Andhra Pradesh clears India’s first mega greenfield shipbuilding cluster at Dugarajapatnam

By Admin

06 Jan, 2026

introduction
In a landmark move for India’s maritime and manufacturing ambitions, the Andhra Pradesh government has approved the development of a greenfield port and the country’s first mega greenfield shipbuilding cluster at Dugarajapatnam in Tirupati district. The decision places Andhra Pradesh at the forefront of India’s shipbuilding ecosystem and signals a strong push towards coastal industrialisation, self-reliance, and global competitiveness in maritime manufacturing.

Project structure and institutional framework
The mega shipbuilding cluster at Dugarajapatnam will be implemented through a 50:50 special purpose vehicle (SPV) formed by the Andhra Pradesh Maritime Board (APMB) and the Centre-owned Visakhapatnam Port Authority. This initiative falls under the Ship Building Development Scheme (SbDS), which was recently approved by the Union Cabinet.

As per a January 2 order issued by the state’s Infrastructure & Investment (Ports) Department, the N Chandrababu Naidu-led government has authorised APMB to acquire approximately 2,000 acres of land for the project. This land will be transferred to the SPV as equity from the state government, demonstrating Andhra Pradesh’s strong commitment to the development. APMB has also been empowered to initiate the selection of a strategic shipyard partner to develop the cluster in line with the SbDS guidelines.

First-of-its-kind approval in India
With this clearance, Andhra Pradesh has become the first state in India to formally approve a mega greenfield shipbuilding cluster. This comes just a week after the Ministry of Ports, Shipping and Waterways issued detailed operational guidelines for the scheme on December 26, highlighting the state’s proactive approach and readiness to capitalise on central policy initiatives.

The selection of Dugarajapatnam as the project site enables the SPV to seek in-principle approval from the National Shipbuilding Mission (NSbM) through the Directorate General of Shipping. The proposal will then undergo evaluation by the NSbM’s inter-ministerial governing board, with inputs from an Independent Evaluation Agency and the implementing agency, before receiving final approval.

Scale, capacity, and infrastructure plan
The proposed greenfield shipbuilding cluster is designed on a massive scale. It will feature a waterfront of around 2 km and span nearly 2,000 acres of land. Approximately 1,000 acres will be allocated to shipyards, while the remaining area will support ancillary industries, internal infrastructure, social facilities, and common maritime assets.

Each shipbuilding cluster under the scheme is envisaged to have a total capacity of about 1.2 million gross tonnage (GT) per annum. Importantly, at least one anchor shipyard within the cluster will be designed for a minimum capacity of 0.5 million GT per annum, to be achieved within ten years of commissioning. This scale positions the Dugarajapatnam cluster to handle large commercial vessels and advanced shipbuilding requirements.

Funding support and development responsibilities
Under the Shipbuilding Development Scheme, approved greenfield shipbuilding clusters are eligible for 100 per cent capital assistance from the Centre for core infrastructure. This includes critical components such as breakwaters, tide-independent basins, wave breakers, channel and basin development, land reclamation, internal roads, utilities, and common maritime assets like floating cranes and barges.

The SPV will be responsible for planning, financing, and developing this common infrastructure. Land earmarked for the project will be transferred to the SPV at a nominal cost of ₹1. Any additional land acquisition required will be undertaken by the state government at its own expense, further reducing entry barriers for private shipyard developers.

However, central capital assistance will be released only after specific conditions are met. These include acquisition of at least 90 per cent of the required land, securing key statutory approvals such as environmental and Coastal Regulation Zone (CRZ) clearances, and obtaining firm investment commitments from anchor shipyard partners.

Long-term leasing and commercial operations
As per the ministry’s guidelines, land and shared maritime infrastructure developed under the scheme will be leased to shipyard developers for an initial tenure of 60 years, extendable by mutual consent. Anchor shipyards will invest in yard-specific infrastructure and operations on a commercial basis and will pay an agreed lease or concession fee to the SPV.

This model ensures long-term stability for investors while allowing the SPV to sustain operations and maintenance of common infrastructure through predictable revenue streams.

Strategic importance for Andhra Pradesh and India
The Dugarajapatnam mega shipbuilding cluster is expected to play a pivotal role in strengthening India’s shipbuilding and ship repair ecosystem. It will support the development of ancillary industries, generate large-scale employment, and boost coastal industrialisation in southern India.

For Andhra Pradesh, the project positions the state as a key maritime manufacturing hub, complementing its existing port-led development strategy. At the national level, it aligns with India’s broader goals of reducing dependence on foreign shipyards, enhancing export capabilities, and building a globally competitive maritime sector.

Overall, the approval of India’s first mega greenfield shipbuilding cluster marks a defining moment for the country’s maritime future, with Dugarajapatnam set to emerge as a cornerstone of next-generation shipbuilding and industrial growth.