International relations researcher – Dr. Hasith Kandaudahewa says there is a visible trend of China gradually distancing itself from Sri Lanka since 2023, a process that could accelerate with India’s Mazagon Dock Shipbuilders Ltd. acquiring a majority stake in Colombo Dockyard PLC (CDPLC).

Speaking to the BBC Sinhala Service, Dr. Kandaudahewa has noted that CDPLC’s reputation in global shipbuilding makes the acquisition strategically significant for India, especially when viewed alongside India’s newly opened Vizhinjam International Seaport in Kerala.

This shows that India is steadily strengthening its port infrastructure across the Indo-Pacific and increasing its strategic influence in the Indian Ocean, he has said.

Dr. Kandaudahewa has further pointed out that with China already holding Hambantota Port on a 99-year lease, India’s move to secure the majority stake in CDPLC signals a clear challenge to the Chinese presence in Sri Lanka.

“While China is holding the Hambantota Port on a 99-year lease, India is also trying to show its dominance in Sri Lanka. India is trying to pose a challenge to China by securing a majority stake in the CDPLC. Why, because these two countries are staking their claim to two of the most strategic locations in the same country. Similarly, we are seeing China gradually distancing from Sri Lanka from 2023. The CDPLC seems to be accelerating it even further.”

“In the long term, India is investing in renewable energy programs in Sri Lanka. Even though India may not gain much profit from this, it is trying to further retain Sri Lanka as their closest neighbor.”

Mazagon Dock deal confirmed

The Colombo Stock Exchange has already confirmed that Mazagon Dock Shipbuilders Ltd, a public sector undertaking (PSU) of the Government of India, will acquire a 51% stake in CDPLC currently held by Japan’s Onomichi Dockyard Co. Ltd for USD 52.96 million.

The deal is to be completed in the next 06 months.

Mazagon Dock Shipbuilders Limited, Mumbai, an ISO 9001: 2015 Company is one of the leading shipbuilding yard in India.

Since it was taken over by the Indian government in 1960, Mazagon Dock MDL has built a total 805 vessels including 30 warships, from advanced destroyers to missile boats and 8 submarines.

CDPLC’s major shareholders (2024):

• 51%: Onomichi Dockyard Co. Ltd. (Japan) (to be sold to Mazagon Dock)
• 16.34%: Employees’ Provident Fund (EPF)
• 5%: Sri Lanka Insurance Corporation – General Fund
• 4.92%: Sri Lanka Insurance Corporation – Life Fund
• 3.04%: Sri Lanka Ports Authority
• 2.42%: Employees’ Trust Fund Board
• 1.11%: Bank of Ceylon

(Source: BBC Sinhala)