India charts ambitious course with ₹1.5 Lakh crore coastal shipbuilding investment

India has locked in nearly 15,000 acres of land across five coastal states — Odisha, Andhra Pradesh, Tamil Nadu, Gujarat and Maharashtra — for proposed shipbuilding clusters. Nearly 40 per cent of the land parcels identified or under consideration is across four locations in Maharashtra, approximately 5,800 acres. These come as the Ministry continues to woo global major towards ship-building activities in India.

According to a senior official of the Ministry of Ports, Shipping and Waterways (MoPSW), land parcels are being identified through the respective state governments.

The Ministry’s internal projections show that India would require at least 207 vessels – of its own – of 8.6 million gross tonnage. Requirements will be spread across the Ministries of Petroleum and Steel, Department of Fertilisers and the Shipping Corporation of India. The expected cost or investment is close to ₹1.5 lakh crore. For instance, in Odisha, 2,000 acres have been identified in Kendrapara near the Paradip Port. Pre-feasibility studies are on by the district authorities. In Tamil Nadu, 2,000 acres of land identified in and around Tuticorin (Thoothukudi).

A senior official aware of the developments said, Thoothukudi has been identified as a possible location for setting up the shipbuilding cluster and 1,800 acres of land with a 6.7 m sea front have been identified near the port. Another 1,200 acres are to be added soon, taking the total land availability to 3,000 acres. There will be a push towards green vessel manufacturing too, the official said. With 5 approved green hydrogen projects totalling 4 million tonnes per annum of green fuel — and ₹2 lakh crore of investments — there are plans to push the port and cluster as a green hydrogen hub.

Tamil Nadu is working on three investment promotion subsidies in shipbuilding that include a fixed percentage of capital investment reimbursed over 10 years; or a payroll-based subsidy where the percentage of annual payroll is reimbursed over 10 years or a per vessel incentive, where a capped per vessel reimbursement is made for the first few vessels built at the facility.

In case of Andhra Pradesh, 3,000 acres have been immediately identified. The techno economic feasibility studies are “almost finalised” for 2,500 acres at the Durgarajapatnam district for phase 1. And depending on requirements, the second phase of the project will see addition of another 2,500 acres.

This apart, in Machillipatnam – where a greenfield port is expected – nearly 500 acres of land have been identified and “it can be scalable further”. Apart from this, another 1,000 acres of land have been identified for shipbuilding clusters at Mulapeta. Plans are afoot to connect the two proposed clusters going forward. In the case of Andhra Pradesh, 3,000 acres have been immediately identified.

In Gujarat 2,000 acres of land have been identified in Kandla. A shipbuilding policy is under consideration and some changes to the existing one is being made in the Western Indian state, the official said. In the coastal state, Porbander and Kutch are seen as thee two major districts identified for setting up ports and ship-building clusters. And shipyards are being proposed in Bhavnagar, Amreli and Valsad.

In Maharastra, the four locations have been identified. This includes 2,550 acres in Dighi; 1,337 acres in Jaigad; 1,000 acres in Vijaydurg and 856 acres in Bankot. The models proposed by Maharashtra state government include marine shipyard clusters (MSCs), with 1,000 acres of land identified in Vijaydurg; the second involved shipyards being developed in existing ports – JNPA and Mumbai – or in upcoming ports like Vadhawan; and the third being standalone shipyards – developed by a concerned company.

Right now, Maharashtra is proposing a 15 per cent fiscal stimulus on project cost as capital subsidy. Combined with 14–30 per cent benefits of the Central schemes, it will “be competing with global majors like Korea. Financial assistance for skill development (up to ₹1 crore per project), and R&D support (up to ₹5 crore) have also been proposed.

At least 11 other locations are being considered by the Maharashtra government – which include Palghar, Raigad, Ratnagiri and Sindhudurg districts – covering rivers like Vaitarna, Amba, Kundalika, Rajpuri creek, Saitri and Waghotan for setting up stand-alone shipyards.