Power Play in the Indian Ocean
The Great Game Moves to Sea
India, China and the United States, the three major powers, which together account for nearly half of the global economy, are vying for influence in the Indian Ocean arena. All three of them view the region through their own geostrategic frameworks, ensuring intense jostling at best or conflict at worst. India has the “Security and Growth for all the Region” framework, a combination of its Act (or Look) East and the Think West policies. China has the Maritime Silk Road, which is half of the Belt and Road Initiative. The United States has the Indo-Pacific Strategy (also known as the Free and Open Indo Pacific), a natural successor to the Asia-Pacific rebalance.
“In terms of global political significance, the Atlantic Ocean can be viewed as the ocean of our grandparents and parents; the Pacific Ocean as the ocean of us and our children; and the Indian Ocean as the ocean of our children and grandchildren.”
— Craig Jeffrey; Director and CEO Australia-India Institute
The Indian Ocean region will continue to be buffeted by tripolar competition involving China, India and the United States. Each state’s approach to the increasingly crowded Indian Ocean environs is informed by history, economic interests and simple geography. Three significant divergences in the three countries’ frameworks are their perspectives on the Middle East, Pakistan’s regional role and the balance between military and non-military foreign policy tools. Friction resulting from any of these divergences could undermine the success of any of these national strategies. Ultimately, China’s more integrated strategy may give it an edge over America’s more disjointed approach and India’s more inward focus.
India defines the region as extending from the African littoral to Southeast Asia. In 2015, Indian Prime Minister Narendra Modi put forward “Security and Growth for All in the Region,” or SAGAR, as an early, high-level articulation of the Indian vision. In 2017, External Affairs Minister Sushma Swaraj specifically defined the region as extending from the Gulf of Aden in the west, through Chabahar Port in southwest Iran, and over to Burma and Thailand in the east. Notably, India does not view Pakistan as a part of this regional cooperation strategy, instead sees it as an enemy. Similarly, India tries to isolate its long history of land border disputes with China from its wider policy towards the Indian Ocean, even though countering Beijing is one of New Delhi’s goals.
India’s focus on the Indian Ocean area is relatively new, dating back only to the 1990s. For most of the period since it gained independence in 1947, India has been preoccupied with land border threats posed by Pakistan and China, and has apparently lacked the ambition and capacity to exert influence beyond its immediate neighbours.
However, starting in the early 1990s, India had to look further afield to address severe economic problems and cope with the loss of its closest strategic partner, the Soviet Union. New Delhi initiated the Look East policy to build trade and commercial ties to booming Southeast and East Asian states, which have been crucial in stimulating India’s economic growth and its economic and geopolitical rise more generally. New Delhi has also built closer trade and economic ties with Saudi Arabia, the UAE, Oman and Iran to secure energy resources for its growing economy, to expand trade and commercial links and to support the Indian diaspora working in these countries. As a result, India’s more militarized continental approach has begun to shift over the past quarter-century toward an economically focused strategy for the region.
In economic terms, India’s recent budget has raised the allocation for providing financial aid to friendly countries in the Indian Ocean Region by over 26 percent. The aid budget has not just been raised, but redirected as well. While Bhutan retains its slot as India’s largest aid recipient, Indian Ocean island countries and littoral states feature high on the list of large aid recipients. After Bhutan, tiny Mauritius will be the second-largest recipient of Indian aid. Another island nation, the Maldives, is in the fourth place.
As such, New Delhi has emphasized commercial investment, infrastructure and diplomatic engagement. These drivers will remain dominant because growing trade and commercial ties, including energy imports, are critical to India’s domestic economy and electoral politics. Military and security factors are gaining importance as China increases its military presence in the Indian Ocean — in particular, the Indian Navy is increasingly focused on countering its Chinese counterpart. However, absent a direct confrontation, it seems likely that military factors will remain secondary drivers. In addition, the dominance of the army in Indian military planning, together with persistent problems in acquiring advanced naval and air equipment to operate in the Indian Ocean, will continue to undermine India’s ability to be a strategic partner to the United States in the region. This is true despite enthusiastic advocacy by India’s navy and air forces, which is then amplified in the Indian press and think tank community.
China takes a more sweeping approach. It defines South Asia and the Indian Ocean as an extension of its Maritime Silk Road, the trade and infrastructure corridor linking coastal China to other Asian countries. The Maritime Silk Road is half of China’s broader Belt and Road Initiative, which seeks to expand China’s links throughout Eurasia. Thus, Beijing treats the region as extending from coastal China, through Southeast Asia, into the Indian Ocean, and all the way to the Saudi peninsula and African littoral. Chinese view of the region is an integral part of a broader geo-economic and geostrategic vision for China and the world. The land half of Belt and Road, the Silk Road Economic Belt, extends from western China through Central Asia to the Middle East, the Caucasus, and Russia. Both axes have endpoints in Europe and at its grandest ambition the BRI appears to be a plan for China to dominate Eurasia. This broad geographic vision leads Beijing to pursue an integrated set of trade, commercial, diplomatic, and military initiatives from the South China Sea to the African littoral.
The original drivers of the Belt and Road Initiative are trade and commercial factors, not military ones. Beijing is seeking to use the project to sustain its economic growth through increased international trade, domestic interior development, and management of internal security concerns in Xinjiang and Tibet. It is only in the past few years that military drivers have come to play a greater role in the strategy; for example, the establishment of a military base in Djibouti. These factors still remain secondary given the importance China places on its economy and internal stability. In this regard, Beijing and New Delhi share the view that trade and commercial initiatives should play the dominant role in regional strategies.
Unlike with India’s strategy for the Indo-Pacific, however, Pakistan is a central element of China’s approach, linking the maritime and continental components of the Belt and Road Initiative. India, and to a lesser degree the United States, views Pakistan as a declining power that should be internationally isolated for its support of terrorism. In contrast, the China-Pakistan Economic Corridor is one of the most important elements of the Belt and Road since it provides a direct land bridge from China to the Arabian Sea and allows trade access to support economic development in China’s restive west. Illustrating its priorities, China has promised some $60 billion to develop this corridor and has already made substantial investments in Pakistan focusing on energy and transport infrastructure, including the port of Gwadar in western Pakistan. While some doubt the viability of many of these projects, this investment clearly reflects Beijing’s view that Pakistan is essential to its regional strategy.
The United States
The US strategy toward South Asia and the Indian Ocean arena is an extension of an Asia-Pacific perspective based on over seven decades of US leadership and forward presence in East Asia. The current iteration of this view is the Indo-Pacific Strategy, a natural evolution of the “rebalance,” or “pivot,” toward Asia initiated in 2011. Importantly, the strategy ties the growing US-India relationship to the wider Asia-Pacific region, reflecting the growing economic, trade, and diplomatic links between the littoral countries of the Indian Ocean and those in Southeast and East Asia.
However, the geographical reach of the Indo-Pacific Strategy essentially stops at the India-Pakistan border and heads south in a rough line to Antarctica. The United States largely excludes Pakistan, the Arabian Peninsula, Iran, and the African littoral from its conception of the Indo-Pacific region. For 15 years, the United States has actively sought to de-hyphenate India from Pakistan as a part of an effort to build ties to New Delhi. Moreover, in contrast to China, the United States sees Pakistan as a part of its South Asia policy, which is focused on counter-terrorism.
Along the same lines, the US approach treats Iran, the Arabian Peninsula, and the African littoral as Middle Eastern or continental African issues. The resulting strategy in this area is totally shaped by concerns about energy, counter-terrorism, and other security matters. This conceptualization is appropriate given America’s strategic interests in the Middle East, its ongoing troop commitment to Afghanistan, and its global role, but nonetheless it is a notably different definition from India’s and China’s.
The US definition is largely based on almost four decades of the military command boundaries between Indo-Pacific Command (INDO-PACOM) and Central Command (CENTCOM), although part of the African littoral falls in Africa Command’s (AFRICOM) area of responsibility. In contrast, India’s and China’s visions have evolved more recently, allowing those two countries to better take into account contemporary geopolitical factors.
Indeed, in shaping the Indo-Pacific Strategy, the United States largely hewed to the military’s geographical definition — which contributes to the emphasis on military means. To be sure, perspectives differ between and within US military and civilian agencies, but in general, the mismatch in resources and effort between military and non-military bureaucracies gives the edge to the former.
The South Asian and Indian Ocean regions have not escaped the shortage of US diplomatic personnel, high turnover in key positions, and international uncertainty about America’s global role. As a result, the United States increasingly has only one tool in its toolbox for these regions: the military. Despite policymakers’ intentions, the Indo-Pacific Strategy has largely evolved into a military-dominant strategy, shaped by the military’s longstanding role in defining the region’s geography and driven by the need to counter China militarily. This will limit America’s ability to counter Chinese infrastructure investment and economic cooperation, allowing China to make political inroads with regional governments looking for investment and aid. Compounding the friction resulting from this militarized strategy is the deepening US-China trade war undermining bilateral relations.
Prospects of a Tripolar Great Game
More than any other current factor, India and Chinas’ relative emphasis on non-military foreign policy tools, in contrast to America’s use of the armed forces to achieve foreign policy objectives, will determine the fate of the three competing strategies. However, adjustments in US strategy, especially increasing non-military investments and diplomatic engagement and focusing more on collaborative economic ties in the region, can help address the tensions resulting from this disconnect.
China’s large and growing economic investment is reshaping the region, forcing regional governments and the United States to adapt. Smaller states, largely focused on economic development and internal security, seek to avoid direct military confrontations and are averse to choosing an exclusive large power patron. Assuming Beijing continues collaborative trade and commercial initiatives, investing vast sums of money, its influence is likely to continue growing. However, despite its wealth, China faces two major risks. First, if Beijing’s actions come to light or come to be perceived as neo-colonialism, Beijing will face costly regional reversals — as it recently did in the Maldives, for example. Rhetoric about “win-win” notwithstanding, China’s Belt and Road policies increasingly mirror those of European colonial powers seeking concessions in Imperial China. Second, China’s growing military presence in the region could end up being an expensive foray that yields minimal comparative advantage relative to India or the United States in the event of a war.
India, as the largest country in the Indian Ocean region and the one that controls the air and sea lines of communication, has the potential to dominate geographically. Although India has steadily increased its engagement with the region in the past two decades, it faces several challenges to its further expansion. It lacks the resources to compete head-to-head with China in trade and commercial investments. Its naval and air modernization is plagued by inefficiencies, corruption, and competing requirements. It still has major domestic economic challenges and competing social priorities. These factors compel New Delhi to carefully calibrate its resistance to Beijing. India’s new strategic partner, the United States, is proving to be bilaterally confrontational, regionally destabilizing, and globally unpredictable. The resulting destabilization and increased chances of a US-China war that India wants to avoid further incentivize Indian calibration.
Smaller countries will be caught between the lure of Chinese largesse and a broad preference for a US-led security architecture and rules-based system. Despite the formation of the International Development Finance Corporation and ongoing Millennium Challenge Corporation efforts, and the US pledge of $113 million in non-military aid in 2018 to the Indo-Pacific strategy stands in stark contrast to the tens of billions China has spent on the Maritime Silk Road for civilian infrastructure and economic projects,. A US shift to focus on diplomacy and increased aid through the collaborative multilateral forums and trade agreements that smaller states favour will effectively exploit regional concern about Chinese influence.
Importance of the Indian Ocean
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 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.