On India’s Navy Day in December, Indian Chief of Naval Staff D.K. Joshi
declared that the Indian navy was prepared to operate in the South China
Sea if called upon to do so. The government subsequently downplayed
Joshi’s remarks, but the fact remains that the South China Sea has emerged as a vital sea corridor
for India, with more than half the country’s trade currently passing
through it. The security of the South China Sea will grow even more
important to New Delhi in the years to come as India looks to link
itself to East Asian supply chains and Indian energy imports through the
corridor grow.
Speaking at a conference in New Delhi last
month, Indian Foreign Minister Salman Khurshid said that the country’s
energy requirements were growing at a “terrifying pace.” He further
observed that if India continued to grow at its current rate of 8-9
percent, its energy import dependence would also increase dramatically.
Khurshid projected that India would be importing up to 57 percent of its
coal, 94 percent of its oil and 57 percent of its gas within the next
two decades, compared to 15 percent for coal, 80 percent for oil and
15-18 percent for gas currently. India now imports 70 percent of its oil
and 80 percent of its liquefied natural gas (LNG) from the Middle East.
But given recent instability in that region, there is a sense of
urgency in India about pursuing more diverse sourcing options.
These
will include supplies from the Russian Arctic and Far East and the
Pacific coast of North America as well as fields in the South China Sea
itself. All of these sources will depend on freedom of navigation on the
high seas. To secure that freedom, India will require greater
coordination with Japan as well as some kind of understanding with
China.
For instance, Indian gas giant GAIL recently concluded a multiyear LNG sourcing contract
with Russia’s Gazprom, with deliveries to India specified to begin no
later than 2019. It is believed that the supplies will come from the
Yamal LNG project in Russia, which would be operational by then. Such
shipments would require traversing the South China Sea. The same is true
of shipments from Russia’s only existing liquefaction export terminal
at Sakhalin II, from which India already gets some gas, with more
supplies under discussion.
Beyond Russia, Indian hydrocarbon
companies are also looking to make investments in North American shale
oil and gas. Talks are currently underway for a potential $5 billion
investment by a consortium of Indian hydrocarbon companies in the
northern Alberta oil sands deposit being developed by ConocoPhillips.
Moreover, India is also one of the likely Asian destinations for LNG
from Canadian liquefaction terminals in British Columbia. Naturally, any
supplies from Pacific North America will also come to India via the
South China Sea.
Meanwhile the South China Sea littoral is
itself becoming an important source for Indian hydrocarbon imports.
India’s ONGC Videsh Ltd. has refused to abandon its stake in offshore
oil blocs administered by Vietnam despite Chinese pressure. The company
is also in talks with other littoral states for similar offshore fields.
Beyond oil and gas, India already imports a significant amount of coal
from South China Sea littoral countries such as Indonesia and the
Philippines.
Given these trends, it is clear why Indian defense
officials have reiterated their commitment to maintaining the freedom of
navigation on the seas in general and the South China Sea in
particular. At the moment India is in consultation with the Association
of Southeast Asian Nations and Japan on forging a common approach toward
countering China’s aggressive maritime moves in the region. India is
also still considering Vietnam’s offer of naval berthing rights at Nha
Thrang.
Coordination with Japan is also gaining steam with the
re-election of Prime Minister Shinzo Abe, who has pursued a heightened
Indian naval role in Asian seas in the past and is keen to advance
dialogue in this sphere. The Indian side seems to be reciprocating his
overtures -- the complexity level of joint exercises between the Indian
and Japanese navies seems to have risen recently, and in an
unprecedented move, Japan has also offered to sell maritime patrol craft
to India.
But Indo-Japanese coordination is only one side of the
coin. While both Asian democratic powers understand the need to send a
coherent signal to China, they also realize that confrontation would not
be in anybody’s interest. Up to now, one source of leverage India has
had over China is the fact that the Indian navy keeps watch over the sea
lines of communication in the Indian Ocean, through which most of
China’s energy and other imports transit.
Yet India may lose this
leverage as Indian energy supplies increasingly traverse the South
China Sea and other areas where the Chinese navy has credible
operational capability, creating a situation where symmetric counters
exist for both countries. This may be an important reason behind India’s
positive response to recent Chinese overtures
for dialogue on maintaining stability at sea. Indeed, the fact that the
India-China maritime dialogue will now include issues such as shipping
costs and transportation, on which both sides have similar views, shows
that mutual deterrence may have already moved both sides to emphasize
areas of convergence rather than discord. But an even broader
India-Japan-China trilateral dialogue is probably required to create the
kinds of confidence-building mechanisms needed to prevent further
tensions and even conflict, which currently seems to be lurking around
the corner.
Saurav Jha
