The South China Sea (SCS) is has become a hotbed of regional maritime disputes and tensions with global ramifications. SCS is one of the main lines of global economy and trade, with more than 5 trillion USD of trading through ships taking place through SCS every year. However, the regional giant China, has increasingly demonstrated its ‘strategic’ intentions in the SCS with its ownership claims, military build-up in Woody Island and articulation of ‘nine-dash’ lines that brings large part of SCS under China’s sovereignty. China’s claim over the strategically important islands in the region such as Paracel Islands, Spratly islands and Scarborough Shoal is, however, countered by other countries of the region, in particular Philippines that has moved to its dispute with China to the Hague Permanent Court of Arbitration (PCA) in 2013. The PCA’s panel ruling on July 12, 2016 rejecting China’s claim of ‘historic rights’ over the SCS is of immense consequence to the maritime disputes in the region as well as to other countries like India, notwithstanding China’s rejection of the ruling.
Though India has been careful enough not to get involved in the regional disputes, the region is of utmost importance to India. India’s traditional links, coupled with ‘Look East’ and ‘Act East’ policy perspectives, is buttressed by commercial interests in the region. This is also now closely aligned with strategic-commercial considerations including the sale of naval petrol vessels and BrahMos missiles. China by stretching its military arms over the islands in the region and placing missiles in Woody Islands demonstrated to the outside world that it is in control of the sea lines in SCS raising the security concerns in India with regard to its trade through sea routes with South East Asian countries despite the freedom of navigation granted by United Nations Convention on the Law of Sea (UNCLOS). China’s control of SCS brings China’s hold closer to the straits of Malacca that facilitates nearly 55 per cent of India’s sea bound trade. Besides, China’s postures and its opposition to the operation of Indian companies actively involved in oil exploration activities resulting from its agreements with countries of the region like Vietnam and Philippines were always a matter of concern to India.
Hence, the PCA ruling is of considerable significance and appears to have positive effect on India. India’s linkages with the countries of South East Asia now could be smooth with China’s claim over SCS not being recognised and China’s protests on India’s presence in SCS having no sanctity. India, for instance, has partnership agreement with Petro-Vietnam through its energy arm, ONGC Videsh Ltd. that provides for joint exploration opportunities in blocks such as 128 in the Phu Kahn basin. Protection of India’s asset was deemed necessary by the Indian navy. But the Indian navy presence without prior permission of China was resented by China. Now Indian naval warships for protection of India’s commercial interests and assets as well as for joint naval exercises or for other naval requirements such as friendly port calls can enter the SCS water without notifying China. The high position that India has taken over the ‘freedom of navigation’ is vindicated by PCA ruling and it is a reassurance to India’s friends in South East Asia and is important from the point of trade with them.
The rejection of PCA ruling is in contrast to India’s position that gracefully accepted PCA ruling in 2014 in favour of Bangladesh when its maritime dispute with Bangladesh was arbitrated by PCA, a stance that US suggested as a lesson to China in handling maritime disputes with neighbours and something that is unlikely to be ignored by countries of South East Asia.
Nonetheless, the ruling is unlikely to alter the position of China with regard to SCS. In fact, to demonstrate that ruling has no impact on it China could adopt more aggressive postures. It would be in India’s interest to pursue balanced cooperation in the region and to avoid any confrontationist approaches in SCS that could further harden China’s position. Hence, India’s recent position that the disputes in SCS needs to be resolved directly by the parties concerned without external interference is a welcome step and, India needs to support the initiatives by any country or organisation in the region that aims to solve the problem through dialogues.