Produced by: Manoj Kumar
China extends massive infrastructure loans to India’s neighbors under the Belt and Road Initiative, targeting ports, highways, power plants, and airports.
These loans often come with high interest rates and opaque terms—less favorable than multilateral lenders—creating long-term financial strain.
Many projects are economically unviable, leading to unsustainable debt. When countries fail to repay, China pushes for strategic concessions.
The clearest example: Sri Lanka handed over Hambantota Port to China on a 99-year lease after defaulting on loan repayments.
Through ports in Pakistan, Sri Lanka, Maldives, and Myanmar, China is physically and economically encircling India—a tactic dubbed the “String of Pearls.”
These debts create political dependence. Heavily indebted neighbors align their policies with Beijing, diluting India’s influence in the region.
China uses these projects to give its firms new markets, secure raw materials, and deepen trade dependencies—creating economic leverage loops.
China has lent $28.6B to Pakistan, $8.8B to Sri Lanka, up to $1.4B to Maldives, $300M to Nepal, and $26B to Bangladesh—reshaping regional economics.
By controlling key infrastructure and policy levers, China weakens India’s role in South Asia—undermining regional leadership through strategic debt.