India Cannot Match China’s Money but Can Control Regional Security
India today is at an inflection point in its foreign policy, and the Union Budget numbers only make that clearer. Every year, debates erupt about why India’s foreign aid is so modest when China is pouring billions into ports, roads and power plants across South Asia and the Indian Ocean. As someone who watches these developments closely, the conclusion is simple. India should stop trying to compete with China on money and start competing where it actually has leverage: security.
India’s traditional aid model is built around grants, development projects and emergency assistance. While these have value, their impact is limited and often short-lived. Governments change, political alignments shift, and goodwill generated by aid evaporates faster than expected. A housing project or a bridge may generate appreciation today, but it does not guarantee strategic alignment tomorrow.
China’s approach has been very different. It uses large-scale loans and infrastructure projects to create long-term financial exposure and strategic leverage. Ports, highways and power plants deliver influence, but they also generate unease. Across the region, there is growing discomfort about debt, sovereignty and overdependence on Beijing. This discomfort creates an opening for India, but only if New Delhi is willing to use the right tools.
India is no longer just an aid donor. It is rapidly becoming a serious defence manufacturer. Indian industry now produces advanced artillery like ATAGS, armoured vehicles, ammunition, patrol boats, surveillance radars, drones and military all-terrain vehicles through companies such as Tata, Kalyani, Mahindra and public sector units. The cost of one ATAGS gun is roughly ₹12 to ₹15 crore. A dozen guns would cost under ₹200 crore. Surveillance speed boats for countries like Mauritius or Sri Lanka would cost even less.
When these figures are compared with India’s annual foreign aid budget of over ₹5,600 crore, a basic question arises. Why are we still thinking only in terms of cheques and grants when we can build long-term influence through security partnerships?
Defence equipment does something aid never can. It creates structural alignment. Weapons systems come with training, maintenance, spare parts and long-term logistical dependence. Militaries that train together, operate similar systems and rely on the same supply chains do not drift apart easily. These relationships survive elections, regime changes and political turbulence.
Sri Lanka is an obvious case. What it needs most is maritime security, coastal surveillance and affordable naval platforms. India can provide these without debt traps or loss of strategic autonomy. Nepal’s army already trains extensively with India and uses Indian-origin equipment. Formalising this relationship through structured defence supply would lock in alignment far more effectively than any development grant. Mauritius and other Indian Ocean states offer similar opportunities where relatively small security investments deliver disproportionate strategic returns.
China cannot easily counter this approach. Supplying arms and training embeds influence at a level infrastructure projects do not. It also carries political risk for Beijing, especially in countries wary of deep PLA involvement. India, by contrast, is seen as a natural and legitimate security partner in its neighbourhood.
What is missing is policy coordination. The Ministry of External Affairs still treats aid as its primary tool, while defence exports are viewed largely as commercial transactions. This needs to change. A portion of India’s foreign aid should be consciously redirected towards defence supply, training packages and long-term security cooperation. This is not about militarising diplomacy. It is about using public money in a way that actually secures India’s neighbourhood.
From a common citizen’s perspective, this feels like a more responsible use of taxpayer funds. Instead of chasing fragile goodwill through scattered aid projects, India should focus on becoming the security provider of choice in South Asia and the Indian Ocean. That is how influence is built and sustained.
India does not need to outspend China. It needs to shape who provides security in the region. Defence supply, not foreign aid alone, is how India can control regional security and finally create lasting strategic significance.
