The Indian Ocean raid (Operation C, the Third Mobile Operation in the Indian Ocean and the Battle of Ceylon in Japanese) was a sortie of the Imperial Japanese Navy (IJN) from 31 March to 10 April 1942. Japanese aircraft carriers (Admiral Chūichi Nagumo) struck Allied shipping, naval bases and airfields around British Ceylon but failed to find most of the Eastern Fleet. The British were forewarned by signals intelligence and the fleet sailed before the raid; its attempt to surprise the Japanese was frustrated by poor tactical intelligence.
Concurrent with Operation C, the IJN dispatched Malaya Force (Vice Admiral Jisaburō Ozawa) consisting of the aircraft carrier Ryūjō, six cruisers, a light cruiser and four destroyers, to raid the northern Bay of Bengal. In three days, Malaya Force aircraft and ships sank twenty merchant ships and damaged three, a total of over 130,000 GRT.
Following Operation C, the British expected a Japanese offensive in the Indian Ocean. The main base of the Eastern Fleet was moved to East Africa and Ceylon was reinforced. Somerville kept his fast carrier division, Force A, "in Indian waters, to be ready to deal with any attempt by the enemy to command those waters with light forces only". The Japanese had no plans to follow up their success and within the year, defeats in the Pacific made it impossible to do so.
Ceylon (now Sri Lanka) is off the south-east of India between shipping routes from Singapore and Rangoon to the Red Sea and the Persian Gulf. There are natural harbours at Colombo on the south-western coast and Trincomalee on the north-eastern coast, a naval anchorage and base. Ceylon was a geographically important part of the British Empire and its system of trade, communication and military organisation. In the 1930s more shipping tonnage was handled in Ceylon than all the ports of India. Since the beginning of the Second World War, the colonial government had engaged in mass recruitment for local defence, overseas labouring and expanded food production. Tea and rubber production was emphasised and rubber output rose from 99,500 long tons (101,100 t) in 1941 to 105,500 long tons (107,200 t) in 1943. The 3,600 workers in civil engineering converted to the repair and refitting of ships and the manufacture of dummy aircraft, guns and radar installations.
When the Pacific War began on 7 December 1941, the Allied disasters in the Pacific, Malaya and the British débâcle at the Battle of Singapore in February 1942 made Colombo Harbour the basis for eastern trade and the centre for the assembly of Indian Ocean convoys. Colombo port was large enough for 45 ships but soon had 100 to 110 ships at once, causing much overcrowding. The fall of Singapore on 15 February 1942, the Allied defeat in the Dutch East Indies campaign (11 January – 9 March 1942) broke the British eastern defensive perimeter of the Bay of Bengal and the loss of the Andaman Islands on 23 March gave Japan control of the Andaman Sea, enabling ships to supply Japanese troops in the Burma Campaign. The Malacca Strait in the Netherlands East Indies was about 1,000 nmi (1,900 km; 1,200 mi) east of Trincomalee, making Ceylon a useful base for attacks on Japanese ships sailing to Rangoon in Burma.
Ceylon was hastily garrisoned by Australian troops returning from North Africa and HMS Indomitable was used as a high-speed aircraft ferry, shuttling fighter aircraft to Ceylon. From September to December 1941, 710 troop reinforcements arrived on the island and from January to March 1942, another 2,612 arrived; during April and June, 2,112 more troops joined the garrison and 4,993 troops moved between the Far East and Ceylon from October 1941 to March 1942. The extent of the disasters that befell the British in early 1942, led in March to Admiral Sir Geoffrey Layton being transferred from the temporary command of the Eastern Fleet and installed as the Commander-in-Chief, Ceylon, after Admiral James Somerville took over the fleet. Layton was given authority over the military forces on the island and the civilian authorities of the governor, Sir Andrew Caldecott, "Do not ask permission to do things. Do them and report afterwards what you have done". Layton found the same complacency and inertia in Ceylon as he had experienced in Malaya,
...he takes complete charge of Ceylon and stands no nonsense from anyone.... He pulls all the Ministers legs... and they work for him all the harder.
A Japanese offensive into the Indian Ocean was postponed in March 1942 because the IJN was needed in the western Pacific against the United States and the Imperial Japanese Army (IJA) refused to allocate troops to invade Ceylon. The IJN planned a lesser effort, Operation C, also named the "Third Mobile Operation in the Indian Ocean", a raid into the Indian Ocean in early April. Operation C aimed to destroy the Eastern Fleet and disrupt British communications in the Bay of Bengal, in support of the Japanese invasion of Burma. Admiral Isoroku Yamamoto issued the order to proceed with Operation C to the 2nd Fleet and the Southern Force (Nampō Butai) of the IJN (Admiral Nobutake Kondō) on 9 March 1942. By 16 March, the plan was for the Kido Butai (1st Air Fleet) was to depart from Staring Bay, Celebes, on 26 March for an attack on Colombo on 5 April (C day) to catch the Eastern Fleet in port.
The Japanese force, commanded by Admiral Chūichi Nagumo, had five aircraft carriers, Akagi, Shōkaku and Zuikaku in Carrier Division 5 and Sōryū and Hiryū in Carrier Division 2. The carriers were protected by the four Kongo-class battleships and both Tone-class cruisers. Japanese intelligence on the Eastern Fleet was accurate but overestimated the air strength on Ceylon. The 19 March order was vague, a "considerable" portion of British naval and air forces in the Indian Ocean were "deployed in Ceylon area". The Japanese sent submarines to Colombo and Trincomalee to keep watch but they achieved little. The Maldive Islands were reconnoitred by submarine but failed to uncover that Gan (Port T) was a fleet fuelling base.
In Southern Force order 139, issued on 20 March, the commander of the 2nd Submarine Squadron, Rear-Admiral Hisashi Ichioka, required that two days before the raid on Ceylon, the submarine I-7 was to send its Watanabe E9W seaplane (Slim to the Allies) on reconnaissance over Colombo and Trincomalee and on the day of the carrier attack reconnaissance and weather data were to be gathered by I-2 and I-3. I-4 and I-6 were to attack Allied ships as the fled from Ceylon after the carrier raid. I-1 was sent back to Yokosuka for repairs to its starboard diesel and I-5 was to patrol off Cape Comorin (now Kanyakumari), the southern tip of India.
The reinforcement of the Eastern Fleet depended on transfers from Britain and the Mediterranean. In late December 1941, a reassessment of the threat posed by Japan envisioned the Navy transferring the majority of the big ships to the Eastern Fleet. Matters were made urgent by the Attack on Pearl Harbor that sank much of the United States Pacific Fleet, that exposed the weak forces in Malaya to attack. Heavy units were freed by American reinforcements in the Atlantic. The pre-war rearmament was beginning to yield more big ships. The Mediterranean Fleet transferred far less reinforcements than expected due to its losses in 1941.
Somerville assumed command of an Eastern Fleet in March 1942 that was smaller than envisioned in December 1941. Somerville divided the fleet into a fast Force A comprising the aircraft carriers HMS Formidable and Indomitable, the modernised battleship HMS Warspite (as flagship) and the modern cruisers and destroyers. Force B was formed around the old carrier HMS Hermes and four un-modernised Revenge-class battleships; a few submarines were also available. The ships had not operated together before and ship and air crews were deficient in training.
The Far East Combined Bureau (FECB) intelligence assessment of the strength of the Japanese force was mistaken, identifying only two carriers in the Japanese force. FECB also believed the Japanese would sail from Staring Bay on 21 March and that C Day was 1 April. Somerville planned to evade the Japanese during the day and close for torpedo attacks at night with radar-equipped Fairey Albacore torpedo-bombers. Somerville had orders from the Admiralty, to protect the communications in the Indian Ocean and to keep the Eastern Fleet in being by avoiding risks but sailed to attack the Japanese force, having been convinced by the FECB that its assessment was accurate.