2nd October: While the Indian government is disappointed that Sri Lanka failed to follow through on a deal with India and Japan to develop the East Container Terminal (ECT) at the Colombo port, it sees Lanka’s decision to enter into a $ 700 million deal with the Adani group to develop a second terminal at the same port as a “useful step.”
The agreement for the Western Container Terminal (WCT), which was announced just ahead of Indian Foreign Secretary Harsh Shringla’s visit to Sri Lanka, allows an Indian company presence at the strategically important port where China is funding several megaprojects, despite the fact that it does not involve the Indian government.
While the WCT deal has been portrayed in the international media as India’s response to expanding Chinese influence, official sources in India say the country still considers Sri Lanka’s unilateral withdrawal from the international ECT agreement to be very unfortunate.
Though the decision was attributed to trade union complaints, which reportedly did not want any foreign force involved in the project, it didn’t help that the Sri Lankan U-turn came at a time when it was viewed as going out of its way to assist Chinese investments even in the midst of the pandemic. While India is not opposed to China’s economic operations, it does want Sri Lanka to treat India-funded projects in areas such as ports and energy in the same way. The lack of that is of concern to India is exemplified by the Trincomalee oil farm project.
In engaging with China, India also wants Sri Lanka to keep India’s security interests in mind. According to a 1987 bilateral agreement, “no Sri Lankan port shall be made accessible for military use by any country in a way adverse to India’s interests.”