEAN region. Even the policy posture adopted by India towards this
ASEAN region has further witnessed the several trends. Starting with development of trade
and investment linkages with the ASEAN region, the policy posture has been transcended on
deeper ties and more consultation on security issues. With her military-security power
projection through naval deployments and maritime diplomacy, India has also moved into
wider EA and Asia Pacific region. From the inclusion of new members in ASEAN orbit in
mid 1990s, thus India`s ASEAN policy not only broadened its engagement from economic
issues to security cooperation but also envisages up-lifting of its NER through multiple
connectivity projects. So, it can be seen that the scope of its policy has been expanded from
maritime to continental. Due to the growing convergence of economic and security interests
between India and ASEAN countries has also transcended its policy framework to set-up as a
balancer in SEA region as seen by the smaller SEA states that India could provide security
vis-à-vis China in this region.
India's Act East Policy aims to bolster relations with the Association of Southeast Asian
Nations (ASEAN). The nation's strategic interests focus on maintaining freedom of
navigation in the South China Sea and countering China's influence. India's participation in
regional platforms such as the East Asia Summit and the Quad demonstrates its dedication to
a rules-based framework in Southeast Asia. Furthermore, India has intensified military
collaboration with Southeast Asian nations, engaging in naval exercises like SIMBEX with
Singapore and conducting coordinated patrols with Indonesia. Additionally, India's defense
exports to Southeast Asia have risen as part of its strategy to counterbalance China's presence.

China continues to maintain a robust economic influence in the region, serving as the primary
trading partner for numerous Southeast Asian nations and making substantial investments in
infrastructure projects through the Belt and Road Initiative (BRI). Countries such as
Malaysia, Thailand, and Indonesia have benefited from considerable Chinese funding across
various sectors, including railways and ports. Additionally, through initiatives like the Asian
Infrastructure Investment Bank (AIIB), China provides development loans and assistance,
although these are frequently designed with strategic considerations in mind.

In contrast, while India's economic presence is less pronounced than that of China, it is on the
rise. India has entered into trade agreements with ASEAN and has invested in infrastructure
initiatives such as the India–Myanmar–Thailand Trilateral Highway to improve connectivity.
This outreach is intended to diversify India's trade partnerships and lessen its dependence on
China. Furthermore, India offers capacity-building support and development aid that
emphasizes human resource development, healthcare, and education, with its approach often
perceived as more benign and collaborative.

Research Questions

The central questions that this research aims to address is: How effective is India’s policy
towards Southeast Asia in the context of strategic competition with China?

To explain more following questions were looked

  What are the historical and strategic drivers of India’s engagement with Southeast
Asia?
 What changes were made in the India`s policy over the time to the region?
 How does China tries to assert its influence in the region particularly through its
economic might?
 How does politics of infrastructure by India and China influence the region?
 How India could use southeast nation to counter China in Indo-Pacific ocean?
 Can India offer a compelling strategic alternative to China?
 What challenges India needs to address to counter China and rejunuvate its image in
the region

RESEARCH METHODOLOGY

This research utilizes a qualitative methodology grounded in political analysis and

international relations theory. It employs a case study framework to examine India's
developing policy towards Southeast Asia in light of China's growing regional influence.

The study relies on both primary and secondary sources, including official documents, policy
papers, speeches, multilateral declarations (such as ASEAN summits), and scholarly articles
from peer-reviewed journals and think tanks. The theoretical framework incorporates aspects
of neorealism to elucidate strategic competition and power balancing, alongside hedging
theory to reflect the complex responses of Southeast Asian nations.

The cases of Vietnam, Myanmar, and Indonesia are analysed to understand how these
countries interact with both India and China. Detailed study of infrastructural projects by
India and China in these nations and how they shape the image of both nations in the region
is being analysed.
THESIS OBJECTIVE

The thesis has the following objectives fulfilled under this paper

 Analyse the evolution of India’s Look East and Act East policies in relation to
Southeast Asia.
 Examine China’s strategic behaviour and its implications for India’s foreign policy.
 Explore the response of ASEAN and individual Southeast Asian states to the India–
China competition.
 Provide policy-relevant insights into how India can strengthen its regional presence.

This study is significant in the context of the Indo-Pacific discourse and broader shifts
in the global order. While the rise of China has been extensively studied, India's role
as a balancing or competing power in Southeast Asia remains under-examined in
strategic literature. Understanding this dynamic is crucial not only for regional peace
and development but also for the future of multilateralism and rules-based order in
Asia

STRUCTURE OF THE THESIS

The thesis has been divided into the following chapters

 Introduction

 Literature Review and Theoretical framework

 Importance of South East Asia

 Evolution of India`s policy towards Southeast Asia
i) Achievements
ii) Challenges

 Geopolitics of Infrastructure between India and China

i) Case study of Vietnam
ii) Case study of Cambodia
iii) Case study of Myanmar

 Indo Pacific Saga: opportunity and challenges for India

 Way forward

 Conclusion
Politics of Infrastructure

The politics of infrastructure in Southeast Asia is a multifaceted arena where economic

ambitions, geopolitical strategies, and domestic governance converge. Infrastructure—
spanning transportation, energy, telecommunications, and urban systems—is a cornerstone of
the region’s rapid development, driving trade, investment, and connectivity. State-led
projects, such as Indonesia’s maritime highways or Vietnam’s industrial zones, are often
wielded as tools for economic growth and political legitimacy, yet they frequently spark
controversies over corruption, environmental degradation, or community displacement.
Geopolitically, Southeast Asia’s strategic position attracts competing powers like China,
through its Belt and Road Initiative, and the U.S., Japan, and EU, with initiatives like the
Partnership for Quality Infrastructure, creating a complex landscape of funding and influence
that nations navigate to balance sovereignty and development needs. Domestically,
infrastructure serves as a vehicle for patronage, with political elites using projects to reward
allies or bolster electoral support, while mismanagement or social costs can ignite public
backlash, as seen in Myanmar’s resistance to Chinese-backed dams. Regionally, ASEAN’s
connectivity initiatives, like the ASEAN Connectivity 2025 Master Plan, aim to integrate
transport and energy networks but face hurdles from differing national priorities and
inequalities between wealthier and poorer member states. Environmental and social conflicts
further complicate the landscape, with projects like Cambodia’s Mekong dams fueling
debates over sustainability and livelihoods, while the rise of digital infrastructure introduces
new tensions around surveillance, security, and technological dependence. Ultimately,
infrastructure in Southeast Asia is not merely a technical pursuit but a deeply political one,
shaping power dynamics, regional integration, and the region’s path toward equitable and
sustainable development.

The primary aim of this chapter is to examine the complexities of infrastructural investments
undertaken by India and China in Cambodia, Myanmar, and Vietnam (CMV), emphasizing
the potential variances in their methodologies and the geopolitical elements that affect these
investments. These three nations have been selected for this analysis due to their strategic
importance in the region and the significant ongoing infrastructural initiatives involving both
India and China. By engaging with New Delhi and Beijing, CMV aspires to attract foreign

n investment, enhance infrastructure, and promote economic development, thus furthering

their overarching development objectives and improving connectivity within the Association
of Southeast Asian Nations (ASEAN). The research methodology for this study primarily
consists of an examination of infrastructural projects funded by India and China in the CMV
countries from 2017 to 2023. For this paper, the author has utilized published data and reports
from the governments of the CMV countries and the investing states. The study incorporates
secondary sources, including reports from non-governmental organizations, significant
research articles, gray literature, and opinion pieces and reports published in newspapers and
on news websites. The information and discussions presented in these sources have been
critically assessed by the author to comprehend the scale and impact of infrastructural
projects, as well as the challenges such as delays, political instability, and security issues.
Infrastructural projects were selected based on their strategic significance and their
prominence in the regional development dialogue.

Cambodia

India's engagement in Cambodia emphasizes the 3Cs: connectivity, commerce, and culture,
alongside trade and investment initiatives. Both nations are exploring a preferential trade
agreement to enhance and diversify their trade relations. Through the Quick Impact Projects
(QIPs) of the Mekong-Ganga Cooperation (MGC), a grant of US$ 50,000 has been allocated
for the implementation of five socio-economic projects annually. From 2015 to 2018, a total
of fifteen QIPs were approved and executed, focusing on sectors such as agriculture, health,
women's empowerment, capacity building, sanitation, and environmental sustainability.
These initiatives received favourable feedback and positively impacted the beneficiaries. In
January 2018, during the visit of Cambodian Prime Minister Hun Sen to India, Indian Prime
Minister Narendra Modi announced an increase in the number of QIPs from five to ten
annually in Cambodia. By 2022, 23 projects had been completed, with another 23 in various
stages of implementation. India is among the top ten foreign investors in Cambodia, which is
looking to establish a bilateral Free Trade Agreement (FTA) with India, complementing its
existing FTAs with South Korea, Japan, and China. This is anticipated to benefit Cambodia,
leveraging India's robust economy and technology sector. Phnom Penh has also
acknowledged New Delhi's contribution to COVID-19 vaccines through the QUAD vaccine
initiative. Furthermore, India has played a significant role in the restoration of notable
temples, including the iconic Angkor Wat, receiving commendations from both the
Cambodian populace and government. Another significant endeavor is the ongoing
restoration of the Ta Prohm temple complex, with India completing two phases and initiating
the third phase in 2016, expected to conclude by 2026.

Regarding infrastructure development and connectivity, the completion and operation of the
India–Thailand–Myanmar trilateral highway, which is planned to be extended to encompass
Cambodia, Laos, and Vietnam, is expected to significantly improve connectivity between
India and Cambodia. Additionally, with India obtaining the operational rights for the Sittwe
port, there is an opportunity to enhance inter-port connectivity and development between
Sittwe and Kolkata Port, potentially advancing maritime routes and port connections with
Cambodia and other Southeast Asian countries. In light of India’s dedication to a rules-based
order and autonomy, Cambodia is likely to gain strategically, allowing it to adopt a more
balanced stance in its relationship with China.

China

Cambodia has established itself as a key ally of China, primarily due to their strong economic
and political ties. The Regional Comprehensive Economic Partnership (RCEP) and the
China–Cambodia Free Trade Agreement (CCFTA) were both implemented in January 2022,
leading to significant benefits that have enhanced bilateral trade and investment through
progressive liberalization. In 2022, bilateral trade reached a record high of US$16.02 billion,
marking a 17.5% increase from the previous year, and solidifying China’s position as
Cambodia’s leading trading partner for the eleventh consecutive year. China has become the
largest importer of Cambodian rice and bananas, while also opening its market to high-
quality agricultural products such as longans and mangoes. The collaboration between China
and Cambodia spans various sectors, including infrastructure, agriculture, textiles, and
manufacturing. By the end of 2022, Chinese investments in Cambodia exceeded US$10
billion, with approximately 101 projects under the Belt and Road Initiative (BRI). A
significant portion of these projects involves loans aimed at developing physical transport
infrastructure, including the US$2 billion, 190-kilometer Phnom Penh-Sihanoukville
Expressway, major airports like Siem Reap International Airport and another in Phnom Penh,
along with numerous smaller connectivity initiatives. As of June 2021, China had
successfully completed 3,287 kilometers of roads and constructed eight major bridges
totaling around 7.7 kilometers as part of the BRI.

Cambodia's strategic alignment with the Belt and Road Initiative (BRI) is fundamentally
based on a blend of legitimization strategies. However, this does not suggest a sole
dependence on China. Motivated by the need to diversify its dependencies and address
domestic apprehensions regarding China's influence, the Hun Sen administration has
implemented a hedging strategy. On the international front, Cambodia has actively sought
collaborations with Japan to enhance its strategic and economic relationships. Domestically,
Cambodian elites have developed narratives that highlight the advantages of the BRI while
striving to balance immediate benefits with long-term risks. This hedging strategy also entails
maintaining a willingness to improve relations with the United States, acknowledging the
risks associated with excessive reliance on any one nation. Cambodia's hedging strategy
primarily emphasizes strategic and economic diversification to mitigate dependency. For
example, despite a comprehensive partnership with China, Cambodia formed a second
strategic partnership with Japan in 2013. Furthermore, Cambodia has publicly endorsed
Japan's “Free and Open Indo-Pacific” initiative, viewing Japan as a potential counterweight
to China's influence. During Lieutenant General Hun Manet’s visit to Japan in February 2022,
both nations agreed to enhance defence and security cooperation within the framework of the
Free and Open Indo-Pacific. This strategic maneuvering highlights Cambodia’s efforts to
navigate geopolitical complexities while protecting its national interests. Recognizing
Chinese investment as vital for socioeconomic development and poverty alleviation,
Cambodia views the BRI as an essential asset for advancing its domestic goals, particularly in
infrastructure development and industrialization. The government’s Industrial Development
Policy for 2015–2025 outlines ambitious objectives that rely on substantial infrastructure
investments.

Cambodia is currently confronted with significant challenges, ranking 73rd among 160
nations in terms of infrastructure quality. Issues such as logistics inefficiencies, customs
facilitation hurdles, and high electricity costs impede economic growth. To rectify these
shortcomings, the nation requires considerable annual investments, estimated to exceed
US$600 million, aimed at enhancing roads, bridges, power grids, and irrigation systems.
Additionally, Cambodia has set an ambitious goal to construct new expressways by 2040,
with projected costs of US$9 billion and US$26 billion, respectively. The Belt and Road
Initiative (BRI) is perceived as a potential driver of growth, offering opportunities to
diversify industries, enhance trade and investment, boost tourism, and increase agricultural
exports to China. As a result, the BRI is expected to be a vital funding source for
infrastructure projects that are crucial for sustaining growth and establishing Cambodia as a
regional economic center. Moreover, Cambodia's participation in the BRI is likely to fortify
the ruling Cambodian People's Party (CPP) by supplying resources to influential political-
business networks. These networks, dominated by politically connected tycoons and
enterprises, stand to gain from BRI initiatives. Notable projects, such as the new Phnom Penh
International Airport and the Techo 1 satellite project, exemplify collaborative efforts
between politically affiliated entities and Chinese partners, underscoring the intertwined
nature of political and economic interests within BRI endeavours.

China's influence in Cambodia has significantly increased over the first decade of the Belt
and Road Initiative (BRI) from 2013 to 2023. This growth is evident in the substantial rise in
investment and financing across various sectors, particularly in large-scale infrastructure
projects. In 2013, Chinese companies invested US$490 million in non-financial investment
in Cambodia. By early 2024, this investment had surged to approximately US$545 million
within just the first two months, accounting for around 39% of the total foreign direct
investment (FDI) in the country. These overall figures often obscure the diverse forms and
channels of Chinese investment that are directly and indirectly linked to infrastructure
development. Under the China's BRI-driven state-led infrastructure expansion in Cambodia,
private Chinese firms have shifted labour-intensive manufacturing work, particularly in
garments and footwear, to Cambodia, influenced by high domestic land and labour costs.

Research has followed shoe manufacturing company based in Dongguan, southern China,
and its factory in Cambodia since the mid-2010s. After reducing its workforce in Dongguan
from over 1,000 to about 500, the company invested US$1.6 million in 2016—a significant
amount relative to its size—to establish a factory in Phnom Penh, employing around 1,000
Cambodian workers. In addition to lower labour costs, the company has benefited from
Cambodia's duty-free export policies for brand-name shoes like Aldo to Canada and the EU.
In 2017, the company's management expressed confidence in their profitability in Cambodia
for several years, primarily due to the lower wages paid to Cambodian workers, which were
one-third of those in China. As of February 2024, the factory director reported that they have
maintained a workforce of 1,000 and continue to generate modest profits, even as Cambodian
wages have risen to approximately half of those in China.

The factory's efficiency has improved due to reduced transportation expenses and expedited
delivery, facilitated by the newly constructed Phnom Penh-Sihanoukville Expressway, built
by China. This expressway, which cost US$2 billion and was inaugurated in November 2022,
has decreased the travel duration between Cambodia's two largest cities from five hours to
less than two. By November 2023, it recorded approximately 5.19 million vehicle trips. An
Uber driver based in Phnom Penh mentioned in February 2024 that he frequently transports
Chinese businessmen from the capital's airport to Sihanoukville via this expressway. China's
extensive infrastructure initiatives have also reached Siem Reap, a small city housing
Cambodia's premier tourist destination, Angkor Wat. The China-funded Siem Reap-Angkor
International Airport, financed by an affiliate of Yunnan Investment Holdings Ltd at a cost of
US$1.1 billion, commenced operations in November 2023.Modeled after airports in lesser-
known Chinese cities, this facility is capable of accommodating seven million passengers
annually, with future plans to increase this capacity to 12 million by 2040. Given its location
nearly 50 km from the city center, a new, currently underutilized highway has been
constructed to connect the airport to Siem Reap. This highway is also equipped with high-
voltage power lines and indications of future industrial zones and tourist amenities, as noted
in February 2024. These recent infrastructure developments follow the completion of eight
bridges and 3,287 km of roads built by China as of June 2021. In addition to their scale, the
infrastructure projects constructed by China in Cambodia have become increasingly
interconnected.

Geoeconomics and security connections via canal and military naval base

The Cambodian government has recently undertaken a significant initiative to enhance its
infrastructure by constructing the Funan Techo Canal, which will connect its Autonomous
Port on the Mekong River near Phnom Penh to the Kep Port on the Gulf of Thailand. This
project, estimated to cost approximately US$1.7 billion and primarily funded by domestic
resources, has been awarded to China Road and Bridge Corp (CRBC), with construction set
to commence in 2024 and completion anticipated by 2028. The canal will span 180 kms, with
a width of 100 meters and a depth of 5.4 meters, accommodating vessels with a deadweight
of up to 3,000 tons. Currently, 33% of Cambodia's cargo is transported through the Mekong
River to the sea through the Port of Ho Chi Minh City; the canal is expected to reduce this
reliance to 10% and decrease shipping costs by 70%, resulting in annual savings of US$88
million. This development has raised concerns in Vietnam, which stands to lose significant
revenue from reduced Cambodian river cargo and may also experience a decline in
agricultural production, particularly rice, due to the canal's impact on water flow to the lower
Mekong Delta. While the Funan Techo Canal may not yield immediate geoeconomic
advantages for China, as it is unlikely that large commercial vessels will navigate from
Yunnan province down the Mekong to reach the sea, it is noteworthy that China Harbour
Engineering, a CRBC subsidiary, signed a contract in 2023 to assist in the construction of the
nearby Kampot Port. Additionally, China has been actively involved in the development of
Cambodia's Ream Naval Base since 2020, with satellite imagery and geospatial intelligence
from a Western source indicating that construction activities at Ream have included the
establishment of roads, piers, pilings, buildings, and other facilities through 2023.