Word count: 1890
Estimated reading time: 5 minutes
Author | Nanping
Editor of this issue | He Jiawei
Reviewer of this issue | Jiang Yi
Image source: WeChat official account "Nanyang Fengyunlu"
According to foreign media on June 28, 2025, the Indian state-owned Mazagon Dock Shipbuilders Limited announced on June 27 that it has acquired a 51% controlling stake in Colombo Dockyard PLC, Sri Lanka's largest shipyard, for 52.96 million U.S. dollars. This transaction is not only the first international business expansion for Mazagon Dock Shipbuilders Limited but also an important step in India's geopolitical game in the Indian Ocean region. Faced with China's continuous infiltration in Sri Lanka and the Indian Ocean, this move is widely interpreted as a strong response to China's strategic balance.
One, Overview of India's Control over Colombo Dockyard
Sri Lanka is located at the heart of the Indian Ocean, controlling one of the world's busiest sea routes. Its Colombo Port and Hambantota Port are strategic hubs connecting Europe, Asia, and Africa. Sri Lanka's geographical location makes it a key battlefield for the struggle for regional influence between China and India. In recent years, China has invested heavily in infrastructure projects in Sri Lanka under the "Belt and Road" initiative, especially the 99-year lease of Hambantota Port, which has raised India's high concern about its backyard security.
Colombo Dockyard, as Sri Lanka's largest shipbuilding and maintenance facility, is located within Colombo Port, capable of handling ships up to 125,000 tons, with four dry docks and more than half a century of shipbuilding and maintenance experience. Its clients span Asia, the Middle East, and Africa, covering commercial and government orders, including ship projects from countries such as Japan, Norway, France, and the UAE. The strategic value of Colombo Dockyard lies not only in its technical capabilities but also in its proximity to major global shipping routes. However, financial difficulties have recently led it into crisis, with a loss of 2.48 billion Sri Lankan rupees (approximately 70.7 million RMB) in 2024, forcing Onomichi Dockyard, Japan, to seek to exit its 51% holding.
The Sri Lankan government sought assistance from Japan without success, then turned to India, requesting it to introduce strategic investors. Mazagon Dock Shipbuilders Limited, with its expertise in building warships and submarines and a market value of 1.512 billion U.S. dollars, quickly became an ideal choice. The involvement of the Indian government not only filled this strategic gap but also provided Mazagon Dock Shipbuilders Limited with an opportunity to transition to a global shipbuilding enterprise.
Two, Motives for Controlling Sri Lanka's Largest Shipyard: What Does It Mean for China?
(1) Counteracting Chinese Influence
China has established a series of strategic footholds along the Indian Ocean through port investments, including Hambantota Port in Sri Lanka, Gwadar Port in Pakistan, and Kyaukphyu Port in Myanmar. It is widely speculated that these ports serve commercial purposes and provide potential supply and docking points for the Chinese Navy, enhancing its military projection capability in the Indian Ocean. The long-term lease of Hambantota Port particularly concerns India because the port is just hundreds of kilometers away from the southern tip of India, possibly threatening India's maritime dominance in South Asia.
The acquisition of Colombo Dockyard by Mazagon Dock Shipbuilders Limited is seen as a direct response to this strategy. By controlling Colombo Dockyard, India not only gains a shipbuilding and maintenance base close to key shipping lanes but also embeds its influence directly into Sri Lanka's maritime infrastructure. This helps India monitor China's activities in Colombo Port and, through technological cooperation and capital injection, strengthen Sri Lanka's economic dependence on India, thereby weakening China's influence.
(2) Industrial Synergy and Penetration into Hanbantota Port Controlled by China
From an economic perspective, the acquisition by Mazagon Dock Shipbuilders Limited is a strategic investment that benefits both India and Sri Lanka. Although Colombo Dockyard has been incurring losses in recent years, it has approximately 300 million U.S. dollars in order reserves and international certifications (such as DNV and Lloyd’s), indicating significant potential. The intervention of Mazagon Dock Shipbuilders Limited will help Colombo Dockyard regain profitability through capital injections and technical support. At the same time, Mazagon Dock Shipbuilders Limited can use Colombo Dockyard's facilities to handle some repair and new shipbuilding orders, optimizing its domestic production capacity and releasing industrial and design synergy effects.
In addition, Mazagon Dock Shipbuilders Limited will gain access to the engineering workshop being built in Hambantota Port by Colombo Dockyard. Although this port is controlled by China's China Merchants Group, the entry of Mazagon Dock Shipbuilders Limited means that India has secured a position in this strategically important node dominated by China. This "using commerce to control politics" strategy not only brings economic returns to Mazagon Dock Shipbuilders Limited but also provides India with a strategic foothold in Hambantota Port.
(Note: According to the Sri Lankan Daily News on July 18, 2024, Colombo Dockyard signed an agreement with Hambantota International Port Group, announcing the establishment of a full-function workshop at the Hambantota Port factory on July 16, 2024. Once the workshop is completed, it will greatly improve the quality and speed of ship repair services, enhancing the economic benefits for ship owners. After the new workshop starts operation, the service range of Colombo Dockyard will extend to the southernmost part of Sri Lanka. Hambantota Port is a deep-water port with numerous berths, capable of accommodating vessels with a draft of up to 17 meters, even ultra-large oil tankers.)
(3) Exporting Defense Equipment and Establishing a Forward Repair Base
Mazagon Dock Shipbuilders Limited is a core enterprise in India's naval modernization, specializing in the construction of warships, submarines, and patrol boats. The inclusion of Colombo Dockyard enhances India's defense export capabilities in the South Asian region, aligning with India's "Maritime Amrit Kaal Vision 2047" goal, which aims to enhance regional influence through defense exports. Colombo Dockyard's international customer network and shipbuilding experience provide India with opportunities to export defense equipment to Asian, Middle Eastern, and African markets.
Additionally, controlling Colombo Dockyard allows India to establish a forward repair base in the Indian Ocean region, supporting the deployment of Indian navy vessels. This is crucial for responding to the activities of other navies in the Indian Ocean, especially when other countries' submarines frequently appear in Sri Lankan waters.
This article is reprinted from the WeChat official account "Nanyang Fengyunlu," published on June 28, 2025, with the original title "India Again Makes a Move, Acquires a Stake in Sri Lanka's Largest Shipyard, What Does It Mean for China?"
Original: https://www.toutiao.com/article/7557037200530915880/
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