The biennial exercise -- Milan -- is taking place in the backdrop of imposition of state of emergency in Maldives and Sri Lanka, two of India's maritime neighbours, and China's growing assertiveness in the region.
Indian Navy officials said 28 warships including 17 from India and 11 from Australia, Bangladesh, Indonesia, Malaysia, Myanmar, Singapore, Sri Lanka and Thailand are participating in the exercise.
The aim of the 10th edition of the exercise is to expand regional cooperation and combat unlawful activities in critical sea lanes.
Maldives, which is reeling under political crisis, has declined India's offer to participate at the exercise citing the current situation in the island nation.
"Besides the warships, the prestigious international event will also see the participation of 39 delegates from 16 countries, making it the largest gathering since its inception in 1995," said a senior Navy official.
Navy sources said delegates from the countries would deliberate on the regional security situation and subject of discussion may include China's rising assertiveness in critical sea lanes.
On their arrival at Haddo Jetty, all foreign warships were received ceremonially in the true naval tradition by the Army and Navy bands, the officials said.
The Indian warships participating in the exercise include 11 ships of Andaman and Nicobar Command and six ships of the Eastern Fleet.
In November, India, the US, Australia and Japan gave shape to the long-pending quadrilateral coalition to develop a new strategy to keep the critical sea routes in the Indo-Pacific free of Chinese influence.
'Milan' was first held in 1995 with the participation of just five navies. The aim of the initiative was to have an effective forum to discuss common concerns in the Indian Ocean Region and forge deeper cooperation among friendly navies.
The exercise is being hosted by the Indian Navy under the aegis of the Andaman and Nicobar Command.
Junior Minister of Defence Subhash Bhamre, while replying to a question in Rajya Sabha yesterday had said, "Government is aware of China's stated objective of becoming a 'maritime power'."
"As part of this strategy, China is developing ports and other infrastructure facilities in the littoral countries in the Indian Ocean Region, including in the vicinity of India's maritime boundary," he said.
While state of emergency was declared in Maldives early last month, Sri Lankan government imposed a nationwide emergency today to contain communal violence in Kandy.