Colombo noticeably became the most economical gateway to the Indian subcontinent, in terms of cost as well as time. The Colombo Port Expansion Project (CPEP) started commencement with the purpose of accommodating mega ships, under the long-term strategies of making Colombo the hub of South Asia. In this context, the purpose of this study is to investigate the causal relationship between Indian ports’ originated container traffic, and total transshipments of the port of Colombo, and also to identify the nature of the causality between the two variables, evaluating Granger causality test results. It finds unidirectional causality from total transshipments of Colombo to Indian ports’ originated transshipments in the port of Colombo. It suggested that ongoing port expansion projects, opening up for new markets and attracting new shipping lines in the port of Colombo, have generated significant impact on Indian ports’ container traffic, via the port of Colombo. Findings would be valuable for future forecasting of container traffic in Colombo port and the policy-making process in the port as well.

Abstract
 1. Introduction
  1.1 Port of Colombo: an overview
  1.2 South Indian ports’ originated container traffic in port of Colombo: an overview
 2. Literature review
 3. Research Methodology and empirical results
  3.1 Test of stationary and causality
  3.2 The Unit root test
  3.3 Granger causality test
  3.4 Test results
 4. Conclusions
 References

• Sooriya Bandara(Department of Shipping Management, Korea Maritime and Ocean University)
• Dong-Keun Ryoo(Division of Shipping Management, Korea Maritime and Ocean University) Corresponding author
• Ki-Myung Ahn(Division of Shipping Management, Korea Maritime and Ocean University)