This paper argues that during the last two decades, China and Pakistan have strengthened their maritime cooperation in the Indian Ocean to their mutual benefit. Based upon its geostrategic location and vast maritime experience, Pakistan has promoted China's growing interests in the Indian Ocean and received China’s economic, technological and military assistance in return. India has responded to these developments by expanding its naval power, adding a nuclear component and aligning with like-minded states. The paper concludes that a lack of institutional mechanisms, coordination and trust among the three can potentially expand their rivalry seawards, triggering a new naval arms race.