Port deal before foreign secretary Harsh Shringla's Sri Lanka visit key to balance China

Finalising the deal for Colombo port expansion with Sri Lanka ahead of foreign secretary Harsh Shringla's forthcoming Colombo visit will help India to balance China's presence in the region.

Sri Lanka Ports Authority (SLPA) had this week signed an agreement with India's Adani Group to build a new terminal next to a Chinese-run jetty at the Colombo port. "The agreement worth more than $700 million is the largest foreign investment ever in the port sector of Sri Lanka," SLPA said in a statement this week.

One of the key objectives of Shringla's visit to Colombo is to push India-backed projects, persons familiar with the matter told ET. New Delhi has been concerned over the slow pace of implementation of projects backed by it in the island nation, they said.


In February, plans to allow India into the strategic Colombo port were delayed when local trade unions opposed the plan.

Later, the Mahindra Rajapaksa-led government urged India to build a new terminal adjoining the Chinese-operated Colombo International Container Terminal (CICT).

Adani has set up a joint venture with Lankan group John Keells and SLPA as a minority partner. The first phase of the project is expected to be completed within two years.

In 2017, after failing to repay a Chinese loan, Sri Lanka allowed China Merchants Port Holdings to take over the Hambantota port in the southern part of the country. The deal gave the Chinese company a 99-year lease but raised fears of a debt trap.

It is no secret that a Chinese foothold at Hambantota backed by Gwadar port in Pakistan and Djibouti on the Horn of Africa could bolster Beijing's presence in the Indian Ocean.