Rebels in northeast were offered the purchase of surface to air missiles (SAMs) by agents - Indian intelligence believe - who had been working on behalf of the Chinese intelligence agencies.
According to sources, the negotiations for the deal took place in Chengdu, the capital city of Sichuan province of China, in December 2009.
The agents had reportedly asked for $1 million for the missiles that included a package to train the rebels in the technical know-how for using them.
According to intelligence sources, Thabal, a top functionary of the United National Liberation Front of Manipur, had gone to Chengdu to procure arms and ammunition for his outfit and few other groups. During the negotiations an offer to sell the SAMs was put on the table. However, the deal fell through as the rebel groups could not arrange for the money.
This is the first time that intelligence agencies have got a confirmed report about a concrete offer from Chinese arms agents.
The intelligence agencies got evidence of Chinese involvement in the northeast after the arrest of Anthony Shimray, considered to be chief arms procurer for the National Socialist Council of Nagaland (Isaac-Muivah).
He was arrested in October this year after a coordinated intelligence operation. Currently, the National Investigation Agency (NIA) is investigating the Shimray case.
Shimray, 50, had flown into Kathmandu in September this year. After reaching Kathmandu, he had crossed over to India through Nepal-Bihar border. Indian intelligence operatives, who had been trailing him, arrested him in Patna.
During his interrogation, NIA sleuths came across evidence that Shimray had deposited around $ 1.2 million in a Bangkok bank as advance payment for grenades, assault rifles and rocket launchers, which he was buying from a Chinese company fronting for their intelligence agencies.
It was also found that he had been in regular touch with Chinese intelligence operatives.