Global Geo-political Series: Setback for India as Sri Lanka leases Hambantota port to China

India, which has been looking to curtail China’s maritime adventure in the Indian Ocean suffered a setback as its Indian Ocean neighbor Sri Lanka completed the formal handover of the strategic port of Hambantota to China, which will take control of the facility on a 99-year lease. The special event took place a few days back and was attended by Sri Lankan Prime Minister Ranil Wickremasinghe. Hambantota International Port Group (HIPG) and Hambantota International Port Services (HIPS), two new companies set up by the China Merchants Port Holdings Company and the Sri Lanka Ports Authority, will own the port for the next 99 years even if the lease is not extended. China Merchants Port Holdings Company agreed to pay $1.12 billion for an 85 percent share in Hambantota port on a 99-year lease.

China’s influential navy, which consists of 51 frigates, 35 destroyers, 35 Corvettes, 68 Submarines, 220 patrol craft, and 31 mine warfare vessels has been struggling to extend its influence in the Indian Ocean region as it lacked a port to resupply vehicles. Hambantota, which sits on Sri Lanka’s southern coast, provides access to critical Indian Ocean sea lanes. The acquisition of the port by China has spurred particular alarm in India, which is concerned about Beijing’s growing strategic and economic footprint in the Indian Ocean region. Sri Lanka has assured India that China’s acquisition of Hambantota port is purely for civilian purposes. Despite Sri Lankan assurances, Indian observers express concerns that Beijing could operationalize Hambantota as a resupply node for the People’s Liberation Navy in the future.

To promote its ‘one belt, one road’ initiative, China is very eager to expand its foothold in the Indian Ocean. It has struggled to do it so far, due to India’s opposition to the project as the latter enjoys a strategic position in the Indian Ocean.