India’s Southward Turn: Modi’s Strategic Realignment in the Indian Ocean Region

 Keywords: Indian Ocean, Littoral States, Small Island Nations, SAGAR, Project Mausam

Date: 26th May, 2025

India’s foreign policy in the Indian Ocean has traditionally revolved around its northern arc—countries close to its shores or along major sea lanes near the subcontinent. Over the past decade, and especially under Prime Minister Narendra Modi, there has been a perceptible shift southward, a reorientation sometimes labelled India’s “looking south” policy. This new engagement is evident in everything from trade and investment data to changes in foreign aid patterns and naval collaborations.

A view of the Indian Ocean that once stopped somewhere around the Maldives, Sri Lanka, or the Gulf region is now visibly extending to Africa’s littoral states, smaller island nations, and beyond. Even though, at first glance, this pivot might look like a quiet affair—no fireworks, no grand parades—it has caught the eyes of scholars and policymakers seeking to understand how India’s domestic economic drivers, strategic imperatives, and geopolitical ambitions intersect.

A prime indicator of this southward turn is the way India has reallocated its economic resources. Historical data from before 2014 shows that India’s foreign aid, grants, and loans overwhelmingly flowed to countries located in the northern Indian Ocean belt. Bhutan and Nepal often stood out as top recipients, with more than half of India’s total foreign assistance going to them in certain years.

But under Modi, while those northern neighbours still receive substantial amounts, countries like Mauritius, Seychelles, and the Maldives have seen an unmistakable uptick in grants and loans. Although the absolute figures still place many northern Indian Ocean countries at the head of the line, the clear increase in aid to southern island states has caused observers to note a “balancing” of India’s distribution.

Foreign policy commentators might say that India is no longer “allergic to the south,” but the shift is more than a mere policy pivot—there’s a broader strategic design here. For India, newly forged aid relationships bring diplomatic goodwill, potential defence cooperation, and deeper economic ties in maritime areas that are too important to ignore.

In tandem with foreign aid adjustments, trade patterns offer another window into India’s strategic thinking. During the 1990s and 2000s, India’s maritime trade soared in general, with a particular emphasis on Southeast Asia and oil-rich Gulf states. Trade did grow with African coastal nations, but it tended to be overshadowed by bigger trade partners closer to home or countries holding large Indian diaspora populations.

After Modi took office, total volumes of trade with some southern Indian Ocean nations still remain modest, but the upward trend in select countries—Mozambique, Tanzania, Zambia, and Madagascar, for instance—indicates that India has begun to see these places as lucrative markets and sources of resources. Analysts have pointed out that India’s domestic energy needs are projected to rise sharply in coming years, and African energy producers could well become vital for India’s diversification strategies.

Foreign direct investment (FDI) follows a similar story. Although India’s overall outflows of FDI wavered between 2014 and 2019, the proportion directed toward certain African rim countries and the Maldives nudged upwards. Beneath the raw numbers lies the intriguing detail that despite modest absolute figures, the growth rate in these specific southern geographies has overshadowed FDI changes in many of India’s older, northern neighbours.

What might appear as a subtle nuance in a spreadsheet can have far-reaching consequences: new business ties bring new infrastructural investments, which in turn create deeper cross-regional connectivity. If small African states or island countries see India as a viable partner, doors open to further cultural exchanges and strategic alliances.

None of this is happening in a political vacuum. Far from it: the Indian Ocean has become a major arena for global power dynamics, featuring China’s rising naval profile, the United States’ pivot to the Indo-Pacific, and Japan’s various infrastructure investments. In response, India’s Security and Growth for All in the Region (SAGAR) vision explicitly commits to collaborative maritime security, capacity-building, and rule-of-law-based navigation.

The impetus to “look south” dovetails with New Delhi’s desire to be recognized as the region’s net security provider, a concept it has brandished in numerous summits and maritime dialogues. Of course, no major power likes to step into uncharted waters alone, so India fosters ties with the United States, Japan, Australia, and even smaller Indian Ocean states. All in all, it’s not just about India wanting to buy Tanzanian minerals or expand trade with Madagascar: it’s about ensuring that Chinese ports and naval assets do not become the region’s default magnet for economic and political loyalties.

The best-laid plans can run into storms, and the COVID-19 pandemic was certainly a gale force. Lockdowns, closed ports, disruptions to supply chains, and border restrictions hammered global trade. For India, which depends on steady maritime routes, these disruptions could have paused or reversed its pivot south. Indeed, the data shows that India’s overall external economic engagements briefly dipped.

Nonetheless, the intriguing observation is that despite these hurdles, the medium-term direction of India’s policy remained. Certain investment projects might have been delayed, and foreign aid restructured, but the underlying impetus to court southern Indian Ocean nations did not vanish. Port expansions, training programs, and official visits eventually resumed as pandemic restrictions eased, signalling that the health crisis was a detour, not a U-turn, for the “looking south” emphasis.

That said, the question arises: will India sustain this interest in the south if domestic economic conditions tighten? There’s a tension between India’s strategic ambitions and its resource constraints. Modernizing the navy, offering substantial development assistance, and investing in large-scale African projects demand time, funding, and political will. If domestic factors—like economic slowdowns or urgent needs in other regions—compel the government to tighten its belt, will the southern Indian Ocean remain a priority?

Over the last few years, the evidence suggests that Modi’s government sees these southern states not as “optional extras” but as critical elements in India’s broader oceanic narrative. But experts caution that expansions in foreign policy often require consistent follow-through beyond one political term. It remains to be seen whether future administrations will keep the same tempo or if they will shift focus yet again.

Meanwhile, southern countries, for their part, are no mere passive recipients waiting to be wooed by outside powers. Many small island nations, for example, are grappling with climate change threats and are keen to partner with states willing to invest in sustainable development and capacity-building—be it India, China, or any number of donor nations.

In that regard, India’s approach of combining cultural diplomacy (like Project Mausam, which emphasizes shared cultural and historical maritime connections), naval training programs, and lines of credit for infrastructure can offer a compelling alternative. Should that approach be seen as more genuine and flexible, states like Mauritius, Seychelles, and the Maldives might deepen their ties with India, forging alliances that remain stable even if other powers come knocking with glittering offers?

These complexities underscore that “looking south” is not simply a matter of charting a course on a map. It merges national ambitions, regional balances of power, pandemic recovery pressures, and the everyday business of trade and investment. The interplay among them can’t be captured by a single statistic on foreign aid or one year’s FDI data.

Rather, the changes must be studied over the long haul, recognizing that geopolitical transformations rarely unfold in a linear fashion. Countries join or leave alliances, leaders rotate, global prices fluctuate. The Indian Ocean’s strategic significance is only set to grow in the 21st century. For India, the southern slice of this vast maritime space beckons with opportunities and hazards alike.

The Modi administration’s Indian Ocean pivot represents a balancing act between aspiration and pragmatism. While intentions lean toward ensuring a strong foothold from the Gulf to Africa and beyond, the actual pace depends on how smoothly India’s domestic economy rebounds post-COVID, whether external partnerships (like with the Quad) flourish or falter, and how effectively India can court local stakeholders on the ground.

For now, India’s southbound leap has made enough noise to draw attention from international observers, but it needs consistent nurturing. If the last few years are any indication, India is determined not to let the southern horizon slip from sight. Like any sailor testing unknown waters, it must navigate storms, rework charts, and occasionally patch up battered sails, but the compass is clearly pointing south—and it seems India has every intention of following it.

 Rana Abhyendra Singh, Research Assistant, Department of History, Banaras Hindu University, Varanasi.

Disclaimer: The views expressed above and the information available are those of the author/s and can therefore in no way be taken to reflect the position of Asian Confluence

Want to write for us? Reach out to us at comms@asianconfluence.org