Analysis | Did Japan and India just launch a counter to China’s Belt and Road?

It is hard to overstate the significance of the recent agreement between India and Japan to help Sri Lanka develop its Colombo Port.

Under the deal to develop the East Container Terminal, the Sri Lanka Ports Authority will retain 100 per cent ownership of the terminal, while Sri Lanka will hold a 51 per cent stake in the Terminal Operations Company with the India-Japan joint venture retaining the remaining 49 per cent.

Both the timing of the deal and its terms are conspicuous. After all, Sri Lanka is still smarting from its last experience of turning to a larger Asian neighbour for help in developing infrastructure – when, struggling to repay its debts to Beijing, it was forced to hand over control of its Hambantota port and 15,000 acres of land to China on a 99-year lease.

That episode, which gave rise to claims China was using its Belt and Road Initiative investments as a form of debt diplomacy, wasn’t just painful for Sri Lankans, who were forced to come to terms with a loss of sovereignty. It also gave a fright to India, which saw control of a strategically located territory just a few hundred miles from its shores be ceded into the hands of one of its greatest rivals.