NEW DELHI (Reuters) - India plans to strengthen its naval presence in the waters off its southern shores, the countrys navy chief said on Wednesday, in a move aimed at countering Chinas push into the Indian Ocean region. Admiral Nirmal Verma said the navy was working on a blueprint to protect its maritime interest in the Indian Ocean and inducting dozens of new ships and fighter aircraft to counter other naval powers. We have identified what are our maritime interests are in the region and we are looking to convert it into capabilities that we like to have to control our sea areas, Verma told a news conference, replying to questions on Chinas growing presence. India and China are locked in a battle of influence over the Indian Ocean region, with China creating a string of pearls or listening posts from Pakistan to Myanmar to encircle New Delhi. Investors are closely watching how China and India, the worlds most populous countries driving economic growth in the aftermath of the global financial crisis, use their growing clout. China has made strides developing strategic assets, such as the Gwadar port in Pakistan, the Sri Lankan port of Hambantota and assets in Yangon. Sri Lanka sits next to shipping lanes that feed 80 per cent of Chinas and 65 per cent of Indias oil needs. The bulk of the energy requirements as far as China is concerned flows through the IOR (Indian Ocean Region). It is a very substantial amount that is there, the Indian navy chief said, when asked about Chinese interest in the region. Verma said India was taking stock of the situation in the Indian Ocean and Chinas deployment of naval ships in the region from time to time. As far as we are concerned we have our own deployments and we assess them and hope to protect Indias maritime interest in the Indian Ocean region and beyond, Verma said. The Indian navy will go through a massive modernisation process and is set to replace its ageing fleet with 40 new ships in the next few years, including destroyers, fighters, aircraft carriers and submarines to secure the region, Verma said. India is one of the worlds biggest arms importers. The government plans to spend more than $30b over the next five years to upgrade its largely Soviet-era arsenal to counter potential threats from Pakistan and China. China, for its part, has reported nearly two decades of almost unbroken double-digit rises in declared defence budgets to 480.7 billion yuan ($70 billion) this year. Many analysts believe Chinas real level of military spending is significantly higher. The Peoples Liberation Army is being transformed into a modern force capable of fighting short, high-intensity conflicts against high-tech adversaries. Its navy is considering building an aircraft carrier.