If India were a client state, then they would want to string India along as you described, provided that the U.S. would not cut in and take it over. The thing is, India is an independent country and they must deal with it as such. Since India wanted to be the hegemon in South Asia, the interests of the two countries oppose each other. There is no way for anyone to control a country that big, fail state or not. The best way is to break it up into smaller countries. Two things happen when you break up a country like India,Yea, but even if PRC is that nefarious, why would it want what is essentially a nuclear armed failed state on its border? What is the ultiamte objective of this strive and chaos?
No, I don't buy that bullshit.
The optimum path for India from a PRC perspective is a permutation of its current state, semi-industrialized, providing a market and labor for low tech and labor intensive goods.
PRC wants a compliant India that it can work with in terms of development. It is in China's interest to have a stable and developing India. But not its long term interest to have a developed India.
So the best strategy is to string it along, economically and financially, never quite a friend, but definitely not a enemy, and never a competitor.
In some ways, this is how US played China back in the 1990s, but it will be much more careful in order not to fully outsource its technical and manufacturing capabilities, so that this bilateral and somewhat subservient relationship last far more than 40-50 years, as it played out for US vis a vis China.
Fortunately, India is a lot more fractured than China was in the 1980s. And with a democratic system, there is far more room for maneuver and influence to sustain this relationship.
1. the smaller countries that formed will be fighting each other. As such, they will need help from the outside to win.
2. Since they are smaller countries, they would be easier to control.
This is no different than any other country on how they would operate. If India has the power, they would not hesitate to do the same thing. This is also how the U.S. views Russia. The best Russia is a Russia that is broken up.
The only fly on this ointment is the U.S., If India is sufficiently weakened, the U.S. will step in to protect it and China will have U.S. at its doorstep. If the U.S. is unable to interfere, and they no longer face the wrath of the West because they are too big and strong, and India falls outside of the sphere of influence of the West, they would be thinking about the break up of India.