INDIA

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China's efforts to develop alternative overland routes to transport oil and gas imports by extending the existing Karakoram Highway linking Pakistan and China and developing port facilities at Gwadar in Pakistan's Balochistan province, as well as through Bangladesh and Myanmar, have been viewed by India as part of a "string of pearls" strategy of economic and military encroachment into South and Central Asia.




Rapprochement with the United States

• improving relationship with US allies in East Asia, including Australia, Japan and Singapore.

US...assisting India's military modernization as evinced by the signing of the

• "New Framework for the US-India Defense Relationship" in 2005 and the

• "Next Steps in Strategic Partnership" in 2001 has

prompted US allies in Asia to step up military-to-military engagements with India.

• March 2006 Australian Prime Minister John Howard signed a memorandum on defense cooperation with India.

• In April, Australia and Japan along with the United States held a trilateral naval exercise off the Boso Peninsula in central Japan, and the

• "Malabar-07" US-India joint naval exercises in the Indian Ocean in September included the navies of Japan, Australia and Singapore as well.

Furthermore, despite India's change of approach in dealing with Myanmar, it is not apparent that India has made any significant gains. For instance, while Indian energy companies Oil & Natural Gas Company Videsh Ltd and Gas Authority of India Limited have a 30% stake in Myanmar's A1 and A3 blocks in the Shwe field in the Bay of Bengal, a proposed natural gas pipeline to India has been threatened by an agreement between Yangon and PetroChina to supply China with 6.5 trillion cubic feet (TcF) of natural gas via a pipeline from the A1 block to Kunming in China's Yunnan province.