NAYPYIDAW—In September 2007, India and China, Myanmar’s two principal neighbors, stood by valiantly as the ruling junta brutally suppressed protests over increased fuel prices, led by pro-democracy groups and Buddhist monks. At least 13 were killed and thousands arrested. The nascent democratic transition that began in March 2011 has now placed Myanmar at the center of Southeast Asia’s strategic landscape. Not surprisingly, India and China are stepping up their efforts to win deals—and influence—in the new capital, Naypyidaw, even as they face new competition from the Western world. But neither of the two Asian neighbors is particularly welcome here.

India and Myanmar have deep historical ties. Myanmar was a part of Britain’s Indian empire until 1937, and the two countries share a thousand mile land border, as well as a maritime boundary in the Bay of Bengal along India’s eastern coast. The land border includes four of India’s unstable and...

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