India is stepping up its maritime presence in Sri Lanka with a series of strategic investments and partnerships in a bid to strengthen its economic presence and counte China’s influence in the Indian Ocean region.

Mazagon Dock Shipbuilders Limited acquisition of a controlling stake in Colombo Dockyard PLC recently is a key move that has strengthened India’s stake in Sri Lankan port ecosystem. This move has been complemented by Dredging Corporation of India signing an MoU with the same dockyard for dry docking, repairs, and fleet upgrades—deepening operational integration.

The developments, when viewed against the backdrop of China’s entrenched presence in the region, particularly its 99-year lease over Hambantota Port, signal steps to get a strategic foothold in the region and also secure its supply chain in the uncertain times.

Analysts see this growing, multi-layered Indian presence—spanning cargo handling, fuel logistics, and now shipbuilding support—as a strategic counterbalance to China’s investments in Sri Lanka’s port infrastructure. Beyond geopolitics, it also reflects India’s push to secure critical maritime supply chains and expand its logistics capabilities across the Indian Ocean, they add.

Sanjeev Jain, Managing Partner, Amicus Growth Advisors, said, “Our growing footprint in Sri Lanka’s logistics sector marks a strategic shift vis-à-vis China. Also, seen with Adani’s container terminal operations and Indian Oil’s fuel terminal, we see a multi-layered Indian presence, from cargo handling to energy logistics and now shipbuilding support.” He added that India’s presence is not just about opportunity, but also about securing supply chains critical for trade and expanding ship repair and maintenance capabilities in the Indian Ocean region.

Ajay Srivastava, Founder, Global Trade Research Initiative, said, India’s growing logistics presence in Sri Lanka is welcome and signals rising Indian influence in a region where China once sought to dominate port infrastructure. But India’s bigger priority must be fixing its own ports. Roughly 40 per cent of India’s container cargo is still routed through foreign hubs such as Colombo, Singapore and Port Klang because Indian ports remain costlier and less capable, he said.

Vessel-related charges at some Indian ports are about 40 per cent higher than Colombo, and limited draft depth prevents many from handling large container ships. The result is higher logistics costs, longer transit times and continued dependence on foreign ports for Indian trade, he added.

India’s engagement in Sri Lanka’s maritime and energy sectors is not new. Indian Oil Corporation entered the island nation as early as 2003 through its subsidiary Lanka IOC, establishing a network of fuel stations and a major oil terminal at Trincomalee Harbour.

More recently, in 2025, Adani Ports and Special Economic Zone operationalised the Colombo West International Terminal, a $800 million project that has rapidly scaled up capacity and throughput, handling about one million TEUs within its first year.

Srivastava added that while overseas investments strengthen India’s regional footprint, “lasting maritime power will require globally competitive domestic transshipment hubs, lower port charges and modern deep-draft infrastructure at home.”

Published on April 13, 2026