India earmarks 15,000 acres for coastal shipbuilding clusters, targets ₹1.5 lakh crore 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, documents reviewed by businessline show.

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.

Push for green fuel vessels

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.

“Five green hydrogen manufacturing companies are coming in with the first molecule expected by 2027,” the official said adding that pipeline corridor for transportation of green hydrogen or green ammonia is being developed at the port.

“Green Thoothukudi Hydrogen Cluster has been recognised by the World Economic Forum,” the official added.

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, documents reviewed by businessline show.

Andhra finalises Durgarajapatnam

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.

“This apart Andhra has identified 47 locations, primarily creeks, for setting up standalone shipyards,” an official said.

In the case of Andhra Pradesh, 3,000 acres have been immediately identified.

Detailed Plans in Gujarat

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.

“Apart from land for the shipbuilding cluster – which the Centre is pushing, the state government will identify another set of land parcels that would be handed over to private players for setting up shipyards,” an official in the know 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, documents reviewed by businessline show.

“Feasibility studies are on, and a policy – including state specific incentives, will be announced soon,” a senior official of the Gujarat Maritime Board said.

“We are opening up dry dock policy and this will give an unique approach of integration of shipbuilding, repairs and recycling under one roof. Waste management facilities are being developed at Alang,” the official said.

Big Push in Maharashtra

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.

“Two more locations that include Nandgaon—2,669 acres, and Dhabol—900 acres, are also under consideration in Maharashtra,” a MoPSW official said.

According to those in the know, consultants are likely to be appointed soon for operationalising at least two of the proposed clusters “as quickly as possible”.

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”, an official said.

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.

Published on July 27, 2025

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