India has no need to worry about Chinese military expansion under the Maldives' new policy that allows foreigners to buy its land, observers have said, after the islands vowed to keep the Indian Ocean a demilitarized zone.

The Maldives ratified legislation on Thursday to allow foreigners with investment of more than $1 billion to own land within a specified site, on condition that at least 70 percent of the area they develop is reclaimed from the sea.

Maldives President Abdulla Yameen has dismissed concerns over possible foreign military expansion under the amendment, assuring India and other neighbors that his government would keep the Indian Ocean a demilitarized zone.

Still, the Indian Express newspaper said "alarm bells are ringing". It reported that Indian officials were "concerned" that the amendments will enable China to buy islands and build strategic assets there.

"New Delhi sees the latest development in the context of Maldives President Abdulla Yameen's declared foreign policy shift to the East since last year," the paper said.

The Maldivian embassy in Beijing did not comment on the report on Friday.

A senior Chinese military officer said in May, when China issued a military strategy white paper, that China did not own any military bases abroad and did not seek military expansion.

Earlier, in January, opposition parties in The Maldives alleged the government was planning to award parts of south central Laamu Atoll to China for a military base. The Chinese embassy dismissed the allegations at the time as "completely false".

"As the Maldivian government has insisted it won't militarize the region, there is no need to be so sensitive about the news and immediately target China," said Hu Shisheng, director of the Institute of South and Southeast Asian and Oceanian Studies at the China Institutes of Contemporary International Relations.

"In my view, aside from diversifying the economy, the new policy can also bind the interests of foreign investors with that of the Maldives, which faces great challenges brought by climate change."

"There is no need for the Maldives to militarize the region," he added.

Fu Xiaoqiang, an expert on South Asian studies at the institute, said Chinese investors and construction companies might benefit from the amendment, given China's advanced technology in land reclamation. China is also the largest source of visitors to the Maldives.

"But that is about business," Fu said. "There is nothing wrong with countries developing their economy in a legal way."

He said Indian media have long questioned China's presence in the Indian Ocean. "They have to get used to it, as it will become normal with more and more Chinese enterprises going abroad," Fu said.

Under the plan, only 10 percent of the 298 square kilometers of Maldivian territory would be given to investors to develop reclaimed land.

The amendment was passed with 70 assembly members in favor and 14 against. The Constitution previously prohibited foreign ownership of Maldivian territory, only allowing 99-year leases.

The move is expected to attract large-scale foreign investment and projects to diversify the economy, which currently relies heavily on tourism.