India last week expanded its strategic footprint in Sri Lanka with the Indian shipbuilding giant Mazagon Dock Shipbuilders Ltd. (MDL), which is managed by India’s Ministry of Defence (MOD), acquiring a controlling stake in Colombo Dockyard PLC (CDL).

MDL’s acquisition of the key strategic asset in the Colombo Port, the only dry dock on the island, came following CDL’s poor management performance, which saw longstanding investor/partner Onomichi Dockyard Company Ltd.’s exit last year.

Onomichi announced its decision to sell 51% shareholding in CDL and ended a management agreement after being in operation for over three decades in 2024, after CDL accumulated serious debt which remained unaddressed. 

Requests made on behalf of the Japanese company for State intervention to curb the impact of debt servicing had gone unanswered, it is learnt. 

Sri Lanka was ‘trying’ to find a ‘suitable’ partner to keep CDL from crashing since early 2025, a senior Government official told The Sunday Morning on terms of anonymity, adding that several powerful nations had expressed concern about who would take control of this strategic asset among Colombo’s critical maritime infrastructure.

“MDL is set to acquire a controlling stake in Colombo Dockyard PLC (CDPLC), Sri Lanka’s largest shipyard, in a deal worth up to $ 52.96 million. This marks MDL’s first international acquisition. Located in the Port of Colombo, CDPLC gives MDL a strategic foothold in the Indian Ocean Region – a key maritime corridor. 

“With this, MDL begins its transformation from a domestic shipbuilder to a regional maritime player with global ambitions. Aligned with the Maritime Amrit Kaal Vision 2047, this move strengthens India’s regional maritime influence and expands MDL’s global reach,” Mazagon Dock said in a social media post on X on Friday (27) afternoon.