India Now Third Most Powerful Nation In Asia, But…

India has solidified its position as a major Asian power, overtaking Japan to claim third place in the 2024 Asia Power Index, published by the Lowy Institute.

This milestone marks India’s steady ascent in regional influence, driven by robust economic growth, strategic diplomacy, and a promising demographic outlook.

While the United States and China continue to dominate the Asian power hierarchy, India’s rise signals a changing regional landscape, where New Delhi’s potential is gradually translating into tangible influence.

India’s economic resurgence has been central to its improved standing. According to the Lowy report, India’s Economic Capability score rose by 4.2 points in 2024, reflecting strong post-pandemic recovery and accelerated growth. As the world’s third-largest economy in terms of purchasing power parity (PPP), India is leveraging its economic base to strengthen its regional and global influence.

The report highlights the country’s demographic advantage as a critical driver of future power. With a youthful population and expanding workforce, India’s Future Resources score increased by 8.2 points—the highest among major Asian economies. This growth suggests that India could enjoy a sustained economic and strategic edge over the coming decades, unlike China, which faces demographic challenges due to an aging population.

However, economic relationships remain a weak point for New Delhi. Despite its overall rise, India fell behind Indonesia in Economic Relationships, reflecting limited integration into regional economic frameworks. India’s cautious approach to free trade agreements and its absence from major regional economic pacts, such as the Regional Comprehensive Economic Partnership (RCEP), continue to limit its economic influence in Asia.

India’s diplomatic outreach has been another pillar of its rise. The Diplomatic Influence measure in the Asia Power Index shows a notable improvement, with India now ranking fourth in Asia, behind China, Japan, and the United States. Prime Minister Narendra Modi’s proactive foreign policy, characterized by increased engagement with Asian and global partners, has boosted India’s diplomatic standing.

India participated in the sixth-highest number of diplomatic dialogues among Asian countries in 2023, underscoring its growing role as a regional player. This uptick in engagement reflects India’s non-aligned approach, which allows it to navigate complex geopolitical landscapes while maintaining strategic autonomy.

Yet, New Delhi’s non-aligned stance has also constrained its defence partnerships. The country’s Defence Networks ranking dropped to ninth place, overtaken by Indonesia, reflecting the country’s reluctance to deepen formal security ties with U.S.-led alliances like AUKUS. Instead, New Delhi has pursued bilateral defence partnerships, exemplified by the sale of BrahMos missiles to the Philippines.

India’s military strength continues to bolster its regional standing, with its Military Capability score placing it fourth in Asia, behind the United States, China, and Russia. While India’s defence spending and conventional military capabilities remain formidable, its limited ability to project power beyond the Indian Ocean region highlights a gap between its resources and influence.

The Lowy report underlines that New Delhi’s focus remains largely westward, toward its immediate neighbourhood and the Indian Ocean, rather than extending into East Asia. This geographic constraint, combined with its cautious approach to alliances, limits India’s ability to project power east of the Malacca Strait—a crucial strategic chokepoint in the Indo-Pacific.

Despite its advancements, India still faces what the Lowy Institute describes as a significant “power gap”—the disparity between its potential and actual influence. This negative power gap is the largest among major Asian economies, excluding Russia and North Korea.

The gap reflects Delhi’s global focus and its challenges in converting economic and demographic strengths into regional influence. While India’s rise is undeniable, its limited economic integration and cautious strategic posture have prevented it from fully realizing its potential as a dominant Asian power.

India’s ascent has significant implications for the regional balance of power. As China’s influence plateaus and U.S. dominance endures, India emerges as a key player in a multipolar Asia. New Delhi’s rise provides smaller Asian countries with an alternative partner, reducing dependence on either Washington or Beijing.

Furthermore, New Delhi’s strategic autonomy positions it as a potential bridge between competing power blocs. Its leadership in forums like the Quad (alongside the U.S., Japan, and Australia) and the newly formed India-Middle East-Europe Economic Corridor highlights its role in shaping regional economic and security frameworks.

However, realizing its full potential will require New Delhi to address its economic underperformance in Asia and strengthen defence partnerships. Greater integration into regional trade networks, increased investment in defence diplomacy, and more assertive leadership in multilateral institutions could further elevate India’s standing.

Read The Full Report Here