“String of Pearls” in Indian Ocean

Indian Ocean has played a vital role in international trade since antiquity. Right from Roman period to Portuguese period this route has been used by various empires to establish trade relations with India and other countries in this region. In current scenario its role has become more even more prominent as half of the world’s maritime trade is shipped through the Indian Ocean. This route connects the Middle East, Africa and East Asia with Europe and America. A very heavy traffic of petroleum and petroleum products from the oil fields of Persian Gulf and Indonesia passes through it. Apart from being a lifeline to international trade this region is also important for offshore oil exploration to which it contributes 40% of the world production.
India and China being two of the most fast developing economy in the world, has vested interest in this trade route. China imports almost 80% of its oil need most of which passes through this region.  This makes the route strategically very critical for China. To ensure its energy security in future, it plans to either secure this route or to find an alternative route.
Similarly for India, this region and route is a natural concern, as it lies in its own backyard.40% of Indian trade with the littoral countries takes place through this route. . The geographical advantage enjoyed by India makes it an obvious naval power in Indian Ocean.
Observing its vulnerability to any hostile Indian action in Indian Ocean, in war or war like situation, China is aggressively planning to increase its naval presence in the region. China has made various naval pacts with countries like Pakistan, Bangladesh, Sri Lanka and Myanmar to maintain regular presence of Chinese naval fleet in Indian Ocean. These pacts include Joint port construction, port enlargement and maintenance etc. Booz Allen Hamilton, an American Public consulting firm, termed this strategy of encircling India as “String of Pearls”.
The “String of Pearls” is a process of methodically establishing a series of highly powerful and interconnected nodes throughout a landscape which accomplish two things:
1) Solidify a critical supply line.
2) Envelop or “choke off” a rival.”
China has naval presence in Gwadar Port in Pakistan, Hambantota Port in Sri Lanka, Coco islands in Myanmar and Chittagong Port in Bangladesh in various capacities. This involvement has both economic as well as strategic dimension. The “String of Pearl” goes further to South East Asian countries like Thailand, Cambodia and Vietnam which shows elaborate Chinese plans of having hegemony on this crucial trade route.
But it will be too early to say that China has established itself as a regional naval super power. Geographical constraints play a big role in this region. In spite of heavy investment and involvement, China has to depend upon the local players to implement its naval strategy. Chinese ports in these countries are as safe as these countries themselves and there is little China can do in this regard. For e.g. Gwadar Port in Pakistan is situated in Baluchistan province where the local sentiments run against the Federal Government and National Army which is dominated by the Punjabis. In 2004, three Chinese engineers were murdered in Gwadar, and in 2007, a bus carrying Chinese engineers was bombed in the southern town of Hub. Ground realities also reflect the same story. Having become operational shortly after the Chinese completed the first phase of development in 2007, the port only received its first commercial cargo ship almost two years later, in July 2009. Similarly Sri Lanka recently recovered from the internal war in which it was indirectly supported by the Indian Government.
Bangladesh also has a Pro -Indian Government headed by Sheikh Hasina Wajed. Finally Myanmar an otherwise close country is playing its cards tactfully. It has developed good relations with both the countries in return of support to its dictatorial Junta regime.
India has cautiously responded to all these developments. At present India have good relations with almost all of its neighbours except Pakistan. The geostrategic advantage enjoyed by India in this region is too big to be nullified by temporary Chinese bases in the Ocean. Moreover, Andaman Nicobar Island provides strategic depth to Indian naval capabilities in the region through which India is in the position of striking deep in the Ocean. India has bolstered its “Look East” Policy to counter China’s activities in this region. It has established strong commercial, cultural and military ties with the Philippines, Singapore, Vietnam and Cambodia. It has also signed free trade agreements with Sri Lanka and Thailand and forged numerous free trade agreements with other East Asian economies. It is also negotiating agreements with Japan, South Korea, and Association of Southeast Asian Nations (ASEAN) member states. South Korea and Japan remain amongst the major sources of foreign investment in India. India is also aiming to breathe fresh life into Indian Ocean Rim Association for Regional Cooperation (IOR-ARC), a grouping of 18 members Indian Ocean nations for greater economic cooperation.
The actions and counter actions by both the countries imply that Indian Ocean will remain a crucial region from geostrategic point of view. As its act as the pipeline of Petroleum products to the world, all these activities concerns not only the regional players but whole world at large. China is trying its best to encircle India but India is also fully prepared to counter these actions. This region will continue to hog the limelight in coming decades.

Jayant Yadav
MBA(IB)
Indian Institute of Foreign Trade- Delhi Batch 10-12

(This article was published in the August edition of "Vishvyapar"-The IB Magazine of "Delhi School of Economics" )