The Bay of Bengal is centrally located in the region from the Middle East to the Philippine Sea. Even from aviations strategic aerial position it lies at the centre. It lies at dead center of two huge economic blocks, the SAARC and ASEAN. China's southern landlocked region in the north, and major sea ports of Bangladesh and India. Both rising economically, though with chaotic democracies. Bangladesh, China and India has forged naval cooperation agreements with Malaysia, Thailand and Indonesia to increase its cooperation in checking terrorism in the high seas.
The Bay of Bengal is strategically crucial for India since it is a natural extension of its sphere of influence. Secondly because of the presence of outlying islands, namely Andaman islands and Nicobar islands and most importantly several major ports such as Kolkata, Chennai, Vizag, and Tuticorin along its coast with the Bay of Bengal.
China has recently made some efforts to project influence into the region through tie-ups with Myanmar and Bangladesh. The United States held several major exercises with Bangladesh, India, Malaysia, Singapore and Thailand. The largest ever wargame in Bay of Bengal, known as Malabar 2007, was held in 2007 and naval warships from US, Singapore, Japan and Australia took part in it. India, was also a participant. Large deposits of natural gas also incited a serious up for grabs urgency by India. Disputes over rights of some oil and gas blocks have caused brief diplomatic spats between Myanmar and India with Bangladesh.
The disputed maritime boundary between Bangladesh and Myanmar has twice resulted in military tensions, in 2008 and 2009. Bangladesh is currently pursuing a settlement with Myanmar and India to the boundary dispute through the International Tribunal on the Law of the Sea.