Centre Eyes Mega Shipbuilding Hubs, Thoothukudi Likely Site for ₹10,000 Crore CSL-Hyundai Project

India is making a significant push to establish itself as a major global shipbuilding and repair hub, with the Centre identifying land parcels in Andhra Pradesh, Tamil Nadu, and Gujarat for the development of mega facilities. Adding momentum to this initiative, South Korean giant HD Hyundai is reportedly nearing the final stages of a partnership with Cochin Shipyard Limited (CSL) to manufacture large vessels domestically for international trade.

Officials close to the developments indicate that CSL and HD Hyundai are currently finalizing the location for this ambitious shipbuilding facility. Thoothukudi in Tamil Nadu is emerging as the likely site for this mega infrastructure project, which is expected to attract an investment of around ₹10,000 crore upon completion. When contacted by ET regarding the partnership talks, HD Hyundai stated that "Nothing has been confirmed," while CSL had not responded by press time.

This progress aligns with the Indian government's broader strategy, supported by key financial mechanisms. The Finance Ministry's Expenditure Finance Committee (EFC) is close to completing appraisals for an enhanced shipbuilding financial assistance policy valued at ₹18,090 crore, alongside a maritime development fund of ₹25,000 crore, both announced in the Budget 2025-26.

Beyond the potential CSL-HD Hyundai venture, the other identified land parcels are being offered to attract further international investment in the shipbuilding sector. According to officials, companies from the Netherlands, France, and the Middle East have expressed interest in setting up manufacturing facilities in India.

Officials familiar with the deliberations suggest that increased financial assistance to the shipbuilding industry is imminent, specifically aimed at supporting the domestic manufacture of large vessels. India currently accounts for less than 1 per cent of the global shipbuilding market but harbors ambitions to break into the top 10 globally by 2030 and the top five by 2047. The government is pursuing a multi-pronged approach, which also includes boosting the procurement of state-owned ships.

Related initiatives are also underway, such as the planned establishment of Bharat Container Line, a national container shipping carrier intended to reduce reliance on foreign-flagged vessels and bolster India's control over its foreign trade.

An existing financial assistance policy for domestic shipyards, launched in December 2015, supports contracts signed between April 1, 2016, and March 31, 2026, with a focus on specialized vessels like those for wind farm installations and green-fueled ships. Furthermore, there are plans to provide direct capital support for the development of essential shipyard infrastructure, including breakwaters and capital dredging.