India surpasses Japan as the third most powerful nation in the Asia Power Index, still behind China

India has surpassed Japan in becoming the third-largest power in the Asia Power Index. India still trails behind China in all aspects, with particularly notable gaps in economic capability and economic relationships.

The Asia Power Index, developed by the Australian Lowy Institute, annually assesses power dynamics among 27 Asia-Pacific countries. It measures material capabilities and influence based on eight key factors, including economic and military capability, resilience, and diplomatic influence. Derived from 131 indicators, the Index offers a comprehensive view of how nations translate resources into global influence.

This index reveals that India's economic capability improved by 4.2 points due to strong post-pandemic recovery, positioning it as the world’s third-largest economy by purchasing power parity (PPP).

Additionally, India’s Future Resources score surged by 8.2 points, indicating a potential demographic dividend that contrasts with the ageing populations of rivals like China and Japan.

With continued growth and a burgeoning workforce, India is well-positioned to expand its influence in the Indo-Pacific region, supported by its rising diplomatic Influence and strategic autonomy. The country has gained recognition for its leadership and active engagement in multilateral forums, ranking sixth in 2023 for the number of dialogues held with other Asia Power Index countries.

"However, the fact that its influence remains well below the level promised by its resources suggests it still has ample potential for further growth as a major power,” the report said.The report thus highlights that there remains a significant gap between the expectation of "India rising" and the actual reality.

While the Asia Power Index indicates consistent improvements since 2018 in diplomatic influence, resilience, military capability, and economic capability, India has experienced a 9.9-point decline in economic relationships, the highest decline in any measure, followed by a 9-point drop in cultural influence, and further declines in defence networks and future resources. Low integration with larger Asian economies has hindered India's economic relationships, allowing countries like Indonesia to gain ground. Additionally, India's score for defence networks has declined, reflecting caution in deepening security cooperation, particularly with the US alliance network.

Despite these challenges, India’s latent potential for greater influence in Asia remains significant. Its defence exports, such as the BrahMos missile sale to the Philippines, underscore expanding ambitions, while the country's power gap, indicating the difference between its potential and actual influence, suggests opportunities for growth, especially outside its Indian Ocean neighbourhood. India’s evolving role in regional security dynamics, particularly through initiatives like the Quad, highlights its increasing significance, even as it operates outside formal military alliances, the report noted.When compared to its neighbours, "middle power" India lags significantly behind the superpower China, which scored 72.7 in the Asia Power Index, well above India's score of 39.1. India's score is only slightly higher than Japan's 38.9. This stark contrast underscores India's challenges in enhancing its global influence relative to China.

The index indicates that China’s power is neither collapsing nor surging dramatically; rather, it is plateauing such that while it remains positioned below the United States it is still ahead of all other Asian nations. A significant factor constraining China's power is its declining Economic Capability, which has decreased annually since 2019.