From the northeastern states of India, a total of 423 illegal weapons, including AK-47s, M-16s and Chinese pistols, have been recovered so far this year.

Intelligence agencies have also said that China is supplying arms and ammunition to insurgent groups on the Myanmar border as they pay good prices.

"Prominent insurgent groups, especially those from Assam, Manipur, Nagaland and Mizoram, maintain regular contact with Chinese intelligence agencies and have benefited from Chinese largesse and weapons," the agencies alerted the government.

The agencies have pointed out that training of insurgent groups in the northeast, provisioning of arms and ammunition and harbouring exiled militants and leaders have been recurrent facets of China's 'diplo-terrorism' against India.

Myanmar lies at a very strategically significant location. It provides an alternate land bridge to the trade routes of the Indian Ocean, easing the pressure on the Malacca Straits and is a trove of natural resources to fuel the growth of the landlocked Yunnan Province.

Moreover, Myanmar under Chinese sphere of influence helps stymie India's growth in the region.

Sources said that recently a large consignment of Chinese made weapons comprising AK 47 assault rifles, machine guns, anti-tank mines, grenades and ammunition of a total value of approximately $1 million was seized in Mae Sot district on the Thai side of the Myanmar-Thailand border.

This seized cache of arms is not the only consignment of Chinese weapons that has made its way into the region.

Earlier this year, a large cache of 500 assault rifles, 30 Universal Machine Guns, 70,000 ammunition rounds, a huge stock of grenades and significantly, a few F-6 Chinese Manpads, were offloaded at Monakhali beach near the coastal junction of Myanmar and Bangladesh. From there, the consignment reached the Arakan Army Camp in Sandak and then it was further smuggled into Rakhine using the Parva corridor in South Mizoram.

The seized weapons were original Chinese made and were meant to be smuggled to insurgent groups on the Myanmar border as they pay good prices.

In Myanmar, China is currently supplying arms and ammunition to the Arakan Army, which is active in Chin and Rakhine states of Myanmar bordering Mizoram.

China is now using the Arakan Army, an Arakanese armed group declared as a terrorist organisation by Myanmar, to limit India's inroads through the Kaladan Multi Modal Transport and Transit Project.

The Arakan Army was raised in 2009, under the Kachin Independence Organisation along the China border - the same year the Kaladan project was declared by India.

In 2019, when a phase of the Kaladan project was nearing its completion, the Arakan Army shifted its area of operation to Rakhine and Southern Chin.

More than 593 instances of clashes between the Arakan Army and Myanmar were reported in 2019, majority of which were in close proximity to the Kaladan Project.

The Arakan Army, however, has always kept its anti-Kaladan activities below a certain threshold to not raise the ante.

"Nevertheless, there have been more than four instances of targeting of shipments/attacks on Myanmar Army providing security and abductions (claimed to be mistaken identity) which overall has severely impeded the execution of the project," the agencies said.

Interestingly, the Arakan Army has also declared its decision to levy taxes on the Indian project, while in the same breath it has exempted all ongoing Chinese projects in the region.

Sources also said that China provides up to 95 per cent of Arakan Army's fundings.

Chinese weapons supplied through Bangladesh and Thailand clarifies that projects carried out by India in Myanmar are under threat.

"Presence of an Indian project in close vicinity of the landmark China Myanmar Economic Corridor starting in Kyaukpyu is an excellent reason for China to stall India's growth in the region," the source said.

The source also stated that the Myanmar Army has acknowledged the 'Hunting with the hounds and running with the foxes' strategy of China, even to the tune of Senior General Min Aung Hlaing bringing up the issue with visiting Chinese President Xi Jinping in January 2020. China had then categorically denied it.