Sri Lanka had earlier agreed to establish a strategic container terminal with India and Japan at the port of Colombo. Under the agreement, India and Japan were to hold 49 percent of the terminal's assets, while Sri Lanka's Ports Authority was to retain the majority stake.

But on Tuesday, the government of Sri Lanka declared the East Container Terminal to be the Ports Authority's wholly owned container terminal.

The government said that instead, with investments from India and Japan, it will build the port's West Container terminal.

In recent weeks, tension has increased in Sri Lanka over the port agreement between trade unions and opposition political parties that have asked the government to suspend the proposal to build the terminal with the assistance of India and Japan.

New Delhi, which sees the Indian Ocean region as its strategic backdrop, has been concerned about Beijing's economic and political control over Colombo for years.

In its major Belt and Road global infrastructure building initiative, China considers Sri Lanka to be a vital link and has given billions of dollars in loans for its projects over the past decade.

Maritime Business World