In a statement, external affairs spokesperson Syed Akbaruddin said that India also wants to see resolution of the issue through peaceful means "in accordance with universally recognized principles of international law" and added that India maintains that freedom of navigation in the South China Sea "should not be impeded".
On Wednesday, tension in the South China Sea flared after Vietnamese naval ships and Chinese vessels collided.
About 80 Chinese vessels had moved into an area near the disputed Paracel Islands, where Vietnam has sought to prevent China from deploying a massive oil rig.
Vietnamese officials claimed that their ships had been rammed by the Chinese vessels.
Vietnam said the Chinese ships also fired water cannons at its flotilla in the encounter, injuring Vietnamese sailors. Chinese officials did not confirm the incident.
The confrontation was the most serious in recent years between the two neighbors.
The Philippines also arrested 11 Chinese fishermen for catching endangering turtles, angering Beijing.
The skirmishes highlighted the tensions in the region in the wake of China's aggressive stance in pursuing its maritime claims in the South China Sea.
At the weekend, Chinese state-owned energy firm CNOOC (China National Offshore Oil Corporation) began operating in the South China Sea waters which both countries claim as theirs.
Chinese oil-drilling rig, CNOOC 981, is scheduled to begin drilling work on May 10, according to Chinese media.
At the Chinese foreign ministry's daily briefing in Beijing, a spokesman said China was operating legally and well within the scope of its sovereignty.
"Vietnam's interference with the normal operations of Chinese enterprises seriously violated China's sovereignty and sovereign rights, and seriously violated international law and the fundamental principles of international relations," the Chinese spokesman said Wednesday.
On Tuesday, Vietnam told China it would take all necessary measures to defend its interests in the South China Sea if Beijing refused to remove the rig.