I think, the growing military relationship between America & India sent powerful signals across the border. The chinese are really worried lot now a days. I think by participating in such exercise, they want to assert that they are India's enemy.
I would say, whenever China claims its right on Arunchal Pradesh, we better bring America to Bay of Bengal to conduct Military Exercise. No wonder China given Visa to Officer from Arunachal Pradesh recently. I hope people at prime office take note at this.