Can Vizhinjam Dethrone Colombo? India’s New Deepwater Port

The commissioning of India’s first deepwater transhipment port in Vizhinjam, Kerala, marks a seismic shift in South Asia’s maritime landscape — one that could threaten the long-standing dominance of the Colombo Port as the region’s logistics and cargo transhipment hub.

Built under a public-private partnership (PPP) model at a cost of ₹8,900 crore (approximately USD 1.06 billion), the Vizhinjam International Deepwater Seaport is operated by the Adani Group, with the Kerala government holding a majority stake. It was officially inaugurated by Prime Minister Narendra Modi on Friday, and is now expected to transform India into a major global shipping and logistics player.

But for Sri Lanka, particularly Colombo Port, which currently handles the lion’s share of India-bound transhipment cargo, Vizhinjam’s rise presents a strategic and economic challenge.

A Game Changer Next Door

For decades, Colombo has enjoyed a privileged position, processing over 75% of India’s transhipment cargo, particularly containers bound for ports in southern India. But now, Vizhinjam — located just 135 nautical miles from Colombo — brings similar capabilities to India’s doorstep.

What makes Vizhinjam significant?

Deep Natural Draft of over 20 meters, allowing it to host the world’s largest container ships.

Proximity to international shipping lanes, making it a natural stopover for vessels between the East and West.

Integrated logistics and infrastructure, designed to handle 1 million TEUs (twenty-foot equivalent units) in the first phase.

According to maritime experts, Vizhinjam has the potential to save India an estimated $220 million annually in transhipment fees paid to foreign ports — a saving that will be Colombo’s loss.

What’s at Stake for Colombo?

Colombo Port has been a cornerstone of Sri Lanka’s economy, contributing significantly to revenue, employment, and international relevance. It handled nearly 7 million TEUs in 2023, of which nearly 60% was India-bound cargo. This dependency on Indian trade has always been a strength — and a vulnerability.

With Vizhinjam operational, Indian shippers may redirect a substantial portion of cargo to the domestic port, avoiding reliance on foreign hubs. This could:

Reduce container volume at Colombo, especially from southern Indian ports.

Impact port revenue and job creation in Colombo’s logistics sector.

Exacerbate economic strain in a country already grappling with post-crisis recovery.

“Colombo Port’s future hinges on how fast it can innovate, expand, and compete,” said a shipping analyst based in Singapore. “Vizhinjam is lean, modern, and closer to the cargo origin. That’s hard to beat.”

A Wake-Up Call or an Opportunity?

Not all see Vizhinjam as a threat. Some Sri Lankan officials believe the port can actually complement Colombo rather than cannibalize it — especially if both ports collaborate in forming a regional maritime network.

Moreover, Colombo still offers advantages:

Established reputation and reliability

A growing Colombo Port City project

Strategic involvement of foreign players like China Merchant Port Holdings

Still, Colombo will now have to rethink its value proposition, possibly by offering lower handling charges, investing in automation and digitalization, or repositioning itself as a niche player in high-value or specialized cargo.

The Bigger Picture

Vizhinjam’s rise comes amid India’s broader goal of becoming a global logistics powerhouse, reducing its dependence on foreign ports, and strengthening maritime security and control in the Indian Ocean.

It also fits within a wider narrative of regional competition and shifting alliances, with ports emerging as both economic engines and strategic assets. As India challenges Sri Lanka’s maritime dominance, Colombo must decide: adapt, compete, or collaborate.