Indian Foreign Minister S.M. Krishna told parliament Tuesday that the Indian government had reached the conclusion that the Chinese have "been showing more than the normal interest" in Indian Ocean countries, such as Sri Lanka and Burma.
He said India is "closely monitoring the Chinese intentions" and developments in the region.
Krishna's comments came two days after two Chinese warships docked in Rangoon on Sunday, the Chinese navy's first visit to Burma in 60 years.
In addition, New Delhi has protested China's refusal to grant a visa to a top Indian general to visit China for high-level talks. China rejected the visa request because he controls part of the disputed territory of Kashmir, which is partly claimed by China.
India is also worried that China is attempting to extend its influence to Sri Lanka, a country that India has considered to be a close ally.
Trade between India and China has grown 30-fold since 2000. But tensions between the emerging Asian and global powers have increased as well.
While the Indian economy has grown rapidly, China has invested at the Gwadar port in Pakistan, the Sri Lankan port of Hambantota and in mining and energy businesses in Burma. It is part of a strategy to protect China's shipping lanes that feeds 80 percent of China's oil needs and 65 percent of India's.
China buys teak and gems from Burma and has shielded its military government from United Nations sanctions over rights abuses.
Some information for this report was provided by Reuters, AFP, Hindustan Times and Indian Express Online