Indian Ocean

China and India increasingly vie for strategic advantage in the Indian Ocean, while also cooperating on some
transnational security issues.

Backgrounder by Eleanor Albert

Fishing boats anchored at Karachi Fish Harbor after a severe cyclone warning, October 29,
2014. (Asif Hassan/AFP/Getty Images)

Introduction

The Indian Ocean is the world’s third-largest body of water and has
become a growing area of competition between China and India. The two
regional powers’ moves to exert influence in the ocean include deep-water
port development in littoral states and military patrols. Though experts say
the probability of military conflict between China and India remains low,
escalated activities (such as port development and military exercises) and
rhetoric could endanger stability in a critical region for global trade flows.
But the diverse nontraditional security challenges in the Indian Ocean
Region (IOR) also offer areas of potential collaboration for China and
India, as well as other regional actors.

What is the importance of the Indian

Ocean?
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The Indian Ocean covers at least one fifth of the world’s total ocean area
and is bounded by Africa and the Arabian Peninsula (known as the
western Indian Ocean), India’s coastal waters (the central Indian Ocean),
and the Bay of Bengal near Myanmar and Indonesia (the eastern Indian
Ocean). It provides critical sea trade routes that connect the Middle East,
Africa, and South Asia with the broader Asian continent to the east and
Europe to the west. A number of the world’s most important strategic
chokepoints, including the Straits of Hormuz and Malacca through which
32.2 millions of barrels of crude oil and petroleum are transported per
day—more than 50 percent of the world’s maritime oil trade—are found
in the Indian Ocean Region, which itself is believed to be rich with energy
reserves. Nearly 40 percent [PDF] of the world’s offshore petroleum is
produced in the Indian Ocean, coastal beach sands and offshore waters
host heavy mineral deposits, and fisheries are increasingly important for
both exports and domestic consumption.

Why is the Indian Ocean a source of

competition?

More on:

China

India

Defense and Security

Oceans and Seas
China and India are dependent on energy resources transported via the
secure sealanes in the Indian Ocean to fuel their economies. India
imports nearly 80 percent of its energy, mostly oil from the Middle East,
and is due to overtake Japan as the world’s third-largest energy consumer
(behind China and the United States). According to a U.S. Department of
Defense report, 84 percent [PDF] of China’s imported energy resources
passed through Strait of Malacca from the Indian Ocean in 2012. As
Beijing and New Delhi press to maintain economic growth, their
dependency on the safe transport of resources will likely intensify.
China’s growing global influence and India’s rapid economic rise have
heightened the ocean’s strategic value. Meanwhile, the United
States’ rebalance to Asia—shifting from a foreign policy dominated by the
Middle East to one more centered on Asia—has also been a contributing
factor elevating concern over Indian Ocean security. Diverse security
challenges affect the region ranging from natural disasters to concerns
over energy security, piracy, and military posturing.

How are China and India competing in the

Indian Ocean?

Both countries have developed initiatives to bolster infrastructure and

other connections in the region, which the World Bank describes as among
the “least economically integrated.” Competition between Beijing and
New Delhi is not necessarily overt, but each country is seeking to
strengthen ties with smaller regional states to secure their respective
security and economic interests.

Beijing’s regional vision, backed by $40 billion of pledged investment,

outlines its One Belt, One Road plan—combining the revitalization of
ancient land-based trade routes, the Silk Road Economic Belt, with
a Maritime Silk Road. China’s ties with regional states have deepened,
including the influx of Chinese capital into construction projects in
Bangladesh, Myanmar, Pakistan, and Sri Lanka. Since launching
counterpiracy operations in 2009, Beijing has become increasingly active
in the region. China has also undertaken efforts to modernize its military,
particularly its naval deployment capabilities to protect overseas
interests like personnel, property, and investments. Experts also argue that
Beijing’s forays into what is at times described as India’s neighborhood
are driven by China’s excess capacity challenges—incentivizing Chinese
firms out of domestic markets to compete in and open new markets
abroad.

For its part, India sees itself as the natural preeminent regional power.
Prime Minister Narendra Modi has doubled-down on fostering stronger
diplomatic, economic, and security ties with IOR maritime states as a
means to strengthen India’s economy, establish its role a driver of regional
growth , and simultaneously diminish China’s growing appeal, writes
CFR’s Alyssa Ayres.

“It is India’s neighbourhood that holds the key [PDF] to its emergence as
a regional and global power,” writes former Indian foreign secretary
Shyam Saran. Though Beijing deflects claims of hegemonic aspirations, it
identifies security in the IOR as a primary concern for Chinese “core
interests.” In 2015, a white paper charting China’s military
strategy indicated a shift of People’s Liberation Army Navy to focus on
both offshore water defense and open seas protection. Chinese behavior
suggests that Beijing seeks to establish a persistent regional maritime
presence. It now boasts a semipermanent naval presence through its
counterpiracy activities in the Indian Ocean and has more aggressively
asserted itself in the Pacific with extensive patrols and land reclamation
projects in disputed waters.

It is India’s neighbourhood that holds the key to

its emergence as a regional and global power.
Shyam Sara, Former Indian Foreign Secretary

China’s ambitions in the region have been described by many scholars by

the “string of pearls” metaphor, which holds that China is taking on
economic and investment projects with Indian Ocean states to secure ports
or places where its military forces could set up naval facilities or at the
very least, refueling and repair stations. Chinese experts dismiss this,
claiming that China seeks access, not bases, for economic gain. C. Raja
Mohan, director of Carnegie India, a regional center of the U.S.-based
Carnegie Endowment think tank, argues that as rising powers, China and
India’s pursuit of partnerships with smaller regional states is inevitable.
“Everyone is playing this game,” he says. “Bases is going to be the name
of the game in the Indian Ocean, and that game is going to be pretty
attractive in the coming years.”

Still, “maritime competition between China and India is still nascent and
should not be overblown,” cautions CFR’s Daniel S. Markey in
a Contingency Planning Memorandum. Still, he writes that a “tit-for-tat
politico-military escalation” is possible in the larger Indo-Pacific, a region
spanning both the Indian and Pacific oceans.

What fuels China-India tensions?

China-India relations are fraught, colored by historical disputes and the

perceived threat to India of China’s rise. Tensions have persisted despite
overtures by Chinese President Xi Jinping and Indian Prime Minister
Narendra Modi. Much of the friction stems from a longstanding
dispute along a 2,400-mile border in India’s Arunachal Pradesh and
China’s Tibet and the legacy of the 1962 Sino-Indian War along the
Himalayan border.

The expansion of a Chinese presence in the Indian Ocean has heightened

India’s concerns. Beijing says its activities are commercially motivated
and intended to better protect its interests and people abroad. However,
Brahma Chellaney of the Center for Policy Research (CPR), an
independent Indian think tank, argues a ramped up Chinese presence in
the Indian Ocean and elsewhere is consistent with Xi Jinping’s intention
of making maritime power central to achieving Chinese dominance in
Asia.

While China’s aims are disputed, both sides continue to ramp up military
capabilities in the ocean region. China continues to deploy greater
numbers of naval forces to support counterpiracy operations in the western
Indian Ocean, and invests and sells arms, including tanks, frigates,
missiles, and radar, to India’s neighbors. Beijing is currently restructuring
its military: Xi Jinping announced in September 2015 that the People’s
Liberation Army would cut 300,000 of its troops to redistribute resources
to sea and air capabilities. As China adapts its military force to meet its
global ambitions, its posturing has grown bolder. In October 2015, China
finalized the sale of eight submarines to Pakistan, and in recent years,
Chinese submarines have docked at the Sri Lankan port of Colombo and
the Pakistani port of Karachi. More still, Beijing’s land reclamation efforts
and assertive behavior in the Pacific could bleed into the region, suggest
the U.S. Naval War College’s Andrew Erickson and Kevin Bond.

Bases is going to be the name of the game in the

Indian Ocean, and that game is going to be
pretty attractive.
C. Raja Mohan, Director, Carnegie India

India is also reinforcing its regional maritime presence. “Activating

partnerships and expanding capabilities in the Indian Ocean has
been central to our quest for security,” said Indian Foreign Secretary
Subrahmanyam Jaishankar at the launch of Carnegie India in April 2016.
The country has vowed to spend billions to build up its navy, including
anti-submarine capabilities, has sent vessels to visit the South China Sea,
and called for freedom of navigation and the peaceful resolution of
territorial disputes as part of its Act East policy. The construction
of military bases, modernized equipment and fleets, new maritime assets,
and the expansion of security ties are all part of New Delhi’s push to
assert itself as the region’s leader. Modi initiated the first bilateral India-
Australia exercises and India participated in multilateral naval games in
the Bay of Bengal with the United States, Australia, and Japan. David
Brewster of Australian National University says there is little doubt that
despite India’s traditional principle of nonalignment, outreach to the
United States, Australia, and Japan are calculated moves that could play a
significant role in counterbalancing China.

What other countries have strategic

interests in the IOR?

Small regional states, such as Bangladesh, Maldives, Myanmar,

Seychelles and Sri Lanka, are recipients of both Chinese and Indian aid
and investment, primarily for transport and infrastructure development.
The majority of their foreign policy ties are determined by what deals can
be made to help them meet their national development goals, says Nilanthi
Samaranayake of Virginia-based CNA, a nonprofit research and analysis
organization.

Global powers from outside of the region also have an interest in

maintaining the ocean’s security. The United States operates a naval
support facility—Diego Garcia—on UK-leased territory in the central
Indian Ocean, while France maintains a presence in the region
from Reunion, its Indian Ocean island outpost. Australia has a modern
 naval force operating in the ocean, and the IOR is increasingly
featured [PDF] in defense, national security, and maritime strategies
developed in Canberra.

What are transnational concerns in the

ocean?

Despite the rise in competition, multilateral cooperation involving China,

India, and other states, takes place on issues including piracy, disaster
relief, and drug smuggling. The following areas show potential for
expanded cooperation:

 Counterpiracy. Piracy has been costly to ocean-faring traders but global

and regional responses have shown success. Oceans Beyond Piracy, a
Colorado-based non-profit, estimates that the economic cost of piracy off
the Somali Coast amounted to $2.3 billion in 2014, a drop from
the estimated $5.7–$6.1 billion loss [PDF] two years prior.
Source: UNITAR-UNOSAT

Counterpiracy efforts near the Gulf of Aden have been the most successful
manifestation of regional cooperation. More than eighty countries,
organizations, and industry groups participate in operations in the IOR
under the auspices of the ad hoc, voluntary Contact Group on Piracy off
the Coast of Somalia (CGPCS), created in January 2009 in response to UN
Security Council Resolution 1851 [PDF] on Somali piracy and armed
robbery at sea. Since military cooperation began, the volume of attacks
has shrunk. Yet experts warn that pirates have turned to
more sophisticated equipment [PDF] and if naval pressure in the western
Indian Ocean is reduced, pirate activity would rise again.

China and India carry out anti-piracy activities independently, deploying

naval vessels to escort merchant ships, provide protection, conduct rescue
 operations, and confiscate contraband. In April, China dispatched its
twentieth naval escort task force to the Gulf of Aden. Meanwhile, India
has prevented forty piracy attempts and developed an online registration
service for merchants to request Indian naval escorts.

 Search and Rescue. Another recent example of cooperation was the search
effortfor the Malaysia Airlines Flight 370, which disappeared en route
from Kuala Lumpur to Beijing in March 2014. At the height of operations,
twenty-six countries, including China and India, contributed to the search
mission. Wreckage believed to be from the flight was discovered in July
2015.

 Disaster Relief. There is room for growth on humanitarian aid and disaster
relief cooperation. After the 2004 Indian Ocean Tsunami, governments,
including Australia, France, India, Japan, Malaysia, New Zealand,
Pakistan, the UK, and the United States, participated in extensive relief
and rehabilitation efforts [PDF]. Separately, China disbursed [PDF] more
than $62.2 million in aid, shipped supplies, and dispatched medical and
rescue teams. More than a decade later, the IOR’s vulnerability to natural
disasters and the subsequent effects of climate change could provide
impetus for more extensive collaboration.

 Fisheries. Consumers in Indo-Pacific countries on average obtain 20 to 50

percent [PDF] of their animal protein from fish, and industrial fishing is
an important export for smaller countries in the IOR. Regional players
identify overfishing and environmental degradation as serious risks to
sustainable economic development and food security, but mechanisms to
establish sustainable fisheries have not been effective. The Stimson
Center’s David Michel blames [PDF] challenges to cooperation on the
region’s existing security architecture: the majority of institutions, such as
the Indian Ocean Tuna Commission, only operate at a sub-regional level
or focus on specific species.

What are the prospects for improved

regional governance?

Experts say there is a growing need for an effective regional security

architecture, similar to extant mechanisms among major powers in the
East and South China seas, to address the IOR’s diverse challenges.
Regional multilateral organizations, such as the Indian Ocean Naval
Symposium (IONS), which facilitates the exchange of military views to
enhance communication and transparency across the region’s naval forces,
do exist. However, experts say IOR members must undergo an extensive
region-building project for countries to be willing to act together more
effectively.

China and India have expressed eagerness to assume greater

responsibility [PDF] in policing maritime global commons and to be
recognized as major powers. China’s activities are likely to expand in
conjunction with its One Belt, One Road initiative, but this does not have
to come at India’s expense, say some experts. “India is going to have to
come to terms with China’s entry into the Indian Ocean,” states CNA’s
Samaranayake. New Delhi could also benefit from partnering with Beijing
to integrate the region. Broader initiatives like the BRICS Development
Bank and the Asian Infrastructure Investment Bank (AIIB) are also
pulling India into to a larger leadership role alongside China.
The biggest challenge to creating coordinated effective action across the
Indian Ocean is the lack of institutions of governance that cover the whole
space, says CFR’s Alyssa Ayres. “It may sound mundane, but
institutionalized organizations with a regular diplomatic calendar and
senior officials meeting to work on an agenda drive processes of
consultation and action.”