Correct your post.
There is exactly one Navy that is stronger than Indian Navy in IOR. That is the USN.
However contrary to the geopolitical situation of China, where the presence of USN would be considered mandatory as a threat, India has no such issues.
India has zero problems with US and no fundamental disagreements of the world view.
As such USN is considered a stabilizing force and a cooperative force.
India alone has the capability to blockade the Malacca straits not just by virtue of having a large Navy, but also by virtue of having an Island chain right at the mouth of the Malacca Straits. The Andaman and Nicobar Archipelago hosts the first (Indian)Tri Services Command almost exclusively for this purpose.
The objective of a Navy is to further Indian interests. It is not to play a game, play second or first fiddle or anything.
As long as Indian policy makers feel that the Navy serves the geopolitical needs of India, it shall be well funded and continually expanded, the moment that changes, the Navy would be reduced in size commensurate to its importance.
As far as being surrounded by land is concerned. You are quite wrong. India was surrounded by great powers who countered India. That was China and Pakistan. Who had the military wherewithal to present a constant challenge.
Today Pakistan is out that club. Pakistan today does not have the military that can pose a serious threat to India. Pakistan has simply not kept up. Consequently, other powers that deferred to Pakistan against India are no longer willing to do so.
An example is that how barely a month back India recieved its first shipment of goods from Afghanistan using Chabahar port in Iran. Pakistan was bypassed completely and India can now trade directly with Iran and Central Asia. Pakistan has been powerless to stop this.
Today Only one nation - China has the ability to stop Indian designs and lock in India.