India upset with Lanka for pulling out of Colombo port deal

Under pressure from its trade unions, President Gotabya Rajapaksa decided to call off the deal and offered development of West terminal as a “compensation“

Sri Lanka’s decision to unilaterally pull out of a deal with India and Japan to manage East terminal of Colombo port has not gone down well with New Delhi, which asked Colombo to “honour its agreement”.

Sri Lanka’s cabinet meeting on Tuesday (February 2) declared that the east terminal of Colombo port will owned and operated by the state-owned Sri Lanka Port Authority (SLPA).

“The commitment of the government of Sri Lanka … has been conveyed several times in the recent past, including at the leadership level. Sri Lanka’s cabinet also took a decision three months ago to implement the project with foreign investors. All sides should continue to abide by the existing understandings and commitment,” an Indian embassy official in Colombo told Reuters in an emailed statement on Tuesday.

Sri Lanka is critical for both India and China with the later increasingly making its presence felt in the country, which is important for cargo moving in and out of India