With China's growing status, India's political elite is under pressure to assert regional power, particularly at sea. Some analysts believe Chinese and Indian interests need not be mutually exclusive.
Relations with China are currently at the very top of Delhi's foreign policy agenda.
Indian Foreign Minister Salman Kurshid on Tuesday described growing Chinese influence in the Indian Ocean as a development that "India will have to accept."
In unusually clear terms, Kurshid, who has only been in office for six weeks, called on the political elite in Delhi to find an answer to the complex challenge. "China is aggressive. China is a partner for us. China is a neighbor for us," said the minister.
The real creative challenge for Indian diplomacy, he said, would be how to utilize the strengths of the two countries in each other's best interests.
The message was addressed to, amongst others, the supreme commander of the Indian navy, Admiral Devendra Kumar Joshi. The admiral had previously declared that India was ready to act militarily to defend its interests in the South China Sea, even though India has no territorial claims there. At the same time, he described the modernization of the Chinese army as "very impressive" and called upon Indian politicians to act. "India must urgently consider its own strategy," he said.
Skewed balance of power
In reality, the two leading Asian powers have already been engaged in a military power contest for some time, even if it has been unevenly balanced.
This year, China has increased its defense budget by more than 11 percent to 106 million euros ($138 billion). In September, China put its first ever aircraft carrier into service and is set to invest in new warships and submarines until 2020. By comparison, India's defense budget is only about 40 billion euros.
But Christian Wagner, South Asia expert for the German Institute for International and Security Affairs (SWP), stressed in an interview with DW that India, for its part, has also been modernizing its army over many years.
"The Indian generals view the significantly stronger military build up of China with great concern because they know that India is not in the financial position to go to such lengths."
Joshi's remarks can therefore be judged, according to Wagner, as both a signal to the government that it must not lose sight of the importance of military modernization as well as a message to the navy itself, with India and China projecting their power, first and foremost, in the maritime sphere.
Oil in the South China Sea
While India has no territorial claims in the South China Sea, it is active there in the realm of oil production. In October 2011, the Vietnamese government conveyed the right to drill for oil in the disputed waters of the South China Sea to the Indian state oil firm ONGC Videsh.
China criticized the move and the dispute now threatens to escalate. Earlier this month, Chinese Foreign Ministry spokesman Hong Lei said: "China is against any unilateral form of gas and oil production in the South China Sea's disputed regions." Hong expressed the hope that the countries involved would respect China's sovereignty and national interests.
According to US estimates, the South China Sea holds reserves of up to 213 billion barrels of oil - an enormous amount, to be particularly coveted in times of dwindling global oil reserves.
Similar tensions over territory - which persist to this day - have arisen in the past between China and countries such as Malaysia, the Philippines, Brunei and Malaysia, as well as Vietnam.
"India has, until now, not allowed itself to be provoked," said retired Indian navy commodore Uday Bhaskar, one of India's leading experts on security and strategic affairs.
"India has always repeated that it is active in these waters for purely commercial motives," said Bhaskar, speaking to DW from Delhi. "India has never come down on one side or the other concerning the territorial claims of China or Vietnam."
However, it is exactly this kind of restraint that is questioned by experts in India, as well as the media, with the country's own self-image at stake. Does India still define itself as a regional power? Would the country, as a future superpower, be prepared to defend its interests even beyond the Indian Ocean?
'No zero sum game'
Bhaskar is skeptical about these calls for a more aggressive strategy, instead agreeing with the Indian foreign minister. "India and China should completely avoid any zero sum game," he said.
"India should not think that it loses influence in the region when China is a winner, and vice-versa," said Bhaskar, adding that it would make no sense for the two countries to adhere to such logic as Asia takes center stage on the world scene.
China has invested heavily in the Indian Ocean, from the building of a sea and air port in Hambanota, Sri Lanka, to a deep water harbor in Gwadar, Pakistan. However, the SWP's Wagner doubts whether such Chinese activity in the Indian Ocean can be classified as aggressive expansion. "It is not clear if Chinese investment in the Indian Ocean should be interpreted as actually having the security dimension of encircling India, as Indian security experts constantly warn."
Wagner believes the Chinese activities could also be seen as part of a trade policy aimed at diversifying access points that make it less expensive to move goods and energy resources between the west and southern China.
With that, China would no longer be dependent on the security situation in the Straits of Malacca - the world's busiest waterway - which links the Indian Ocean with the South China Sea.
Meanwhile, the heated discussions about India's policy with regard to China continue. And with China's geopolitical significance growing all the time, it seems unlikely that the answers will come at all easily.