Sri Lanka on Saturday sealed a billion-dollar deal to let a Chinese state firm take over a loss-making port in a move that has been opposed by unions and worries the island’s neighbours.

The long-delayed sale $1.1 billion sale of a 70 per cent stake in Hambantota port, which straddles the world’s busiest east-west shipping route, was confirmed by Sri Lanka’s Ports Minister Mahinda Samarasinghe.

The government used tough laws against industrial action to stop workers going on strike this week to oppose the sale to China Merchants Port Holdings. India is nervous about China’s infrastructure moves into its traditional sphere of influence.

“We have addressed geopolitical concerns,” the minister said at a signing ceremony in Colombo. “China has accepted that everything in this agreement will operate under Sri Lankan law.”