Mazagon Dock Shipbuilders Limited (MDL), a public sector shipyard under India’s Ministry of Defence, is set to acquire a controlling 51% stake in Sri Lanka’s Colombo Dockyard PLC (CDPLC) for approximately $52.96 million (about ₹452 crore).

This acquisition, MDL’s first international venture, will be executed through a combination of primary capital infusion and secondary share purchase, notably including the acquisition of shares from the current majority shareholder, Japan’s Onomichi Dockyard Co. Ltd. Upon completion—expected within four to six months, pending statutory and regulatory approvals—CDPLC will become a subsidiary of MDL.

Strategic Significance

Colombo Dockyard is Sri Lanka’s largest and most established shipbuilding and repair facility, with over five decades of experience serving clients from Japan, Norway, France, the UAE, India, and several African countries. It offers an integrated portfolio of services, from in-house design and construction to advanced repair and marine steel fabrication.

The yard’s location in the Port of Colombo, adjacent to some of the world’s busiest shipping lanes, provides MDL a strategic foothold in the Indian Ocean Region—a critical maritime corridor for global trade and security.

The acquisition is positioned as a gateway for MDL’s transformation from a domestic shipbuilder to a regional and global maritime player, aligning with India’s broader Maritime Amrit Kaal Vision 2047 and ambitions to strengthen its regional maritime influence.

The deal comes amid heightened competition in the Indian Ocean, where China has significantly increased its presence through investments in Sri Lankan ports and infrastructure. India’s move is widely interpreted as an effort to counterbalance Chinese influence and secure its own strategic interests in the region.

The acquisition was prompted in part by Colombo Dockyard’s recent financial struggles and the withdrawal of Japanese investment, after which the Sri Lankan government sought Indian participation as a strategic investor.

The transaction is also part of a broader pattern of deepening India–Sri Lanka cooperation, which includes recent defence agreements and joint investments, as well as India’s role in supporting Sri Lanka during its economic crisis through financial aid and backing for IMF loans.

MDL’s control is expected to revive Colombo Dockyard by enabling technology transfer, access to Indian supply chains, and integration into Indian and allied maritime markets, potentially leading to a financial turnaround for the Sri Lankan facility.

The acquisition will unlock operational synergies, expand R&D capabilities, and broaden MDL’s market reach across South Asia.

Naval experts have described the move as a significant strategic leap for India, enhancing its global shipbuilding footprint and providing a critical outpost for ship repair and new builds at a key maritime chokepoint.

MDL’s acquisition of Colombo Dockyard marks a major strategic and commercial expansion for India’s defence shipbuilding sector, reinforces India’s influence in the Indian Ocean, and is set to reshape the regional shipbuilding and repair ecosystem.

Agencies