South China Sea: Is India fishing in troubled waters?

China is heavily dependent on imports for its energy needs. With a booming economy and an urge to do more, the desire to become self reliant is increasingly felt.  Hidden treasures of South China Sea is the answer which the Chinese have been looking for. The volatile global oil market has added fuel to fire and provoked regional instability. With the exit of US from its bases in the region, the Red Dragon is getting desperate to call the shots even if it means being aggressive towards the South East Asian countries. This change in ‘attitude ‘ has alarmed Taiwan, Philippines, Malaysia, Brunei and of course Vietnam. All these countries claim sovereignty in some form or the other over the disputed islands in the sea.

 The South China Sea contains rich oil & gas reserves, estimated at up to 28 billion barrels. But limiting the Chinese new found ‘assertiveness’ to its energy needs would be a fallacy. The South China Sea is the 2^nd most busiest sea trade route in the world and by claiming sovereignty over tiny islands in the sea, it can virtually call the shots.  One can understand the importance of this route by the comments of US Secretary of State Hillary Clinton at ASEAN meet in Vietnam last year. She said, ‘The United States has a national interest in freedom of navigation, open access to Asia’s maritime commons and respect for international law in the South China Sea”.

Why China wants India out of South China Sea

India, the world's fourth-biggest oil importer, buys in nearly 80% of its oil needs as expanding refining capacity has outpaced growth in local oil output. ONGC's local oil output has been almost stagnant in the last five years. The Indian government has charged ONGC with securing energy supplies overseas to fuel the country's fast-growing economy. ONGC Videsh Ltd., the overseas investment arm of Oil and Natural Gas Corp, has a stake in 33 projects in 14 countries including Vietnam.

ONGC Videsh has been in Vietnam for quite sometime in offshore oil and natural gas exploration field and that they were in the process of expanding cooperation and operation and Essar, a subsidiary of Essar Oil, has also been awarded a gas block in Vietnam. India has an investment of $400 million in Vietnamese hydrocarbons sectors, with ONGC-Videsh (OVL) having investment of $225 million in oil exploration projects in South China Sea. This has pitched OVL directly against Chinese state owned the China National Offshore Oil Corp. (CNOOC) which is currently operating in South China Sea.

As a South Asian country, India actively takes part in East Asian issues through the support of the US, which has been advocating for Asian countries to counter China. India and Vietnam have already agreed to add greater content to their bilateral relations in defense and security, even as both sides are considering a request for Indian assistance in training Vietnamese naval crew to operate Russian-made Kilo-class submarines.

China is wary of increased Indian presence in waters close to its shores. The incident of harassment of an Indian navy ship, INS Airavat, sailing in the South China sea in July by the Chinese navy to get off the waters as it was China’s sovereign waters. Chinese frustration can be gauged from the fact that the Indian ship was on an official port call to Vietnam. Since then China has stepped up the ante and People’s Republic of China (PRC) foreign office spokesperson is a step further to scare India off South China Sea. 

But Govt of India has made it clear that its investment in Vietnam and bilateral relations will go ahead notwithstanding Chinese objections. The recent visit of Foreign Minister SM Krishna has further cemented its stand. This snub is being seen as a counter measure for Chinese presence in Pakistan occupied Kashmir (PoK).  India has been repeatedly asking China to keep off PoK as it is a disputed territory.  Despite this, China has not only shown keen interest in helping Pakistan in developing infrastructure there but also is planning to open old silk route for trade.

South China Sea project helps India kill two birds with one stone. It will bring economic benefits to India while also balancing out China politically. With US firmly on its side, India is a country to watch out for in South East Asia.