India’s state-run Mazagon Dock Shipbuilders Limited (MDL) is acquiring control of Sri Lanka’s Colombo Dockyard PLC in a USD 52.96 million deal—an aggressive move aimed at expanding India’s maritime footprint and blocking China’s growing influence in the Indian Ocean.

The takeover, MDL’s first international venture, includes a mix of primary capital infusion and share purchase from Japan’s Onomichi Dockyard Co Ltd, which had owned a 51% stake. With the Japanese firm pulling out and Sri Lanka’s dockyard in financial crisis, the Indian government stepped in, recognizing the strategic vacuum.

The Colombo Dockyard, Sri Lanka’s largest shipbuilding facility, sits adjacent to some of the busiest shipping lanes in the world. With its capabilities and location, the yard has long been seen as a prize in regional maritime competition. Officials said MDL’s control will not only revive the struggling dockyard but also reshape the shipbuilding and repair ecosystem in South Asia.

The move will allow MDL to divert parts of its repair and new-build order pipeline to the Sri Lankan facility, creating continuous revenue flow while unlocking industrial and design synergies between the two yards. “This step will position MDL as a key player in South Asia and lay the foundation for our emergence as a global shipyard,” MDL CMD Capt Jagmohan was quoted as saying in an Economic Times report.

Sri Lankan government reportedly had sought Japanese assistance to rescue the yard, but when that failed, India was asked to bring in a strategic investor. MDL emerged as the top contender given its technical strength and deep financial base.

Pending regulatory approvals, Colombo Dockyard PLC will become a full subsidiary of MDL—giving India not just a shipyard, but a frontline strategic outpost in a region where maritime control is increasingly contested.