Eyeing China push into Indian Ocean, India boosts navy

India plans to strengthen its naval presence in the waters off its southern shores, the country's navy chief said on Wednesday, in a move aimed at countering China's push into the Indian Ocean region (IOR).

Vice Admiral Nirmal Verma said the navy was working on a blueprint to protect its maritime interest in the Indian Ocean and inducting dozens of new ships and fighter aircrafts to counter other naval powers.

"We have identified what our maritime interests are in the region, and we are looking to convert it into capabilities that we like to have to control our sea areas," Verma told a news conference, replying to questions on China's growing presence.

India and China are locked in a battle of influence over the Indian Ocean region, with China creating a "string of pearls" or listening posts from Pakistan to Myanmar to encircle New Delhi.

The world's two most populous nations fought a brief but brutal war in 1962. Though another conflict is highly unlikely, India's Air Force chief has gone on the record as saying China was a bigger threat than Pakistan to India.

Investors are closely watching how China and India, the world's most populous countries driving economic growth in the aftermath of the global financial crisis, use their growing clout.

China has made strides developing strategic assets, such as  the Gwadar port in Pakistan, the Sri Lankan port of Hambantota and assets in Yangon.

Sri Lanka sits next to shipping lanes that feed 80% of China's and 65% of India's oil needs.

"The bulk of the energy requirements as far as China is concerned flows through the IOR. It is a very substantial amount that is there," the navy chief said, when asked about Chinese interest in the region.

Verma said India was taking stock of the situation in the Indian Ocean and China's deployment of naval ships in the region from time to time.

"As far as we are concerned, we have our own deployments and we assess them and hope to protect India's maritime interest in the IOR and beyond," Verma said.

The Indian navy will go through a massive modernisation process and is set to replace its ageing fleet with 40 new ships in the next few years, including destroyers, fighters, aircraft carriers and submarines to secure the region, Verma said.

India is one of the world's biggest arms importers. The government plans to spend more than $30 billion over the next five years to upgrade its largely Soviet-era arsenal to counter potential threats from Pakistan and China.

China, for its part, has reported nearly two decades of almost unbroken double-digit rises in declared defence budgets to 480.7 billion yuan ($70 billion) this year. Many analysts believe China's real level of military spending is significantly higher.

The People's Liberation Army is being transformed into a modern force capable of fighting short, high-intensity conflicts against high-tech adversaries. Its navy is considering building an aircraft carrier.