American security policy towards South Asia can basically be divided into three stages: balance of power in the Cold War era, beyond balance of power after the end of Cold War, and new balance of power after September 11.

Policies of the developed world continue to affect the domestic as well as foreign policies of China and India in the post-Cold War period. The US war against terrorism in Afghanistan has drawn China closer to the US. This has set new parameters for Sino-Indian relationship. Economic reasons dominated the relations among nations in the 1990s, but the scare of terrorism has forged a global coalition and middle powers have few options to choose independent policies.