Digital infrastructure development in South Asia is gathering pace. It is central not only to economic growth and public service delivery, but also to national and regional security as well as geopolitical competition, particularly between China and India.
China has emerged as a significant supplier of digital infrastructure and technology across the region. Through the Digital Silk Road, Chinese entities have become deeply embedded across South Asia’s digital ecosystem, spanning telecommunications, fibre-optic networks, submarine cables, data centres, cloud services, smart cities, surveillance technologies, digital payments and e-commerce. While Chinese investment has helped accelerate connectivity and digital development, it has also created long-term risks like technological dependence, vendor lock-in, unsustainable financing, poor transparency, threats to cybersecurity and strategic autonomy.
This report argues that the central challenge for South Asian states is not Chinese involvement in itself, but it is the combination of limited alternatives and weak institutional capacity to address the long-term risks and threats mentioned above. It examines China’s digital engagements across the region, including in strategic locations, maps its presence across different layers of the digital ecosystem and assesses the implications.
The report also explores how Australia and India can support more resilient and inclusive digital development in South Asia, despite structural limitations. India brings extensive experience in deploying digital public infrastructure at scale, while Australia offers expertise in e-governance, cybersecurity, infrastructure financing, institutional capacity building and regulatory cooperation. Rather than advocating decoupling from Chinese technology, the report proposes a pragmatic approach centred on diversification, local ownership and institutional resilience. It identifies practical avenues for Australia–India cooperation, including facilitating international financing, digital public infrastructure, sharing governance experience, human capital development, private-sector investment and leveraging regional and multilateral partnerships.
By broadening the range of credible partners and strengthening institutional capacity, Australia and India can help ensure that South Asia’s digital transformation is secure, sustainable and responsive to the priorities of regional states.
