The China-Pakistan Economic Corridor (CPEC), as the flagship project of the Belt and Road Initiative, has significantly strengthened the strategic alliance between Beijing and Islamabad. By linking Xinjiang to Gwadar, it has reduced China’s dependence on the Malacca Strait—by approximately 30% in energy vulnerability terms—and provided direct access to the Arabian Sea, thereby operationalizing China’s “String of Pearls” strategy. CPEC has fundamentally altered the balance of power in South Asia, intensified the China-India strategic rivalry, and threatened India’s national security through strategic encirclement. The core question is how the China-Pakistan Economic Corridor, as an integral component of the Belt and Road Initiative, has shifted the regional balance of power and challenged India’s national security amid escalating Sino-Pakistani geopolitical competition. In response, it can be argued that CPEC—through deepening the China-Pakistan strategic partnership, expanding Beijing’s economic and military influence in South Asia, and creating alternative energy and trade routes—has tilted the regional balance decisively in China’s favor while seriously endangering India’s security via strategic encirclement, erosion of regional influence, and heightened risks of proxy security threats. This study, conducted through an analytical-descriptive method and grounded in the theoretical framework of neoclassical realism, aims to provide a multidimensional analysis of CPEC’s geopolitical, geoeconomic, and security implications on South Asian power dynamics, with particular emphasis on the intensification of the China-India strategic competition and the reshaping of the region’s strategic geography. Ultimately, CPEC has transformed Pakistan’s economy, substantially mitigated China’s Malacca Dilemma, advanced the String of Pearls strategy, and—by traversing Gilgit-Baltistan—exacerbated Sino-Indian rivalry while undermining India’s national security through the progressive erosion of its regional influence.