Also included in the protocol are satellite ground stations and satellite mission management, training facilities and exchange of scientists.

A defence ministry official said the idea of the base emerged from long-term 'strategic thinking' and a proposal did reach the Cabinet Committee on Security (CCS).

'We wanted a base in Mongolia to give us greater reach in the region. But with an air-to-air refueller and better aircraft (with us), the need is not imminent,' said the official on condition of anonymity.

Defence experts agree that the airbase would have given India a bigger strategic footprint.

'Having a military presence in the region will give India a much greater strategic profile. However, it (the plan for a base in Mongolia) seems to have been shelved as the move may be seen as provocative by China,' National Maritime Foundation director Commodore Uday C. Bhaskar, a well known strategic analyst, told IANS.

India and Mongolia share good relations, which have been deepened by the Buddhist link. India was the first non-Communist country to recognise Mongolia, which opened its embassy here in 1956. India's diplomatic mission there opened 15 years later in 1971.

While New Delhi has reportedly dropped plans to have an airbase in Mongolia, experts say that China continues with its strategy to encircle New Delhi with a series of ports in countries neighbouring India.

The Gwadar port developed in Pakistan with China's help has neared completion. Opening at the mouth of the Strait of Hormuz, it has provided China a strategic foothold in Asia and a crucial gateway to trade. The deep-water harbour in Gwadar could be used by China's expanding fleet of nuclear submarines.

China is also engaged in developing ports and building infrastructure in Nepal, Sri Lanka, Myanmar and Bangladesh.

Said Bhaskar: 'The Indian government is not clear how to deal with China. India should think of investing in a civil air base in Mongolia. It will be akin to the commercial port in Sri Lanka that China is investing in.'

(Ritu Sharma can be contacted at ritu.s@ians.in)