India's $9 billion island megaport sharpens China's 'Malacca dilemma'

The Indian government has launched the first construction phase of the $9 billion Galathea Bay container port on Great Nicobar Island, at the southern tip of the Andaman and Nicobar archipelago. The project will be developed by a consortium led by Adani Ports under a 30-year concession. The first phase is to be completed by 2030, providing an annual capacity of 4 million TEU containers; full capacity will be reached by 2037.

The port's strategic significance comes from its position at the crossroads of the Indian Ocean's main trading routes. Roughly 84,000 ships pass through the Strait of Malacca each year, and 80 percent of China's oil imports transit through this corridor. Located around 600 kilometres south of Sri Lanka's Hambantota, the new port will create a rival logistics hub. India is planning a further $12 billion in associated infrastructure investment to strengthen the navy's regional reach.

Chinese Foreign Ministry spokesperson Mao Ning described the project as 'a unilateral move that could create regional instability'. Indian Foreign Minister Subrahmanyam Jaishankar said the port is 'entirely commercial and humanitarian in purpose'. ASEAN members Indonesia and Vietnam reacted positively, saying the project could diversify regional trade links. According to a Bloomberg analysis, Galathea could trim average global container transit times by up to two days.