India’s Development Partnerships in South Asia: A Rupee Diplomacy Approach to Counterbalance China’s BRI

Author(s)	Ms. Kiratulan
Country	India
Abstract	This paper analyzes India's strategic response to China's Belt and Road Initiative (BRI), focusing on countering the geopolitical risks posed by opaque, non-concessional "debt trap diplomacy." The BRI model often leads to sovereignty erosion through asset seizure upon default. India’s counter-framework employs a dual strategy, Rupee Diplomacy and Alternative Financing. Rupee Diplomacy, operationalized through the Rupee-based Trade Settlement (RTS), mitigates currency risk for partners and fosters financial autonomy, enhancing regional interdependence. Alternative Financing, utilizing concessional Lines of Credit (LoC) and risk-sharing Joint Ventures, offers a sustainable, demand-driven, and low-debt pathway that preserves recipient nation sovereignty. By integrating these financial tools with its foreign policy (e.g., Quad, SAGAR), India presents a scalable, values-based alternative that challenges the high-risk, transactional nature of the Chinese model, provided implementation speed and scale challenges are addressed.
Published In	Volume 8, Issue 1, January-February 2026
Published On	2026-01-29
DOI	https://doi.org/10.36948/ijfmr.2026.v08i01.67638
Short DOI	https://doi.org/hbmv85

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