Abstract: This article focuses on relations between China and India in South Asia, the two major powers’ ‘shared neighborhood’. Assessing the objectives underlying Beijing’s interest in engaging in regional groupings with India and other South Asian states, it finds that Beijing’s pursuit of a ‘regionalism foreign policy’ reflects a ‘comprehensive’ approach to international security. China’s regionalism foreign policy creates potential nexuses for regional cooperation between China and India. Against the backdrop of strategic insecurity between the two countries, however, Chinese policies, including a burgeoning paymaster role, galvanize New Delhi to buttress its traditional regional dominance. The discussion concludes that to avert worsening tensions with India and win Indian participation in its regional vision, Beijing must rethink its current approach, taking into account how New Delhi perceives its behaviour. The article suggests areas for further research concerning how regional institutions as forums for major power interaction might facilitate cooperation between rivals.