The Rajapaksa government’s decision to overturn Sri Lanka’s tripartite agreement to develop Colombo’s East Container Terminal is a setback to India and Japan. The project, worth an estimated $500-$700 million, was a key marker for infrastructure investment in the island nation where Chinese projects are most prominent. More than two-thirds of trans-shipment at this port is tied to India, making it an important trade and connectivity link. Japan has been a keen supporter of Sri Lanka’s growth story, with its loans of about ¥1.1 trillion and grants and technical cooperation of about ¥300 billion. As a joint venture for India and Japan to invest in, the ECT project was also expected to showcase how the two Indo-Pacific partners, and also Quad members, could provide South Asia with viable, transparent and sustainable alternatives for financing and development. The sharp statements from New Delhi and Tokyo now reflect their deep disappointment and their suspicions about the motivations. The ostensible reason for the Rajapaksa government’s decision is growing pressure from port union groups which have opposed any foreign participation, and threatened a “work-to-rule” agitation if ECT operations were handed to the Adani group, as proposed. India has also had some misgivings about whether the Rajapaksa brothers, who became President and Prime Minister in 2019-2020, would in fact honour the commitments made by the previous government, given the acrimony between the two governments. Similar commitments made by former PM Ranil Wickremesinghe during a visit to Delhi when he signed an MoU for developing the Eastern city of Trincomalee through oil and infrastructure projects also appear to have fallen by the wayside. The larger question of a possible Chinese role in the ECT decision also hangs over the decision, given that other terminal projects at the Colombo Port such as the Colombo International Container Terminal, have not faced similar pushback. It is also curious that given its financial difficulties, Sri Lanka felt confident in taking a decision guaranteed to upset such important donors.

New Delhi has said it continues to engage Sri Lanka on the ECT issue, although it remains cold to Colombo’s alternative offer of developing the West Container Terminal. Over the past year, the Modi government has invested much time and resources to India-Sri Lanka ties, including a new credit line, currency swap agreement, and COVID-19 assistance and vaccines. NSA Ajit Doval and EAM S. Jaishankar have visited Colombo more than once, and Mr. Modi has hosted President Gotabaya and Prime Minister Mahinda. India has also set much store by its partnership with Japan, which could be a template for similar projects, as a counter to China’s BRI. There is much at stake for all three countries to derail the partnership. It is in all their interest, but primarily Colombo’s, to find a compromise formula to salvage a deal that has far-reaching consequences for the region.

You have reached your limit for free articles this month.

Already have an account ? Sign in

Start your 14 days free trial. Sign Up

Find mobile-friendly version of articles from the day's newspaper in one easy-to-read list.

Enjoy reading as many articles as you wish without any limitations.

A select list of articles that match your interests and tastes.

Move smoothly between articles as our pages load instantly.

A one-stop-shop for seeing the latest updates, and managing your preferences.

We brief you on the latest and most important developments, three times a day.

*Our Digital Subscription plans do not currently include the e-paper, crossword and print.

Dear reader,

We have been keeping you up-to-date with information on the developments in India and the world that have a bearing on our health and wellbeing, our lives and livelihoods, during these difficult times. To enable wide dissemination of news that is in public interest, we have increased the number of articles that can be read free, and extended free trial periods. However, we have a request for those who can afford to subscribe: please do. As we fight disinformation and misinformation, and keep apace with the happenings, we need to commit greater resources to news gathering operations. We promise to deliver quality journalism that stays away from vested interest and political propaganda.

Dear subscriber,

Thank you!

Your support for our journalism is invaluable. It’s a support for truth and fairness in journalism. It has helped us keep apace with events and happenings.

The Hindu has always stood for journalism that is in the public interest. At this difficult time, it becomes even more important that we have access to information that has a bearing on our health and well-being, our lives, and livelihoods. As a subscriber, you are not only a beneficiary of our work but also its enabler.

We also reiterate here the promise that our team of reporters, copy editors, fact-checkers, designers, and photographers will deliver quality journalism that stays away from vested interest and political propaganda.

Suresh Nambath

Please enter a valid email address.

From the abrogation of the special status of Jammu and Kashmir, to the landmark Ayodhya verdict, 2019 proved to be an eventful year.

Subscribe to The Hindu now and get unlimited access.

Already have an account? Sign In

Start your 14 days free trial Sign Up

You can support quality journalism by turning off ad blocker or purchase a subscription for unlimited access to The Hindu.

Sign up for a 30 day free trial.