The recent decision by the Andhra Pradesh government to approve the development of a Greenfield Port and a National Mega Shipbuilding Cluster at Dugarajapatnam in Tirupati district marks a significant strategic intervention in India’s maritime and shipbuilding ecosystem.

Situated on the Andhra Pradesh coast, Dugarajapatnam has long been considered a location of high potential for port-led industrialisation, and this formal approval unlocks a structured pathway for its transformation into a major maritime and shipbuilding hub.

The project will be implemented under the Shipbuilding Development Scheme of the Ministry of Ports, Shipping and Waterways, thereby aligning the State initiative with the broader national agenda to enhance India’s shipbuilding capacity and maritime competitiveness.

By being nested within this central scheme, the Dugarajapatnam initiative is expected to benefit from policy support, financial incentives, and a more predictable regulatory framework that is specifically tailored to catalyse shipbuilding and ancillary marine industries.

The Andhra Pradesh Maritime Board has been designated as the principal State-level implementing agency for both the Greenfield Port and the anchor shipyard. Under the approval, APMB has been authorised to take forward the development of an anchor shipyard with an annual capacity of 0.5 million gross tonnes.

This design capacity is substantial in the Indian context and is intended to serve as the nucleus around which a broader shipbuilding and repair ecosystem can gradually evolve. The anchor yard will likely cater to a spectrum of vessels, potentially ranging from coastal and offshore support vessels to medium-range cargo and specialised vessels, depending on the eventual techno-commercial configuration.

The shipbuilding cluster is planned to be fully realised within a maximum timeframe of ten years from the commissioning of the anchor shipyard. This phased approach suggests that the authorities envisage a gradual build-up of capabilities, infrastructure, and industrial linkages. In the initial phase, core shipyard infrastructure, basic utilities, and connectivity will be prioritised. Subsequent phases are expected to focus on attracting marine equipment manufacturers, fabrication units, design and engineering firms, logistics providers, and training institutions. The ten-year horizon provides a realistic window to synchronise infrastructure rollout with market development and investor interest.

The government’s decision is anchored in the findings of a Techno-Economic Feasibility Report prepared by RITES, with coordination support from the Andhra Pradesh Maritime Board and the Visakhapatnam Port Trust. The use of a TEFR prepared by an established technical consultancy indicates that key parameters such as cargo potential, draft requirements, hydrodynamic conditions, hinterland connectivity, environmental sensitivities, and financial viability have been subjected to structured assessment. Coordination with Visakhapatnam Port Trust suggests that traffic complementarities, regional port dynamics, and possible decongestion or diversification strategies have also been factored into the decision-making process.

In line with the Shipbuilding Development Scheme guidelines, the State government has approved the formation of a special purpose vehicle to execute the project. This SPV will be structured as a 50:50 joint venture between the Andhra Pradesh Maritime Board and Visakhapatnam Port Trust. Equal equity participation by a State maritime agency and a major central port entity is intended to create a balanced institutional construct, combining local facilitation and land-related support with the operational expertise and port management experience of VPT.

The board of the SPV will comprise an equal number of directors nominated by the State government and Visakhapatnam Port Trust. This parity in representation is designed to ensure balanced decision-making and alignment with both State developmental priorities and national maritime policy objectives. Such a governance structure aims to reduce institutional friction, improve coordination, and expedite critical decisions on project planning, procurement, and stakeholder engagement.

A key enabling component of the project is the acquisition of approximately 2,000 acres of land for the establishment of the National Mega Shipbuilding Cluster. The identified land parcel will be central to hosting the anchor shipyard, associated fabrication and outfitting facilities, warehouses, logistics yards, and allied industrial units. By approving the land acquisition, the State government has signalled its commitment to providing the spatial and physical base required for the long-term viability of such a large industrial and maritime complex.

The Andhra Pradesh Maritime Board has been authorised to mobilise the necessary financial and administrative resources for the completion of land acquisition. Once consolidated, this land will be transferred to the SPV as the State’s equity contribution. This modality lowers the initial capital outlay burden on the SPV while ensuring that the State’s stake is backed by a tangible and appreciating asset. It also helps in structuring the project’s capital stack in a manner that can be more attractive to future investors and development partners.

In parallel, APMB has been empowered to drive the process of obtaining the statutory approvals required for both the Greenfield Port and the shipbuilding cluster through the SPV. These approvals will include, inter alia, environmental clearances, coastal regulation zone permissions, port and harbour engineering approvals, town and country planning permissions, and clearances related to rail, road, and utilities connectivity. By explicitly authorising APMB to coordinate and consolidate these clearances, the government aims to streamline the approval process and compress project timelines.

An important element of the implementation framework is the selection of an appropriate development partner for the shipyard. The SPV, under the guidance of APMB, will be responsible for identifying and onboarding a partner with strong credentials in shipyard design, construction, and operation. The selection will be undertaken strictly in accordance with the guidelines prescribed under the Shipbuilding Development Scheme. This implies transparent bidding processes, adherence to eligibility criteria, and evaluation based on technical competence, financial strength, and long-term commitment to shipbuilding in India.

From a strategic perspective, the Dugarajapatnam Greenfield Port and National Mega Shipbuilding Cluster can be expected to play a significant role in diversifying and strengthening the maritime infrastructure along the Andhra coast. The addition of a new deep-draught port, supported by an integrated shipbuilding complex, can help decongest existing ports, attract new coastal and international shipping lines, and serve as a focal point for export-oriented industries in the hinterland. Over time, this could contribute to lowering logistics costs, enhancing trade competitiveness, and supporting national initiatives such as Sagarmala and Atmanirbhar Bharat.

The cluster is also likely to create substantial economic and employment opportunities in the region. Shipbuilding is traditionally a high-employment sector with strong linkages to steel, heavy engineering, electrical and electronics, marine equipment manufacturing, and specialised services such as classification, surveying, and maritime training. The development of the Dugarajapatnam cluster is therefore expected to catalyse a wide range of direct, indirect, and induced employment in and around Tirupati district and adjacent coastal districts, while also supporting skill development in marine and heavy engineering disciplines.

In addition, the project presents an opportunity to integrate modern technologies and best practices into India’s shipbuilding sector. With a greenfield setting, the anchor shipyard and associated facilities can be designed from the outset with digital ship design tools, modular construction techniques, advanced material handling systems, and environmentally friendly processes. This can facilitate higher productivity, improved quality, and better compliance with global environmental and safety norms, positioning the Dugarajapatnam cluster as a competitive player in regional and international shipbuilding markets.

The coordinated involvement of the Ministry of Ports, Shipping and Waterways, Visakhapatnam Port Trust, and the Andhra Pradesh government is expected to mitigate some of the typical implementation risks associated with large infrastructure projects.

However, the success of the initiative will still depend on timely land acquisition, efficient execution of civil and marine works, effective environmental management, and the ability to attract and retain a capable industrial and financial consortium as development partner. Market conditions in global shipping and shipbuilding over the next decade will also be a critical determinant of the pace and scale of capacity ramp-up at the cluster.

The approval of the Dugarajapatnam Greenfield Port and National Mega Shipbuilding Cluster represents a major milestone in Andhra Pradesh’s maritime infrastructure development. Backed by a techno-economic feasibility study, structured through a 50:50 SPV between APMB and Visakhapatnam Port Trust, and supported by the Shipbuilding Development Scheme, the project is poised to emerge as a key node in India’s shipbuilding and port-led growth strategy.

Its effective implementation over the coming decade has the potential to reshape the industrial and maritime landscape of the Andhra coast and contribute meaningfully to India’s aspiration of becoming a major global maritime and shipbuilding power.

Agencies