Despite defending China's presence in the Indian Ocean, Sri Lanka Thursday distanced itself from being identified as an ally, insisting that multi- million dollar funding for ports and other projects was purely a "commercial interest".

Addressing a gathering of naval delegations from 28 countries at the annual maritime conference in the southern city of Galle, Sri Lanka's Defence Secretary Gotabaya Rajapaksa supported China's increasing presence in the region, Xinhua reported.

Admitting that there was "wariness" by India and the US on China's increasing presence, he justified it on the trade and economic interests China has in the Indian Ocean.

"China has an industry intensive economy that requires oil imports amounting to more than 200 million tonnes every year. Most of these oil imports are sourced from the Middle East, and then transported through the Indian Ocean to China."

"It is obvious that the safety and stability of the Indian Ocean is critical for China's energy security, and its increasing interest and increasing naval presence in this region is quite understandable," Rajapaksa said.

Rajapaksa went on to commend China for its economic assistance to the south Asian region.

However, he insisted that lumping the $360 million China funded Hambantota port in the southern part of the country and the $500 million Colombo harbour expansion project was a fallacy.

"From Sri Lanka"s perspective, I wish to clarify that the Chinese investment in the Hambantota port is a purely economic one. Sri Lanka has always pursued a non-aligned foreign policy, and our only interest is in our economic development," he said.

Recalling the lost potential of the island during the three-decade war, Rajapaksa said that after it ended in 2009, Sri Lanka reached out to many countries including China for development assistance.

"We welcome assistance from anybody who is willing to give it without harsh conditions being attached. This should not be misunderstood as a form of alignment with any one country or another. In fact, there are many development projects going on in Sri Lanka that are funded by India, China, Japan, and many other countries."

The Chinese delegation also said their policy remained dedicated to peaceful engagement with countries in the Indian Ocean.