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India Signs US $700 million Port deal




Adani Group to build Colombo terminal in US $700 million agreement.


India has countered China in Srilanka with a US $700 million deal, which is quite a positive news from the country of China as India has tried a lot get this deal and China wanted to block this deal as Srilankan Ports strategically holds significant geographical importance in the India Ocean. Finally, India has signed this deal with Srilanka and India has countered China in Colombo. 

As Srilankan economy is passing through a lean phase, Srilanka is now even finding it hard to pay for food imports they are facing severe crisis and the Government of Srilanka also had announce food emergency in the country, and main reason behind all this are the debts they have took and now they are finding it hard to pay even the interests. This economic crisis of Srilanka is posing a challenge for India. To overcome the economic crisis Srilanka is giving away its land to China for money and they are using that money to repay the interest of the loans which they have taken from China. 


The Western container terminal proposal came after Sri Lanka decided to retract the previous memorandum of understanding signed in 2019 with India and Japan on the Eastern Container Terminal (ECT).

The state-owned  Sri Lanka Ports Authority (SLPA) signed a memorandum of cooperation in May 2019 with India and Japan to develop the ECT during the previous Sirisena government.

The Colombo Port trade unions opposed the proposal of investors from India and Japan buying a 49% stake in the ETC. They demanded the ECT to remain 100% owned by the SLPA as opposed to the 51%.

Under pressure from trade unions, Prime Minister Mahinda Rajapaksa agreed to scrap the deal, prompting India to demand Sri Lanka to abide by its commitment to the trilateral deal with it and Japan.

Srilanka has two main ports which holds strategic significance in the Indian Ocean- Hambantota and Colombo port. China has acquired Hambantota port from Srilanka as a debt swap on a lease of 99 years and according to USA's intelligence agency China has secretly converted Hambantota port into a military base, after Hambantota China has also acquired Southern terminal of Colombo port for US $500 million and they also wanted to acquire Western terminal to ensure their complete dominance in the region, but India has offered a bigger amount of US $700 million for western terminal of Colombo port which was quite tempting for Srilanka who is facing a economic crisis.

It could have been a burden on government to pay such big amount so government has asked Adani group to talk to the authorities of Srilanka.


Adani has taken on port sector in Srilanks. Billionaire Gautam Adani led group entered into a deal with Srilanka's state-run Srilanka port authority (SLPA) to develop and run the strategic Colombo Port's Western Container terminal.       

On September 30, 2021, the Gujarat-headquartered Adani group signed a Build Operate and Transfer (BOT) agreement with Sri Lanka’s largest listed company John Keells Holdings and the Sri Lanka Ports Authority (SLPA) to jointly develop the Colombo West International Container Terminal (CWICT) at the strategically advantaged Colombo Port, located amidst one of the busiest shipping routes in the world.

As per the 35 year-long BOT agreement inked by the three parties, the Adani Group will have majority, 51%, stakes, while John Keells would hold 34%, and the SLPA, 15%. The more than $700-million investment is said to be the largest foreign investment in the island nation’s port sector.

This deal with benefit both Adani Group as well as country as a whole. As it is one of the busiest port and it has potential to generate good revenue for the company so, it is a good step by Adani Group who aspires to be world leader in port business. 

With this deal, India ensured that china cannot have complete dominance in the region and India can also keep a eye on Hambantota port and southern container terminal of colombo port which China operates which according to intelligence agencies they use it for military purpose secretly. 


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