<p>Indian state-owned Mazagon Dock Shipbuilders Limited (MDL) has sealed a landmark agreement to acquire a controlling stake in Sri Lanka’s Colombo Dockyard PLC (CDPLC) for approximately USD 52.96 million, a move that experts see as a calculated effort to counter China’s growing strategic influence in the Indian Ocean. The acquisition marks MDL’s first foray into international waters, positioning India as a stronger maritime force in the region.</p> <h3>Sri Lanka’s Colombo Dockyard: A Critical Foothold in Key Maritime Corridor</h3> <p>With CDPLC located in the Port of Colombo—a vital node along major shipping lanes—MDL’s acquisition grants India a strategic foothold in the Indian Ocean Region. The company confirmed: “Located in the Port of Colombo, Colombo Dockyard PLC (CDPLC) gives MDL a strategic foothold in the Indian Ocean Region — a key maritime corridor.”</p> <p>Officials revealed to The Indian Express that the Sri Lankan government sought Indian investment after Japanese majority-owner Onomichi Dockyard exited CDPLC in November 2024. Neither Japan nor Sri Lanka could extend financial help, prompting Colombo to approach New Delhi. An official explained, “A default by CDPLC would be serious for the Sri Lankan government as… a default would also have brought great financial distress and uncertainty for the workers employed in Colombo Dockyard.”</p> <p>MDL’s financial strength and shipbuilding prowess made it the natural choice among several contenders, and the deal is expected to revive CDPLC’s operations while securing India’s strategic interests.</p> <h3><strong>Strengthening India While Countering China's Expansion</strong></h3> <p>China’s extensive presence in Sri Lanka has been a growing concern for India, particularly after China Merchants Port Holdings secured an 85% stake in Hambantota International Port Group (HIPG) with a 99-year lease signed in 2017. In July 2024, CDPLC and HIPG signed an agreement to set up a full-fledged workshop at Hambantota Port, raising alarms in New Delhi over Beijing’s expanding footprint, Indian Express's report stated.</p> <p>MDL’s move directly challenges this influence. According to the company’s statement, as cited by ANI: “With this, MDL begins its transformation from a domestic shipbuilder to a regional maritime player with global ambitions. Aligned with Maritime Amrit Kaal Vision 2047, this move strengthens India’s regional maritime influence and expands MDL’s global reach.”</p> <p>By securing control over Sri Lanka’s largest shipyard, India can redirect potential ship repair and new build contracts to CDPLC, keeping these projects within its strategic orbit rather than letting them fall under China’s sphere.</p> <h3><strong>How MDL Acquisition Helps Sri Lanka</strong></h3> <p>MDL and CDPLC are poised to benefit mutually from shared resources, technical know-how, and new contracts. According to Indian Express, officials highlighted: “This strength can be leveraged for mutual benefit and can result in a win-win scenario.”</p> <p>MDL plans to channel orders for ship repairs, refits, and construction through CDPLC, expanding both companies’ revenue streams and boosting Sri Lanka’s shipbuilding industry. With CDPLC struggling financially in recent years, MDL’s entry brings much-needed stability and an order pipeline that could rejuvenate operations. Notably, the firm saw a loss of Rs 70 crore in 2024.</p> <p>According to MDL’s regulatory filing, the acquisition will “strengthen its position in the ship repair and shipbuilding industry by unlocking operational synergies, enhancing research development capacities and expanding market reach,” while also supporting its long-term vision for growth.</p> <p>Subject to regulatory approvals and customary closing conditions, the acquisition is expected to be completed within four to six months, as reported by ANI.</p>
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