As China is already heavily invested in Sudan, competition between the two may soon force the Sudanese government to make some difficult choices.
India's growing interest in Sudanese oil will also complicate any United Nation moves to sanction Sudan over the genocide in Darfur.
Foreign Minister Ali Ahmed Karti and Indian Foreign Minister Natwar Singh met in Khartoum recently to discuss bilateral trade. The Sudan news agency reported that Karti thanked Singh for Indian investment in Sudan, particularly in Sudan's oil industry.
Indian investment in Sudan's oil industry is rising rapidly. It's first major investment came in 2003 when Oil & Natural Gas Corp. acquired a 25-percent stake in the Greater Nile Oil Project for $750 million.
In February, India's Oil and Natural Gas Corp ONGC Videsh received a $1.2 billion contract to build an oil refinery at Port Sudan. The following month, India's Videocon signed a memorandum of understanding with the Sudanese government to invest $100 million for a 76-percent stake in an oil field.
India's Oil Minister Mani Shankar Aiyar is planning to visit Sudan later this month.
The Sudanese discussions were Singh's last foreign policy initiative. On Tuesday Prime Minister Manmohan Singh fired the foreign minister amid charges he illegally profited from the U.N. oil-for-food program in Iraq. Given the importance of the deal, Singh's dismissal is unlikely to impact the agreement.