“China is using its economic relations and positive trade surplus as tools to develop potential military power status in Asia.” In the light of this statement, discuss its impact on India as her neighbour.

Introduction

China converts its trade surpluses and roughly $3-trillion reserves into strategic presence, using economic instruments to build military reach across Asia — a textbook case of economic statecraft.

Economic Tools, Military Ends

• The Belt and Road Initiative creates dual-use infrastructure; the China-Pakistan Economic Corridor passes through Pakistan-occupied Kashmir, disregarding Indian sovereignty.
• Debt-leveraged ports — Gwadar, Hambantota (99-year lease, 2017) and the first overseas military base at Djibouti (2017) — ring the Indian Ocean in a 'string of pearls'.
• Trade dependence and loans give Beijing coercive leverage over India's neighbours — Sri Lanka, Maldives, Nepal, Bangladesh and Myanmar.

Impact on India

• Strategic encirclement and the PLA Navy's growing Indian Ocean presence compress India's maritime space.
• A trade deficit exceeding $80 billion finances the very asymmetry India confronts, while creating import dependence in electronics, pharmaceutical ingredients and solar equipment.
• Economic muscle emboldens border assertiveness — Doklam (2017), Galwan (2020) — and erodes India's traditional neighbourhood influence.

India's Response

• Quad and Indo-Pacific partnerships; the SAGAR vision; Chabahar and INSTC as counter-connectivity.
• Neighbourhood First lines of credit, Press Note 3 FDI screening and PLI schemes to cut critical dependence.

Conclusion

India must answer economic statecraft in kind — through connectivity, capacity-building and coalitions — rather than through military means alone.