Syllabus: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
Two years after Sri Lanka cancelled a joint India-Japan MoU for the East Container Terminal (ECT) project in Colombo, the three countries are studying ways of restarting trilateral cooperation, envoys at a conference said in New Delhi on Thursday.
Sri Lanka-India-Japan MoU for the East Container Terminal
- The Sri Lanka-India-Japan MoU for the East Container Terminal (ECT) was signed on May 21, 2019, by the governments of Sri Lanka, India, and Japan.
- The MoU envisaged the development and operation of the ECT at the Colombo Port by a joint venture company in which India and Japan would hold a 49% stake each and Sri Lanka would hold the remaining 2%. The total cost of the project was estimated to be $500 million.
- The MoU was met with opposition from some trade unions in Sri Lanka, who argued that it would lead to job losses.
- The Sri Lankan government also came under pressure from China, which has been expanding its influence in the Indian Ocean region.
- In April 2021, the Sri Lankan government announced that it was cancelling the MoU with India and Japan.
- The government said that it had taken the decision in response to the concerns raised by the trade unions and China.
The cancellation of the MoU & Chinas game
- The cancellation of the MoU was a setback for India and Japan, who had seen it as a key part of their efforts to counter China’s influence in the Indian Ocean region.
- The two countries have since been trying to revive the project, but they have faced continued opposition from the Sri Lankan government and trade unions.
- In March 2023, the Sri Lankan government announced that it would allow India and Japan to develop a new container terminal at the Colombo Port.
- However, it is unclear whether this new project will be seen as a replacement for the ECT project or as an additional project.
- The cancellation of the Sri Lanka-India-Japan MoU for the ECT is a reminder of the challenges that India and Japan face in their efforts to counter China’s influence in the Indian Ocean region.
- The two countries need to find ways to overcome the concerns of the Sri Lankan government and trade unions, and they need to make sure that any new projects they undertake are seen as beneficial to Sri Lanka.