Indian Navy undertook mission-based deployments in Areas of Interest in the Indian Ocean Region (IOR) to safeguard national maritime interests and maintain continuous/ near continuous presence in areas of significant maritime importance in the IOR. These deployments were in consonance with the Prime Minister’s vision of ‘Security And Growth for All in the Region (SAGAR)’. IN ships and aircraft were regularly deployed in the Gulf of Oman/ Persian Gulf, Gulf of Aden/ Red Sea, South and Central IOR, off Sunda Strait, Andaman Sea/ approaches to Malacca Strait and Northern Bay of Bengal. These deployments facilitated enhanced Maritime Domain Awareness, swift Humanitarian Assistance and Disaster Relief (HADR) assistance to IOR littorals, security to Indian and international maritime community and operational engagements with friendly navies through capability development and capacity building programmes.

Anti-Piracy Patrol in Gulf of Aden commenced in 2008 to ensure safe passage of IFMVs. 107 IN ships have been deployed in the Gulf of Aden since commencement of patrols in 2008.

Maritime Security Operation code-named Op Sankalp in the Gulf Region commenced in 2019 to ensure safe passage of IFMVs transiting through the Strait of Hormuz. Since June 2019, IN has deployed 41 warships and escorted approximately 624 Lakh Tons of cargo onboard 503 IFMVs.

In 2023, Indian Navy, has intercepted huge heroin shipments in the Arabian Sea. On May 10, 2023 an Anti-Narcotics Operation (ANO) lead to seizure of 2500 kg of contraband worth Rs. 12,000 Cr.  Since April 2021, 12 such operations have been undertaken by the IN. Narcotics worth Rs. 29000 Cr (approx. 3.5 Bn Dollars) has been seized over six operations in last three years.

P8I aircraft from INS Hansa, Goa was deployed in Northern Sector for surveillance on various occasions in support of Army/ Air Force tasking. Such deployments ensure seamless operability between all three forces and encourages jointmanship.

A Naval Special Warfare exercise off Carnic, was conducted on September 21, 2023 which included twin Air Droppable Rigid Hull Inflatable Boats (ADR) drop in tandem with Combat Free Fall (CFF).

The IN undertook its maiden operations with both the carriers in company off Goa in Early June 2023. The Western Naval Command enabled the embarkation of the largest number of carrier-borne aircraft, which included 20 helicopters of various types. These included the indigenously manufactured ALH MK III helicopters and the recently inducted, MH 60R. The event was a potent demonstration of IN’s fast-growing blue water capability and gained considerable attention from national and international media.

IN Submarine Vagir, was deployed for Long Range Deployment to Fremantle, Australia wef July 24, 2023. The submarine crew interacted with the Australian Naval representatives during OTRs at Fremantle (August 20 – 23, 2023 and August 25 – 28, 2023). The submarine returned to Visakhapatnam in early October 2023.

The Test Vehicle Abort mission (TV-D1) was launched on October 21, 2023 from Satish Dhavan Space Centre (SDSC), Shriharikota. The aim of TV-D1 launch was to validate the efficiency of Crew Escape System (CES) during an emergency abort condition while the crew module is within atmospheric limits. Post launch and successful ejection, recovery of Crew Module and recording of the launch (as required by ISRO) was successfully undertaken by IN. INS Shakti recovered the crew module which was later disembarked at Chennai. The video of crew module decent phase was also live streamed to SDSC. Assets deployed for the mission included three IN ships (Shakti, Gharial and Battimalv), SCI Saraswati, one HALE UAV and a Chetak Helicopter.

Naval Exercises

IN’s Theatre Readiness Operational Level Exercise (TROPEX), a major biennial exercise, was conducted across the Indian Ocean Region from January to February, 2023. Intense operations by more than 150 warships, submarines and aircraft, with significant participation of other Services, were conducted. The exercise culminated with a debrief at Kochi.

Tri-Services Amphibious Exercise (AMPHEX 23) was conducted at Naval Enclave Kakinada, with Visakhapatnam as the mounting base. This edition of the exercise was the largest in terms of force levels from Indian Army, with over 800 troops (being the maximum participation till date). Further, loading of large number of A and B type vehicles was also undertaken, which was the highest thus far in any AMPHEX.

ALSO READ: Vishakhapatnam to host MILAN 2024 multinational naval exercise

IN Sailing Vessel Tarini was deployed for Open Sea Sailing Expedition wef 22 Nov 22 with a crew of five (including 02 Women Officers). Tarini successfully completed a 17,000 Nm trans-ocean inter-continental voyage to South Africa and South America (Cape to Rio Race). A grand Flag-in ceremony for the crew of INSV Tarini was conducted at INS Mandovi on May 23, 2023, with Shri Pramod Sawant,   Chief Minister of Goa, as the Chief Guest. Smt Smriti Irani, the Union Minister of Women and Child Welfare, accompanied by CNS, also graced the occasion.

Exercises with Friendly Countries

IN ships Kolkata, Sahyadri and P8I participated in the 31st edition of Exercise MALABAR 23 scheduled at/off Sydney, Australia from August 11 to 23, 2023, along with ships and aircraft from US Navy, JMSDF and RAN. MALABAR 23 was conducted in two phases viz the Harbour Phase (August 11-15, 2023) encompassing cross deck visit, pre-sail conferences and delegation visits, followed by the Sea Phase (August 16-21, 2023) comprising various surface, sub-surface and air exercises involving units from all participating countries. The ships also participated in the 77th Independence Day Celebrations at Sydney, Australia.

IN ships Chennai and Teg, along with aircraft (MiG 29K, P8I, Dornier, ALH and Sea King), participated in the 21st edition of Exercise Varuna – 23 with French Navy Carrier Strike Group (comprising Charles De Gaulle, Forbin, Provence and Marne), alongwith maritime patrol aircraft Atlantique 2 off Goa from January 15 to 20, 2023. Subsequently, the FN ships Charles De Gaulle, Forbin and Provence entered Goa, while Marne entered Mumbai for the Harbour Phase of the Exercise. French aircraft Atlantique, A330 MRTT and A400M operated from INS Hansa, Goa.

IN ships Sahyadri and Jyoti participated in the 3rd edition of the Multilateral Exercise La Perouse conducted in Southern Bay of Bengal from March 13 to 14, 2023. Eight warships from six countries (Australia, India, France, Japan, UK and USA) participated in the exercise.

Sea Dragon is a multilateral Air ASW exercise conducted by US Navy. IN P8I aircraft participated in the 5th edition of Anti-Submarine Warfare (ASW) Theatre Exercise Sea Dragon 23 conducted at Guam, USA from March 15 to 29, 2023. Maritime Patrol Aircraft (MPA) from four countries (USA, Japan, Canada and South Korea) and USS Hampton (Los Angeles Class SSN) participated in the exercise.

IN Ship Trishul and Dornier aircraft participated in the annual bilateral maritime exercise Konkan 23 with Royal Navy ship HMS Lancaster off Mumbai from March 20 to 22, 2023. Both ships undertook multiple maritime drills to enhance interoperability and imbibe best practices. The exercises covered all domains of maritime operations viz air, surface and sub-surface.

IN ships Delhi and Satpura, alongwith P8I aircraft, participated in the maiden ASEAN India Maritime Exercise (AIME) and International Maritime Defence Exhibition (IMDEX) conducted at Singapore from May 02 to 08, 2023.

INS Sumedha participated in Multilateral Tri-Services Exercise Bright Star 23 conducted in the Mediterranean Sea from 6 to 13 Sep 23. The Exercise was conducted in two phases, Harbour phase and Sea phase.

IN and USN have been participating in a combined Salvage exercise since 2005. Seventh edition of IN – USN Diving, Salvage and EOD exercise (SALVEX) was conducted from June 26 June to 6 July 2023 at Kochi. For the duration of the exercise, USNS Salvor (T-ARS 52) made port call at Kochi.

IN Ships Savitri and Kiltan participated in India – Sri Lanka bilateral exercise SLINEX 23 with Sri Lankan Navy ships SLNS Vijaybahu and Samudura at/ off Colombo, Sri Lanka from 3 to 8 April 2023. IN-SLN SF exercise was also conducted as part of SLINEX 23 from 3 to 6 April  2023 at Colombo, Sri Lanka.

INS Kavaratti, along with one Dornier aircraft participated in the 4th edition of Exercise Samudra Shakti 23 conducted at Batam, Indonesia from 15 to 19 May 2023.

IN ships Tarkash and Subhadra, alongwith one Dornier aircraft, participated in bilateral exercise Al-Mohed Al-Hindi conducted at Al Jubail, Saudi Arabia, from 21 to 25 May 2023. Royal Saudi Naval Forces (RSNF) ships Badr, Abdul Aziz and two HIS-32 FACs, one Maritime Patrol Aircraft (MPA), MH60R helicopter and Karayel UAV participated in the exercise.

INS Tarkash participated in the maiden India-France-UAE trilateral exercise with FS Surcouf and Maritime Patrol Aircraft ex-UAE in Gulf of Oman from 6 to 8 June 2023.

Maiden India-France-UAE trilateral PASSEX was conducted from 7 to 8 June 2023, off Gulf of Oman. INS Tarkash, FS Surcouf and UAE Navy helicopter (Panther) participated in the exercise.

INS Satpura participated in the fourth edition of Multilateral Naval Exercise KOMODO-23 conducted at Makassar, Indonesia, from 4 to 8 June 2023. The exercise saw the participation of navies from 36 countries and was conducted between Borneo and Sulawesi.

The 5th edition of AUSINDEX was conducted from 22 to 25 August 2023 at/ off Sydney, Australia. IN Ships Sahyadri and Kolkata participated in the exercise, along with HMAS Choules and HMAS Brisbane from RAN. In addition to the ships and their integral helos, the exercise also witnessed participation of fighters and Maritime Patrol Aircraft (MPA) from Royal Australian Air Force (RAAF).

IN ships Ranvijay and Kavaratti, alongwith submarine Sindhukesari and P8I aircraft, participated in the 30th edition of SIMBEX-23, with Singapore Navy ships Stalwart, Valour, submarine Invincible and Fokker aircraft at/ off Singapore from 20 to 27 September 2023.

Assistance to Foreign Govts

INS Tarmugli was handed over to Maldives on 2 May 2023 towards capability building. The ship was re-commissioned into Maldivian Navy as MCGS Huravee. The handing over ceremony was attended by the RM. Further one Landing Craft Assault (LCA) was also handed over to Maldives.

INS Kirpan was decommissioned and handed over to Vietnam People’s Navy (VPN) on 22 July 2023 at Cam Ranh, Vietnam in the presence of CNS and RAdm Pham Manh Hung, Deputy C-in-C & Chief of Staff, VPN. CNS also visited VPN Headquarters at Hai Phong for bilateral interaction with Vice Adm Tran Thanh Nghiem, C-in-C, VPN. The transfer of ex-Kirpan symbolises the status of IN as the ‘Preferred Security Partner’ in the IOR and would be a catalyst for enhancing the existing bilateral relations between the two navies.

Towards providing assistance to friendly foreign nations, IN is undertaking refits of MCGS Victory from Mauritius. Further, INS Sharda undertook towing operation to tow MCGS Victory from Port Louis, Mauritius to Visakhapatnam.

A Tri-Services Scoping Delegation was deputed to Suriname in July 2023 to identify and evaluate the requirement of Surinamese Armed Forces. On the Naval front, technical assistance to undertake repairs of six Patrol Craft was highlighted by the Suriname side and accordingly, suitable technical team is planned to be deputed.

A five member IN Technical Team was deputed to Sri Lanka in February 2023 to assess the existing Trials Team infrastructure of Sri Lankan Navy (SLN) and indicate measures in setting-up of Trials Unit of SLN akin to IN units. As a follow-up of the visit, IN is conducting customised courses for SLN in India, as per the request of SLN. Further, spares worth Rs 1.7 cr were gifted to SLN, towards ensuring optimal availability of GoI gifted ships.

Indian Navy has progressed WSIE agreements with 25 countries and one multinational construct, till date. While such agreements with several other friendly foreign countries are being progressed, a WSIE agreement was concluded with Tanzania on 9 October 2023.

aIN ships Tir, Sujata and CGS Sarathi as part of 1st Training Squadron, whilst on overseas deployment, were utilised to provide assistance to Mauritius and Seychelles besides enhancing foreign cooperation

HADR & SAR operations

‘Operation Kaveri’ was executed towards evacuating Indian nationals from Sudan owing to military clashes between Sudanese Armed Forces (SAF) and Rapid Support Force (RSF). In order to contribute to the national effort for evacuating Indian nationals from Sudan, three mission deployed IN ships viz Teg, Tarkash and Sumedha, with HADR items and medical teams, were diverted to Red Sea. In a challenging mission, in the absence of any support infrastructure ashore, Sumedha, the first ship to arrive, entered the war zone and undertook Non-Combatant Evacuation Operations. Thereafter, various multi national forces including China, France, USA and UK also undertook alongside evacuation. A total of 1490 Indian nationals were evacuated by three IN ships.

ALSO READ: DEFENCE REVIEW 2023 – IAF Operations and Exercises

In the aftermath of devastation caused by Severe Cyclonic Storm Mocha off Sittwe, Myanmar, on 14 May 2023, India launched Operation Karuna, as part of Mission SAGAR, to provide Humanitarian Assistance and Disaster Relief (HADR) material to Myanmar. Four IN ships namely Shivalik, Kamorta, Savitri and Gharial, were deployed to Yangon, Myanmar for transhipment of HADR items from 18 to 20 May 2023.

P8I aircraft was launched on a benign mission on 17 and 18 May 2023 for search of Chinese fishing vessel Lu Peng Yuan Yu 028. P8I sighted the capsized CFV Lu Peng Yuan Yu 028 and a life raft. The positions were relayed to PLA(N) 44th APEF operating in the area. This was the first occasion in which an IN aircraft provided SAR assistance to a Chinese vessel.

During the year, the Indian Navy provided assistance to civil authorities for fire fighting, SAR and humanitarian assistance.

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While the Goa Maritime Conclave sought to project the Indian Navy’s cooperative engagement at the strategic-operational level, by providing a forum for the Chiefs-of-Navy and Heads of Maritime Agencies in the Indian Ocean Region, the IPRD, on the other hand, was the principal manifestation of the Navy’s international engagement at the strategic-level, addressing ‘holistic’ maritime security issues across the Indo-Pacific.

The first two editions of IPRD were held in 2018 and 2019 respectively at New Delhi.  IPRD 2020 was cancelled due to the Covid-19 outbreak. The third edition of IPRD was held in 2021 in online mode and the fourth edition was conducted, reverting to a physical format, at New Delhi in 2022.

Theme of IPRD-2023

The overarching theme of IPRD-2023 was “Geopolitical Impacts upon Indo-Pacific Maritime Trade and Connectivity”. This year’s edition of the IPRD built upon the previous one, which focussed upon ‘Operationalising the Indo-Pacific Oceans Initiative (IPOI)’, by specifically addressing the ‘Trade, Connectivity and Maritime Transport’ pillar of the IPOI.

IPRD-2023 explored geopolitical impacts upon Indo-Pacific maritime trade and connectivity through six professional sessions spread over a three-day period. 

The sessions were:

Nodes of maritime connectivity;

China’s impact vis-à-vis maritime connectivity across the Indo-Pacific;

Maritime connectivity through shipping and trade;

Maritime connectivity through shipping and trade (Part 2);

Private industry in the safety and security of Indo-Pacific maritime trade and shipping; and

Maintaining a rules-based, safe, and secure Indo-Pacific.

Eminent speakers from 16 countries and representatives of the various embassies and high commissions attended and offered diverse regional perspectives on the subject.

Navy Chief’s Address

Speaking at the Indo-Pacific Regional dialogue organised by the Indian Navy, navy chief Admiral R Hari Kumar said that violations of established rules pose a danger to good order at sea. He described the security situation in the South China Sea as “fragile.” He warned that the region is the most militarised in the world and a “contestation” at sea can have adverse economic and social consequences.

“The fragile security situation in the South China Sea, in addition to the happenings of violations of established codes of conduct or confidence building measures, pose a clear and present danger to good order and discipline at sea,” Admiral Kumar said.

The comments were a rare direct reference to the situation in the South China sea and come at a time when China and Pakistan are undertaking large-scale naval drills in the Arabian Sea.

He said that more than 50 warships of extra regional forces are deployed in the Indian Ocean Region on various missions, including anti-piracy patrols off the Gulf of Aden and the wider Indo-Pacific has a significant naval presence, which can lead to confrontation and contestation.

“Owing to the increased presence of multinational forces, and differing interpretations of international laws, there is this fear that the region’s ‘global commons’ can change to ‘contested seas’,” he said. The navy chief added that this contestation at sea “can have adverse consequences for security-physical, social as well as economic”.

Admiral Kumar made a case for greater collaboration between nations in the maritime nation. “We are traversing through a contested present into an uncertain future. The future of global commons hinges on cooperative efforts of nations,” he said.

He said that cooperative or collaborative systems amongst like-minded maritime nations are essential for a stable future. He also made a strong case for developing interoperability and trust between nations, saying this requires a sustained and continued engagement.

Chinese Threat

China’s People’s Liberation Army Navy (PLAN) presents the greatest challenge to the Indian Navy in the Indo-Pacific region. The PLAN is supported by the China Coast Guard and the Chinese maritime militia in furthering Chinese national interest in the Indo-Pacific region.

China’s friendship with Pakistan is of concern as they together present a new challenge to India in the maritime domain. India considers the Indian Ocean region as the key to India’s security and also aims to build credibility in the Indo-Pacific.

The dispute over Taiwan and China’s aggressive posture in the South and East China Seas, and China’s rivalry with America for dominance in those waters has brought the Indo-Pacific region centrestage. China’s ‘grey zone’ operations against US maritime forces and its allies have further sharpened rivalries in the Indo-Pacific.

India’s Linkages with the Indo-Pacific

The Indian government’s has often enunciated a vision of a free, open, inclusive, and prosperous Indo-Pacific.

The Indo-Pacific is the gateway to the Indian Ocean from the east with crucial trade and security implications. Hence its is of vital interest to India as also to ASEAN countries. India has linkages with many countries of southeast Asia and east Asia. The Indian Navy has been exercising with navies of the ASEAN region for many years. The Malabar series of exercises include participation by the United States navy and Japanese Self Defence Forces. Ther Indian Navy has exercised not only in the Bay of Bengal but in the western Pacific as well.

India’s ‘Look East’ policy was enunciated in the early 1990s, keeping in mind its maritime and security interests. The same has transformed into ‘Act East’ policy. In pursuit of this policy, the Indian Navy has engaged its counterparts in the Indo-Pacific by way of maritime military cooperation and humanitarian assistance and disaster relief.

Piracy, maritime terrorism, maritime crimes like drug and human trafficking, are some of the other threats which the Indian Navy has to be deal with. Other non-traditional threats include climate change-induced sea-level rise and maritime pollution. State actors in particular are challenging the rules-based, liberal international order and need to be dealt with.

Indian Navy’s Approach

The Indian Navy provides maritime security for safe trade and monitors vessels that enter or leave the Indian Ocean region through the Malacca Strait, with the Andaman and Nicobar Command’s undertaking regular surveillance. Coordinated naval patrols with Bangladesh, Thai and Indonesian navies have been institutionalised. Maritime partnership exercises are conducted with Singapore, Thailand, Indonesia, Malaysia and Myanmar, in bilateral or multilateral formats.

Indian naval ships, submarines and aircraft have undertaken long-range overseas deployments, across the Indo-Pacific as far as Japan, Hawaii and Australia.

Towards becoming a net security provider in the region, the Indian Navy has been helping smaller maritime neighbours and providing platforms and equipment for their navies. Neibhbours have appreciated India’s help in training, repairs, expertise in hydrography, maritime surveys and cartographic assistance.

The Indian Navy is the first responder in the region for humanitarian assistance and disaster relief. In the aftermath of the 2004 tsunami, earthquakes, cyclones, and pandemics the Indian Navy’s contribution with relief supplies with professionalism has created yremendous goodwill.

Comments

The Indo-Pacific region stretches from the coastlines of East Africa to the western Americas. It is today a vital oceanic space comprising critical chokepoints that carry a majority of the world’s trade. The chokepoints are situated at key geopolitical flashpoints. The Indo-Pacific is now perceived as vital for energy security, maritime security, and maritime commerce. The Indian Navy is is a formidable and potent force to provide such security in the region.

The Indian Navy is preparing a 175-ship plan (25 ships more than its current strength of 150) to particularly deal with the Chinese threat in the Indian Ocean.

India has strategic partnership with the United States, Japan, South Korea, Australia, Southeast Asian countries, and West Asian countries. India is also involved in the Quadrilateral Security Dialogue (QUAD) featuring three partners in the US, Japan, and Australia.

The Indian Navy is playing an important role in realising the Indian government’s vision of a free, open, inclusive, and prosperous Indo-Pacific.

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HI Sutton, a well-known specialist in submarine affairs, tweeted that this is a Type-035 submarine of the Ming class. At the same time, in another video from Myanmar, it is seen that for the protection of this submarine, the Navy of Myanmar had also sent one of its warships back and forth. It is believed that like India, China may have given this submarine to Myanmar or Dragon wants to sell its submarine to the Myanmar Navy through this.

Chinese submarine seen entering the country’s Yangon river
Recently, India gifted its one kilo class second hand submarine to the Navy of Myanmar. China’s Ming class submarine is not as powerful as compared to Kilo but can be very beneficial for Myanmar’s Navy. At the same time, a user named mehmlwinsoe shared the Tiktok video of Myanmar and told that this Chinese submarine has been seen entering the country’s Yangon River.

The growing closeness between the army of Myanmar and China can be a matter of concern for India. Recently, the Foreign Secretary of India has returned from a visit to Myanmar and he has asked the military government to crack down on the extremists of the Northeast. In fact, Myanmar’s army, which is crushing democracy supporters at gunpoint, has also stabbed India in the back.
Myanmar’s army has allowed insurgents operating in Northeast India to set up camp in their area. These insurgents are taking training in Myanmar and carrying out bloody attacks in Manipur and Nagaland with the help of Chinese weapons.

Extremists are attacking people of pro-democracy forces
In return, extremist organizations operating in Northeast India are attacking people of the pro-democracy People’s Defense Forces in Myanmar to help the army. India has given from war weapons to humanitarian aid to the Myanmar army. Even after this favor, the Myanmar army is helping the militants of the Northeast. According to the Asia Times report, when militant groups carried out a bloody attack in Manipur on November 13, India’s once soft and sometimes warm relations with Myanmar once again boiled over. Seven people including an officer of the Assam Rifles were killed in this attack. This includes the officer’s wife and a 6-year-old child.

It is easy for extremists to flee to Myanmar by attacking India.
This attack on the Assam Rifles was carried out jointly by the militants of the People’s Liberation Army of Manipur and the Manipur Naga People’s Front. The camps of both these groups are present within the border of neighboring Myanmar and reports are pointing to the fact that the militants fled to the Myanmar border after carrying out the attack. India has a 1600 km long border with Myanmar. This range is filled with many hilly and inaccessible areas. This makes it easy for militants to flee to Myanmar after attacking India.

Insurgents from Naga, Manipuri and Assam have been maintaining their base in the Sagaing area of ​​Myanmar for the past several years. From this they attack in India and then run back. These camps have been the subject of dispute between India and Myanmar for a long time, but in January 2019, when the Myanmar army took action on the camp of the rebels, it was believed that there has been a change in its policies. The Myanmar army carried out a clean-up operation in the self-styled capital of Naga, Manipuri and Assam rebels, Taga. This improved relations between Myanmar and India.

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The signing of the Iran–China 25-year Cooperation Programme on 27 March 2021 in Tehran went, to a large degree, under-reported. The fact that the contents of the agreement are classified and the text of the leaked draft agreement from 2020 is very vague, helps significantly for the mass media to underestimate the magnitude of the geopolitical importance of this cooperation. However, a deeper analysis shows that with that step China managed to achieve two extremely important goals: firstly, secure its oil supply and secondly, do that at such price that expensive transport routes, such as the China-Pakistan Economic Corridor (CPEC), become cost-effective even in crisis situations, which eliminates China’s long troubling Achilles Heel – the Malacca Dilemma.

The Importance of Oil

Oil is the blood of war. Without sufficient resources no military campaign can be successful and no advances can be sustainable because oil is needed for practically every machinery used to take over and control the ground. Securing its supply is the most important task facing the leader preparing for large scale operations. In order to plan this, the time-frame of the campaign must be considered, as well as the expected consumption. If, at any point, the supply is halted, then everything stops – there is no use of tank divisions if they cannot get to the front and an aircraft carrier becomes a sitting duck if the supporting fleet of marine and air vessels are not around.

Over the last few years China has openly and repeatedly declared its intentions to implement a long-term strategy to change the world order in a way, which is incompatible with peace. The Chinese Communist Party’s (CCP) leadership has long viewed their ideological system, the socialism with Chinese characteristics, as genuinely conflicting with the systems of the rest of the world. This divide could not become anymore clearer when the leader of the country, General Secretary Xi Jinping announced in 2013 from the highest forum, in a speech in front of the CCP Central Committee, that China needed to prepare for a period of conflict between these two social systems, including in their military domains.

The procurement for such conflict cannot remain unresolved. China sources its oil from the open market in peacetime and it is transported with tankers. Normal cost is between $2 and $3 per barrel to have it shipped to Chinese ports. During severe crises, however, markets react to the implied insecurity and the price can increase dramatically, often reaching $10-14 levels. The problem is that such levels are not sustainable in the long run as they can impact their economy adversely.

The cost of oil transport is not the only problem for China in an eventual military conflict – the ability to actually reach their ports is a clear and present danger. Currently, all the routes for the energy imports for China pass through the Malacca Strait – a long and narrow stretch between Indonesia and Malaysia. China’s implied risk in this situation is that, in case of international disagreement, this strait could easily be closed, a crisis event known as the “Malacca Dilemma”. This scenario would put China’s economy and population in a serious situation without many options and they would be prone to influence. Bypassing would require rerouting through Java Sea or Timor Sea, which would increase delivery times prohibitively and most importantly – risks for tankers capture and cargo loss.

When China invested in CPEC and influence in Pakistan they took care of the Malacca problem theoretically. Practically, the cost of transporting oil via CPEC remained very high, largely due to the difficulties arising from the engineering complexity needed for the terrain conditions – the pipe has to pass the highest mountains in the world and withstand formidable climate all year round. Because of this, CPEC could be viewed as possible Plan B and unsustainable solution. Until somebody could step in and pay the bill.

Pushing Iran to the Wall

Understanding the situation of Iran is very important to show how it slid into the Chinese embrace. Since their inception, the goals of sanctions have been to change Iran’s behavior with the idea that a severely hit and under-performing economy would limit the funds for the pursuit of core strategic objectives, which include, among others, support for regional armed factions and the development of ballistic missiles carrying nuclear warheads. Unfortunately for the US, the sanctions did not bring the desired results and, in late 2018, the Trump Administration decided to apply “maximum pressure” via a revised and stricter JCPOA (Joint Comprehensive Plan of Action). The severely limited ability to sell oil and the isolation from the international financial system sent the Iranian economy into a downward spiral, to which Iran responded by decreasing its commitments to previous sanctions and conducting special operations in the Gulf and Iraq.

China’s behavior then became very interesting. Their oil purchases from Iran at that time were at a 4-year peak averaging nearly $2 bn per month for the 10 months before the stricter sanctions. Interestingly, a downward trend started immediately after that, excluding only the upcoming peak demand months of February and March. The trend was so strong that it brought the monthly purchases to below a quarter of what they used to be – $0.2 to 0.5 bn and it continued ever since. The data comes from the National Bureau of Statistics of China and Refinitiv.

The counter argument is that China compensated with unofficial purchases due to the US sanctions. It is true that such purchases were taking place and that the practice of the Iranian tankers to switch off their transponders to avoid detection has been a hot topic in news covering the oil industry. According to Refinitiv, quoted also by Reuters, such purchases were negligible (total amounts not exceeding $0.5 bn) until November 2020. After that the portion of unofficial purchases – either through proxies, such as Oman, Malaysia and UAE, or through the “ghost” fleet of Iranian tankers – started increasing dramatically, reaching nearly 3.5 million tonnes in February 2021.

It is clear that China chose its policy very carefully. By letting Iran suffer for 2 years through limiting their own purchases from them, they increased the instability in the already aching economy of the Islamic republic. It was the perfectly created moment to present an opportunity to finalize the deal for the partnership agreement between both sides. Such strategy involved no risk for the Chinese economy, as Iran’s crude represented just 9% from all oil imports during the peak in 2014, as per data by Statista, so after the intervention the share must have dropped below 3%.

In this dire situation, China offered to help by purchasing their oil at heavy discounts, to fund their infrastructure projects (in other words, to immensely increase economic and political pressure as this is what happened in Pakistan, Sri Lanka and with all their partners) and to help in the IT sphere. Considering the implementation of the social grading system and the mass surveillance in China, it is safe to assume that they offered Iran the way to exercise tighter control over its population as a way to counter Western influence. Even though specifics were not mentioned, such cooperation would be impossible without the use of hardware by Huawei and similar telecom/networking companies with proven links to the Peoples Liberation Army (PLA).

The Perfect Deal

Hedging in finance is the practice of reducing risks of adverse price movements of assets. It is somewhat similar to insurance – there are hundreds of ways of doing it, but the bottom line is that the interested party pays a premium to another party willing to take a specified risk. The situation with the China–Iran relationship is particularly interesting, because China has the incentive to secure CPEC both physically and financially, as well as to find a way to eliminate their biggest oil supply chain risk. Additional objectives include the extension of the multi-billion projects along the Belt and Road Initiative (BRI) and use that synergy to create dependency of an autocratic government, further helping them to tighten the grip over its population and give the PLA direct access to practically all networks in the country. In exchange for this, that government will give them a preferable price to their main export commodity.

In order to understand the magnitude of the discount, we need to consider the worst possible scenarios and calculate the profitability there. Even in scenarios using transportation cost equal to those in the highest recorded peaks, China would get the oil at their ports 8-12% cheaper than what it would cost in peacetime before signing the agreement. Additionally, a 20% discount, at the current cost structure for extraction for Iran, would require that Iran produces 35% more oil in order to end up with the same net income. Anything below that would essentially drain the budget in the mid to long term.

The outlook for the Iranian government is rather grim. The increased oil purchases were the sweetener of the deal and considering the share of the Iranian crude in the Chinese imports, they are far from vital. Which means that the leadership in Beijing has very little motivation to keep the purchases at these high levels. Instead, it needs to keep on having Tehran pressed against the wall and dependent on this lifeline. This also means that the sanctions implemented by the White House might have negative impact on Iran, but they definitely strengthen China’s position in the region. Additionally, those sanctions were done to avoid a situation where Iran becomes a military nuclear power, but if in the future China considers a scenario, where it is good for them to have WMDs located there, they could easily supply them. Against another level of dependency, of course.

The trade is nothing short of genius. China has made Iran pay for its own export in such way that it would be profitable to go through the most expensive route in the most adverse time for international trade (considering a military conflict, which closes the Malacca Strait). In the civilian world this is similar to a client receiving the monthly premium payments from the insurance company for his car insurance policy, rather than making them. It is an absurd situation, which gives all the benefits to one of the sides only.

The China-Iran partnership scenario is not a product of coincidental political and trade decisions over the years, but rather a part of a carefully crafted policy. The strategists of the West are so far failing miserably against those in Beijing and need to fundamentally reconsider their relationships as time is running out. Partnerships, such as the Quad, have to be the focus of the foreign policy of Washington and the European Union, because the CCP is acting on its plan and the risks, which seemed almost like a fiction a decade ago, are a present day reality hanging like the sword of Damocles over the democratic world.

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A Thai proposal to replace China’s relentless efforts to create Kra Canal project, which if implemented would give PLA Navy direct access to Bay of Bengal bypassing Malacca Strait, has been welcomed by India. India had expressed reservations over the proposed canal project as it could be threat to its security interests in the Bay of Bengal.

A canal across Thailand’s Isthmus of Kra would shorten its access to the Indian Ocean by 1,100 kms bypassing Malacca Straits. China has been apprehensive that its commercial tankers and Navy ships can be blocked by USA or regional countries in Malacca Straits. The Kra Canal would have been part of China’s “string of pearls” policy, including control over ports and potential naval bases in Cambodia and Sri Lanka.

Thailand has different plans to construct two deep seaports on both sides of the country’s southern coast, which would be linked via rail and highway – a 100 kilometre highway and rail passageway linking two seaports on either side of Thailand’s southern coast. This proposal replaces the Kra Canal plan.

Wiser about the canal’s inherent dangers, the Thai Transport Minister Saksayam Chidchob recently said he preferred building rail and highway links across the isthmus instead of a canal.

Kra Canal

The current Thai canal proposal, known as the 9A route, would involve two parallel channels—each 30 meters deep, 180 meters wide, and running 75 miles at sea level from Songkhla on the Gulf of Thailand to Krabi in the Andaman Sea.

Second Sea Route

A long-mooted canal across southern Thailand’s Kra Isthmus, the narrowest point of the Malay peninsula, which would open a second sea route from China to the Indian Ocean, could allow the Chinese navy to quickly move ships between its newly constructed bases in the South China Sea and the Indian Ocean without diverting more than 1000 kms south to round the tip of Malaysia.

The Thai canal could become a crucial strategic asset for China—and a potential noose around Thailand’s narrow southern neck. If Thailand allows China to invest up to $30 billion in digging the canal, it may find that the associated strings are attached forever.

Malacca Strait

The Malacca Strait has been a key corridor of global commerce for centuries, if not millennia. The Italian adventurer Marco Polo sailed through the strait in 1292 on his way home from the court of Kublai Khan. In the early 1400s, China’s Ming Dynasty admiral Zheng He passed through on his voyages to India, Africa, and the Middle East. Today, more than 80,000 ships a year transit the strait, which is a key corridor bringing oil to East Asia and manufactured goods back out. Modern Singapore’s prosperity has been built on its strategic location at the narrow southeastern end of the strait.

A quarter of globally traded goods use the Strait of Malacca. The current route through the Malacca Strait has almost reached its safe limit in terms of the shipping volume it can handle. Current alternatives to Malacca, like Indonesia’s Sunda Strait, would require east-west cargos to detour even further out of their way.

Chinese Submarines

Thailand is quietly but steadily pushing back against China by delaying plans to buy two Chinese submarines and expressing interest to replace Chinese proposal to build a canal in Bay of Bengal with its own project, a decision that could be welcomed in Delhi.

Thailand decided to delay, on 31 August, its $ 724 million purchase of two submarines from China, following public outrage over the controversial deal. Prime Minister Prayut Chan-o-cha – also defence minister – “requested the navy to consider a delay” in the purchase of the two additional submarines.

Under a 2015 deal, Thailand had finalised its purchase of three submarines in 2017, with the first one expected to be delivered in 2023.

India’s Concerns

At sea, China is attempting to encircle India with a series of alliances and naval bases evocatively known as the string of pearls. China’s greatest vulnerability in its strategy to dominate the Indian Ocean—and thereby India—is the Malacca Strait, a narrow sea lane separating Singapore and Sumatra, through which so much marine traffic must pass that it’s both a lifeline for China’s seaborne trade and the main path for its navy toward South Asia, and points further west. With regards to China’s rivalry with India—and its strategic ambitions in Africa, the Middle East, the Mediterranean, and beyond—anything that reduces the dependency on one narrow chokepoint between potentially hostile powers is vital.

A Thai Canal would fit neatly into Beijing’s plans to encircle India. The Chinese Navy is actively pushing west into the Bay of Bengal and the Indian Ocean, opening an East African logistics base in Djibouti and conducting joint exercises in the region with the navies of Myanmar, Bangladesh, Pakistan, Iran, and even Russia. The plethora of China-sponsored port infrastructure projects throughout the region only add to the impression of encirclement. India has responded by gearing up for potential future confrontations with China at sea.

India’s Counter Actions

India can effectively counter Chinese expansionism by upgrading its domestic forward bases and air and naval facilities in the Andaman and Nicobar Islands, specifically to counter China. An Indian union territory with a population of fewer than half a million, the strategic archipelago intersects the sea lanes leading from the Malacca Strait into the Indian Ocean. They also have the potential to quarantine the proposed Thai canal.

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The canal had gained widespread support among Thailand’s political elite. Chinese influence operations in Thailand probably helped shape public opinion.

The politically powerful Thai army argued that Thailand could divert some of that prosperity to itself, building industrial parks and logistics hubs at both ends of what could become one of Asia’s major transit arteries. But Thailand risks splitting itself in two with the proposed project. It has an active insurgency in its three southernmost provinces, which are majority Muslim in religion and majority Malay in ethnicity. The canal could become a symbolic border between “mainland” Thailand in the north and a separatist movement in the south. If Thailand were ever to break in two, the Thai canal could be the fault along which it cracks.

Colombia once had a northwestern isthmus called Panama. When Panamanian secessionists revolted in 1903, the U.S. Navy stepped in to ensure the new country’s independence. Panama has been a virtual U.S. protectorate ever since.

A successful Thai canal project would reconfigure the political geography of Southeast Asia. It would bring in China as a permanent security partner that could not easily be kicked out—just like Panama.

The real concern is that it would further undermine the independence of poor southeast Asian countries like Myanmar and Cambodia, which have comparatively weak civil societies that are highly vulnerable to Chinese interference.

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