India is both the number one port of destination for transshipments
moving out of Colombo, and the number one port of origin for
transshipments coming in the port. The port of Colombo is complementary
to India’s growth aspirations. Today out of 4.7 million (TEUs) transshipment
volumes of port of Colombo, close to 40% are Indian transshipments coming
from East and West multiple ports of India and a major portion of the Indian
transshipment container traffic handled by the port of Colombo is down to
India. Using the Granger causality approach, this research investigates the
causality relationship between Indian ports’ originated transshipments and
total transshipments of port of Colombo based on monthly time series data
(transshipments throughput in TEUs) from 2008 to 2017.It finds a
unidirectional causality from total transshipments of Colombo to Indian
ports’ originated transshipments in port of Colombo. It suggested that the
ongoing port expansion projects, opening up for new markets and attracting
new shipping lines in port of Colombo have been created a significant impact
on Indian ports’ container traffic through port of Colombo.
Key words: Unit root test, Granger causality, Total transshipments, Indian
originated transshipments, Port of ColomboMaste