India is often perceived as a regional power, but a closer look reveals that it is in a disadvantageous position vis-à-vis China in South Asia. The first reason is that Indian governments never had the political, economic, and military capacities to pursue their regional power ambitions with their neighbours in the long run. South Asian countries could always play the China card in order to evade India’s influence. Second, India’s new South Asia policy with the focus on trade and connectivity has improved regional cooperation since 1991.