The Andhra Pradesh government has approved the development of a greenfield port and a mega shipbuilding cluster at Dugarajapatnam in Tirupati district, marking a major milestone in India’s shipbuilding ambitions.
The project will be implemented through a 50:50 special purpose vehicle (SPV) between the Andhra Pradesh Maritime Board (APMB) and the Centre-owned Visakhapatnam Port Authority under the Ship Building Development Scheme (SbDS), which was recently approved by the Union Cabinet.
According to a January 2 order issued by the state’s Infrastructure & Investment (Ports) Department, the N Chandrababu Naidu-led government has authorised APMB to acquire around 2,000 acres of land for the project. The land will be transferred to the SPV as equity from the state government. APMB has also been empowered to initiate the process of selecting a strategic shipyard partner to develop the cluster within the SbDS framework.
With this decision, Andhra Pradesh has become the first state in the country to formally approve a mega greenfield shipbuilding cluster, just a week after the Ministry of Ports, Shipping and Waterways issued detailed guidelines on December 26.
The proposed greenfield shipbuilding cluster will feature a waterfront of about 2 km and a total land area of nearly 2,000 acres. Of this, around 1,000 acres will be dedicated to shipyards, while the remaining area will support ancillary industries, internal infrastructure, social facilities, and common maritime assets. Each cluster is envisaged to have a total shipbuilding capacity of approximately 1.2 million gross tonnage (GT) per annum, with at least one anchor shipyard designed for a minimum capacity of 0.5 million GT per annum to be achieved within ten years of commissioning.
Following the finalisation of Dugarajapatnam as the site, the SPV will be able to seek in-principle approval from the National Shipbuilding Mission (NSbM) through the Directorate General of Shipping. The proposal will then be evaluated by the NSbM’s inter-ministerial governing board, with inputs from an Independent Evaluation Agency and the implementing agency, before final approval is granted.
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 breakwaters, tide-independent basins, wave breakers, channel and basin development, land reclamation, internal infrastructure, utilities, and common maritime assets such as floating cranes and barges.
The SPV will be responsible for planning, financing, and developing the common infrastructure. Land earmarked for the cluster will be transferred to the SPV at a nominal cost of ₹1, while any land acquisition required will be undertaken by the state government at its own expense.
As per the ministry’s guidelines, central capital assistance will be released only after at least 90 per cent of the land has been acquired, key statutory approvals—such as environmental and CRZ clearances—have been secured, and firm investment commitments from anchor shipyard partners have been obtained.
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 pay an agreed lease or concession fee to the SPV.
The Dugarajapatnam project is expected to play a pivotal role in strengthening India’s shipbuilding and repair ecosystem, boosting coastal industrialisation, and positioning Andhra Pradesh as a key maritime manufacturing hub.
