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NAVSTRAT-2030

importance for natural resources and energy transmission. The Indian Ocean remains a central hub
for global economic and strategic dynamics as countries strive to strike a balance between
geopolitical concerns and commercial goals.

The strong economic rise of Asian nations, especially China and India, has changed the current
geopolitical, geostrategic and economic environment in the IOR. The BRI of China and the Act
East Policy of India highlight their respective economies as investments and infrastructure projects
spread throughout the region. One important factor is the transmission of energy since the Indian
Ocean is used to carry a large amount of the world’s oil traffic. Crucial chokepoints for energy
supplies are the Straits of Hormuz and Bab-el-Mandeb which connects the Indian Ocean to the
Persian Gulf and the Strait of Malacca which connects the Indian Ocean to the South China Sea.
Sri Lanka’s strategic location has positioned it as a pivotal player in regional geopolitics. The
development of key infrastructure projects, including the Hambantota Port, Colombo Port City,
the expansion of the Port of Colombo and the proposed Trincomalee development plan has drawn
significant international attention. These projects highlight the increasing interest and engagement
of various global powers in the region, reflecting the broader dynamics of strategic influence in
the Indian Ocean. A more comprehensive engagement plan is indicated by the strategies of various
countries, including India; ‘Look East,’ ‘Act East’ and ‘Look Africa’. These policies, which
emphasize diplomatic relations, economic cooperation and security cooperation with regions
outside of the conventional Western-centric perspective are helping to shape the changing
dynamics in the IOR as nations turn their attention more and more towards the Indo-Pacific.

Regional Initiatives

In this regard the Indian Ocean Rim Association (IORA), the Regional Cooperation Agreement on
Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP) and the Colombo Security
Conclave (CSC) are regional maritime centric arrangements that are pivotal in Sri Lanka’s future
outreach and engagements. These constructs are not military alliances and are centered around a
common thread towards persisting and evolving economic, environmental, societal and maritime
security challenges and threats in the IOR. Sri Lanka already assumed chairmanship of IORA in
October 2023 for a period of two years ending in 2025, while it also executes secretariat
responsibilities of the CSC which is to be headquartered in Colombo. These are to be regarded as
vantage points where Sri Lanka could influence policy directions and gain credibility towards
future engagements. Further, the SLN is gearing to partner with the Combined Maritime Force
(CMF) based in Bahrain in its long-term ambitions of undertaking UN led missions.

Ports Developments and Potential
The island’s location connects its ports to the global supply chains and Port of Colombo is its
crown jewel. It is one of the busiest transshipment port in South Asia and handles 95% of the
island’s external trade. Thirty percent of global oil supplies and 50% of container ships traverse
through Sri Lankan waters. The Colombo port alone handles nearly 7 Mn Twenty-foot Equivalent
Units (TEUs) annually. Forty percent of cargo handled in Colombo port are India bound. Further,
the Colombo Port City development project is expected to attract vital Foreign Direct Investments
(FDI) to a city that is already contributing nearly 45% to the state’s Gross Domestic Product
(GDP).

Meanwhile, an extension of the West container terminal in the Port of Colombo is a possibility.
This on completion is expected to add 3Mn TEUs capacity to the port annually. The China
Merchants Port Holdings Company Ltd is also operating a separate terminal in Colombo port

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