India, July 5 -- On June 27, 2025, Mazagaon Dock Shipbuilders, an Indian public sector company under the ministry of defence, signed a tripartite agreement with which it would be acquiring a majority stake (51%) in Colombo Dockyard PLC (CDPLC). The $53-million deal gives India strategic control over the only dry dock in Sri Lanka, and entrenches its position in the strategic port. For more than a decade, India was concerned about China's docking of submarines and spy ships, and that country's expanding presence in Sri Lanka's critical infrastructure. Since 2014, India has pushed for connectivity in the region with its Neighbourhood First policy. In the case of Sri Lanka, the need for connectivity and presence in the port sector grew dire after the Hambantota Port was leased to China for 99 years in 2017. The crisis in Sri Lanka, offered an opportunity for India to expand its presence in the country that needed foreign direct investments and external assistance. India offered an assistance of $4.5 billion and is helping Sri Lanka with port and energy sector connectivity through grants and investments. This aid and push for connectivity, together with India's economic growth, has given confidence to Sri Lanka in seeking India's assistance and investments. As a result, when the major stakeholder of Colombo Dockyard - Onomichi Dockyard Company - was operating under loss, the CPDLC sought help from the government of Japan and Sri Lanka. In return, Colombo requested India to increase its investments in the country. This was expected to increase the inflow of foreign money, avert further borrowing and debts, and at the same time help domestic stakeholders (who held 49% of stake in CDPLC) stay afloat. Similarly, the push for connectivity helped India further its presence in the region and ensure that its security and interests are not compromised. For instance, in 2011, China began investing in the southern terminal of Colombo Port. In return, a build-operate-and-transfer agreement was signed, effectively leasing out the terminal to China for 35 years. Furthermore, China also invested in the Colombo Port City, a special economic zone, adjacent to the southern terminal, and secured a lease for 99 years. China's increasing presence in Colombo port, and the fact that over 45% of transhipped cargoes of India are handled at the same port, motivated Delhi to increase its presence. In 2018, India and Japan were involved in developing the east container terminal, which was later cancelled unilaterally by the Sri Lankan government. When India expressed its concerns, Sri Lanka sought a compromise by offering the west container terminal of Colombo Port to Adani ports. With a 51% stake, the firm now enjoys a lease of 35 years in the terminal. The acquisition of Colombo Dockyard, Sri Lanka's leading shipbuilder and repair hub, further entrenches Indian position in Sri Lanka's port sector and the Indian Ocean Region. India's commitment, interest to invest, and ability to deliver during Sri Lanka's economic crisis incentivised Colombo to shed its reservations and suspicion. On its part, China too will continue to woo Sri Lanka and other countries in the region by leveraging its economic might. India will have to continue tapping regional markets, bridge infrastructure gaps, and deliver on its promises by leveraging its economy and capital. That's the only way to secure its interests in the region....