The rise of regional influence in the post unipolar world has changed the orientation of world politics altogether. India’s developing domestic market with global outreach and sustainable growth over the last few decades has enabled the country to plan big and materialize the goal (of regional pre-eminence) set by its founding fathers. The traditional idea of power and use of power to create an influence among small states somehow supports the hegemonic claims of India but unconventional ideas of hegemony challenge the legitimacy of any such claims. India’s growing economic and military potentials are not very helpful in maintaining or restoring peace and prosperity in the region and being considered a constant threat to regional security. India’s hegemonic aspirations are not only the major source of unrest in the region but also a great threat to Pakistan’s territorial integrity since India perceives Pakistan a major hurdle to attain regional supremacy. Scrutinizing Indian hegemonic claims by applying Cox’s idea of a legitimate hegemon shows an evident lack of will on the part of India to contribute materially and ideologically in creating and establishing stable order in the region. India has not been able to be a dictator in political and security domains of Indian Ocean. Moreover, India’s role in economic domain has been creating setbacks for the neighbouring states. India wants to control the markets of its neighbours but doesn’t give them chance to have an open access to its domestic market. For instance, if we see Indo-Bangladesh trade statistics, India exported some USD 2.3 billion worth of goods to Bangladesh in 2007 but Bangladesh’s exports to India were only half a billion USD. The trade deficit is huge and discouraging for Bangladesh’s producers as Indian products are replacing the local production. There is a legitimate fear that if trade deficit persists then the local market will only be relying on a few exports while Indian monopoly would cause de-industrialization and unemployment in the country. Economic instability in turn contributes to political chaos. Tariff barriers are in favour of Indian economy and damaging Bangladesh’s exports. India has the condition of mandatory testing of imports like agricultural, textile and leather from its neighbours and testing process takes a lot of time. The China factor is changing geostrategic game in the region. The emergence of China as a main power player in the region with its infrastructure and economic projects to offer to almost all the South Asian states is the real challenge for Indian predominance in the region. India’s ambitions to play the sole hegemon in the region are under threat and now it has little margin to take benefit of small regional economies. It has huge concerns vis-à-vis China’s increasing diplomatic and strategic ties with countries in South Asia. Earlier it was only Pakistan, enjoying full economic and military support of China in a bid for competing India’s hegemonic desires, but post 1990s, China has started developing cordial ties with other states of the region. China has emerged as an alternative power for the small countries earlier dependent on India because of their geographic weaknesses, tiny economies (depended on Indian market) and small size. China and India rely on foreign resources of energy as domestic resources are not enough to fulfill the needs of growing economies. China imports forty percent of its energy needs while Indian dependence on external sources is seventy percent. India, China energy competition is reflected in their struggle to establish the influence in major energy exporting countries as well as in the energy transport routes.