Under its 'string of pearls' policy, China has long been trying to ring-fence India by building strategic and economic bases in smaller countries in the region. However, Prime Minister Narendra Modi has been pursuing an aggressive policy to contain China in India's backyard. South Asia has become a battleground between the two powers as India seeks to challenge Chinese influence in its backyard.A few days ago, PM Modi attended the swearing-in ceremony of new Maldivian President Ibrahim Mohamed Solih. India-Maldives ties had come under strain under former president Abdulla Yameen who was perceived to be close to China. Some of his decisions, including the restrictions on work visas for Indians and signing of a new Free Trade Agreement with Beijing also did not go down well with New Delhi. The new government in Maldives has said it would pull out of a free trade agreement with China because it was a mistake for the tiny nation to strike such a pact with the world's second biggest economy.Yameen had signed the agreement during a visit to Beijing last year and the same month his parliament ratified the treaty despite opposition protests that he had rushed through the 1,000-page document in less than an hour without any debate.China has extended its influence in small countries in India's neighbourhood by funding infrastructure projects. However, since such funding has proved to be a debt trap, these countries have become wary of it which gives India a chance to strengthen economic ties with them.PM Modi's relentless efforts to minimise Chinese influence in India's neighbourhood has led to a continuous power struggle between the two countries.In Sri Lanka, India helped broker a coalition between Maithripala Sirisena and Ranil Wickremesinghe to remove Mahinda Rajapaksa from office 2015. Rajapakse had given China strategic entry into Sri Lanka, by leasing out Hambantota port to China and allowing it to build Colombo port and dock its submarines in Sri Lanka. Wickremesinghe reversed a few deals with China and even signed a deal with India to operate the Humbantota airport.But now, Rajapaksa's ascent to power has worried India as he is seen to be closer to China.Though India will need to work much harder and beat China's money power to woo back smaller neighbouring countries, Modi's 'neighbourhood first' policy has been aggressively at work. A few months ago, China had to scrap a hydroelectric project in Nepal due to the daunting cost of resettling thousands of families. But the real reason is said to be India. India reportedly told Nepal it would not buy electricity from that project, and China could not rely on a small Nepalese market.India's best hope is that the neighbouring countries grow doubtful about China's infrastructure funding. That's already happening. Bangladesh is building the 20-kilometre-long rail and road bridges over Padma river with its own money despite the lure of ready Chinese funds.While some Chinese firms are involved in the execution of the project selected through tenders, the initiative has no exposure to Chinese funds. Bangladesh has been cautious in accepting loans from China and has on occasions rejected Chinese firms vying for infrastructure projects and even blacklisted Chinese firms.