India has come a long way from the days of Gandhian and Nehruvian foreign policy. Morally high principles, which had guided India’s foreign policy since independence, have now been left behind. A more pragmatic approach to defending its own national interests is informing India’s foreign policy makers today. Convinced that it needs both China and the United States for further significant economic development, India is endeavoring to manage its relationship with these two major powers very delicately, with no simple choice of favoring one over the other. While the United States can naturally be more helpful in terms of India’s economic and military security, China has been playing a more significant role with regard to energy and other regional issues. The rise of India as a major economic and military power has changed the fundamental structure of the world system that came into existence after the end of the Cold War. Both Eastern and Western camps, led by the United States and China respectively, are trying to draw India closer to their side. To this effect, both sides are offering various economic, military and other incentives; yet India has so far avoided the temptation of joining any one camp and has rather managed to follow its own course. From the study of recent Indian foreign policy initiatives, it is becoming clear that India is actively trying to intensify its engagement within the East Asian region. With Indian influence on the rise, a new factor has been introduced into the balance of power system in East Asia, which will have very far-reaching implications for regional security. In essence it has the potential of turning the current East Asian status quo upside down, thereby unleashing a new configuration of regional powers with very significant effects on the region’s security and economic well-being.