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South Asia is becoming one of the most fiercely competitive battlegrounds between India and China. Located at the center of South Asia and with its large geographical area, population, and economic size, superior military strength compared to other countries in the region, India has always been the most influential power in the region. But in the past decade, China's intensified partnership with small countries in South Asia has threatened India's number one position in the region. It is the challenges posed by China in South Asia, inter alia, that have forced India under Prime Minister Narendra Modi to make various important foreign policy adjustments. To interpret India–China competition in South Asia in aspects of diplomacy, economy, security and defense, the paper uses international relations theories including constructivism, neo-realism (particularly offensive realism) and the balance of threat theory. Although the paper analyzes India–China competition in all three areas of diplomacy, economy and military security, the authors are of the view that, the most fundamental motivation of China and India in this competition is to achieve power and security and not economic objectives. While China's strategic calculation leans towards its ambitions to gain greater power in the geopolitical order, India's strategic calculation leans towards ensuring its security. By using qualitative methods and utilizing secondary data including books, treatises, articles and policy briefs ... , this paper analyzes the strategic calculations of India and China in South Asia. The paper argues that China's intention is to emulate and then overtake India in the very region of India's traditional influence, while India's strategy is to maintain and strengthen its number one position in the region. Though China's influence in the region seems to have overwhelmed over India, India with all its internal forces is also hindering China's penetrating steps into South Asian region. [ABSTRACT FROM AUTHOR]