The deal, which follows several years of diplomatic negotiations, will provide India with a crucial military staging point in what is fast becoming a critically strategic region.
India, which has more than 7,500 kilometers (4,700 miles) of coastline and sits at the very center of the Indian Ocean, is dependent on free and open access to those same shipping lanes for trade.
Chinese consolidation
India's attempts to better secure its access to the region mirrors a similar strategy deployed by its neighbor and long-standing rival China.
Under Chinese President Xi Jinping, China's naval reach has grown considerably, expanding far beyond its immediate coastline into areas not previously considered within its sphere of influence.
The strait, which is only 29 kilometers (18 miles) wide at its narrowest point, connects the Mediterranean Sea via the Suez Canal, and the Red Sea to the Gulf of Aden and the Indian Ocean beyond.
The opening of the Djibouti base was followed several months later by the country's controversial acquisition of the Hambantota port in Sri Lanka, just 22.2 kilometers (13.8 miles) by some estimates from the primary Indian Ocean sea lane that links the Malacca Straits to the Suez Canal.
"That port then gives them not only a strategic access point into India's sphere of influence through which China can deploy its naval forces, but it also gives China an advantageous position to export its goods into India's economic sphere, so it's achieved a number of strategic aims in that regard," said Davis.
Stoking fears
Like Sri Lanka, the Maldives has long been considered within India as a close regional ally. But in recent years, the country, led by President Abdulla Yameen, has drawn closer to China, inviting investment under Beijing's expansive "One Belt, One Road" economic initiative.
Speaking to CNN, Gurpreet Khurana, the executive director of India's National Maritime Foundation, said the new Seychelles deal was part of an Indian effort to safeguard territorial integrity.
"India has a primary area in the northern Indian Ocean and the secondary is the Indo-Pacific region. We (India) have interests that we have to preserve. With the Chinese going into the Indian Ocean in a big way, our strategic interests are expanding as well, and this is the only way India will be able to preserve itself," said Kurana.
No details confirmed
The move has stirred resistance in the Seychelles, however, where earlier this month, a group of 50 residents held a demonstration to protest the accord, citing a lack of transparency and environmental concerns.
"We need to remain nonaligned, friendly to all -- enemy to none," Volcere was quoted as saying.
Speaking to CNN, Arun Prakash, a retired four-star admiral and former Indian naval chief, refuted claims that the Seychelles agreement draws the island nation into a wider geopolitical rift.
"(What India is building in the Seychelles) is a facility, not a military base. It has not been our policy to set up military bases on foreign soil ... We were a colony for centuries, and after we became free, we do not want to do the same to another country. Setting up military bases is another form of colonialism," said Prakash.
"In international relations, China's approach is called a realist approach. India is far more sensitive to the opinions to its neighbors. Ours is a softer one ... China has a lot of money to spend. If they want to build a base, they can do it overnight. We don't have the financial and technical means to do this like them," said Prakash.
Close ties between India and the Seychelles stretch back several decades, though have tightened in recent years under Prime Minister Modi.
During a previous visit to the Seychelles by Modi in May 2015, the Indian leader outlined a vision for the Indian Ocean region with "collaboration as its backbone."
Under the banner of SAGAR (Security and Growth for All in the Region), a Modi-led initiative that seeks to develop better cooperation among Indian Ocean nations, Indian naval ships have helped to patrol the waters around the Seychelles, and in 2016, India installed a coastal surveillance radar system in the archipelago to gather and analyze intelligence.