Indian Navy would be keeping a close watch on the movement of Chinese nuclear submarines, which are operating out of a recently discovered underground base in the South China Sea, Chief of Naval staff Admiral Sureesh Mehta said on Friday.

Admiral Mehta, however, felt that the Chinese nuclear submarine base has been known to India for some time and does not pose any significant threat.

"We had known about it for some time and moreover when it is a nuclear submarine, it does not matter if the base is 100 miles away or 200 miles," he added.

"Chinese are very keen to come in the Indian Ocean and there is no doubt that they wish to come there. They did not have the assets till now," the naval chief said.

Satellite images obtained by nuclear weapons watchdog Federation of American Scientists had led to the discovery of a Chinese naval base on the Hainan Island in south China Sea.

Reports carried in a section of media said that it is closest to India and that the discovery had set-off alarm bells in the region.

"Navies work according to national interests. A lot of Chinese oil is transported through the Indian Ocean. Indian maritime trade also takes place through the Indian Ocean for which we keep a watch and its (China's) interests are also the same," Admiral Mehta said.

The Chief of Naval Staff said India believes in the policy of co-operative engagement on the oceans rather being confrontational.

"The best thing is to engage each other more and more in the co-operative arena," he added.