Colombo port deal calms India’s paranoia 

Colombo Port needs China and India to emerge as trans-shipment hub in the Indian Ocean

The Sri Lankan government has announced that it is going ahead with a project to develop jointly with India and Japan a new container terminal from the scratch at Colombo Port called the West Container Terminal. 

According to the official notification of the Sri Lankan cabinet decision on March1 in this regard, the project will be “on Build, Operate and Transfer basis for a period of 35 years as a public-private partnership with Adani Ports and Special Economic Zone Limited [APSEZ Consortium] and its local representative John Keels Holding PLC [APSEZ Consortium], and the Sri Lanka Ports Authority.” 

The Sri Lankan Cabinet has appointed a Negotiation Committee and a Project Committee to evaluate the proposal in this regard. According to the Cabinet notification in Colombo, the proposal has been forwarded to the Indian and Japanese diplomatic missions in Colombo “requesting them to nominate investors.” This appears to be a mere formality. 

For, the announcement in Colombo says that the proposal, which has been prepared by the Adani consortium, “has been approved by the Indian High Commission,” while Tokyo is yet to name an investor. 

From all reports, this appears to be a much bigger project than the $700 million East Container Terminal expansion project that Delhi and Tokyo had canvassed for earlier. Importantly, the Indian and Japanese investors will be allowed 85 percent stake. This will be, interestingly, exactly on par with the holding of the Chinese company that is building the mega Colombo International Container Terminal. 

The development at once puts India’s ‘Colombo watchers’ in a quandary. They will have to go back to the abacus and do their additions and subtractions all over again. Evidently, neither has China acted as a ‘spoiler’ to ward off Indian presence in Sri Lanka nor is Sri Lanka a vassal state of the Chinese Communist Party. Put differently, the geopolitics of Sri Lanka needs fresh thinking by Indian strategists. 

For a start, the Sri Lankan government wants India to be a stakeholder in their country’s growth and development. Having said that, it is also a smart decision on their part to involve a hugely influential Indian company with enormous clout with the ruling elites in Delhi to develop a vested interest in the  stability and predictability of Indian policies toward Sri Lanka in the medium and long term. 

Considering that the Adani Group is also constructing a project in the southern tip of India for the development of a greenfield port at Vizhinjam (Thiruvananthapuram) — the International Deepwater Multipurpose Seaport — Colombo is also ensuring that there won’t be any conflict of business interests in container and other cargo shipping.  

No doubt, this new development devolving upon the Sri Lankan offer of a big port deal for Indian investment at a site literally next door to the massive Colombo Port City project being executed by China Merchants Port Holdings Company Limited (with an estimated $15 billion outlay) underscores that countries such as Sri Lanka (or Nepal) have a mind of their own and will always exercise strategic autonomy to preserve their core interests and concerns and safeguard their sovereignty. 

On the other hand, a stable relationship can be developed with a country such as Sri Lanka only on the basis of mutual interest and mutual respect. Simply put, India should scrupulously avoid the manipulative policies such as interference in the internal affairs of the neighbouring countries, leave alone conspire to bring about ‘regime change’. 

In fact, imagine Colombo’s comfort level today if only India had taken a forthright position extending rock solid support to Sri Lanka (as China did)  in pushing back at the recent US-backed move in the UNHRC to blackmail the leadership in Colombo over alleged war crimes. 

Equally, it emerges that while India’s joint ventures with the US in Sri Lankan politics have failed to produce durable results, and pushing the Indo-Pacific concept in South Asia can only trigger resistance, India’s core interests can be safeguarded by Delhi on its own steam. In retrospect, the visit by NSA Ajit Doval to Colombo (November 27-28, 2021) and his talks with the Sri Lankan leadership has proved to be a turning point. 

Colombo watches Indian developments closely and would have sensed by now the calibrated distancing Delhi is putting vis-a-vis the Quad and the Indo-Pacific concept in the most recent period in the post-Trump era, whose ripple effects are already being felt to an extent in the climate of the Sino-Indian relationship. 

Clearly, Delhi needs to reset its ‘red lines’. The bottom line is that India has vital security interests in its immediate neighbourhood and would expect Colombo to be sensitive toward such concerns. Now, having said that, there is no conceivable reason to feel paranoid about it either. Colombo is a brilliant practitioner of diplomacy — perhaps, the best among all South Asian countries — and will never surrender its strategic autonomy. Delhi should place trust in Colombo’s goodwill and consistency as a close friendly neighbour. 

On the other hand, China too has legitimate interests in developing friendly relations and partnership with Sri Lanka. Commensurate with its rise as a global power, China will pursue its interests and it is unrealistic on India’s part to define their parameters. Thus, the clumsy, knee jerk reaction to a Chinese contractor executing a $12 million hybrid wind and solar energy project off Jaffna was entirely avoidable. It didn’t exactly present the image of a self-assured nation. And, come to think of it, this wasn’t even a Chinese project, strictly speaking —  but funded by ADB where the Quad countries hold over 43% shares as against a paltry 6% by China. 

Arguably, the time has come for Delhi to take Beijing at its word and wet its toes by testing the efficacy of the tantalising idea of ‘China-India Plus’. China is known to be innovative in its business partnerships abroad.