Mazagon Dock Limited (MDL), India’s premier shipbuilding company, is looking to invest in Andhra Pradesh after having waited for Tamil Nadu to respond to its proposal to build a greenfield mega ship-building cluster in Thoothukudi.
The MDL had signed a deal with the Tamil Nadu government in September 2025. It had publicly committed an investment of ₹15,000-18,000 crore for the project, after its board had approved the commitment during MDL’s Q2 FY26 earnings call in November 2025. The plan was approved for forming a 1,050-acre greenfield shipyard intended to be developed over a period of 10-12 years, aimed at targeting very large crude carriers (VLCCs) up to 3,00,000 DWT.
But now, after the Tamil Nadu government has brought a foreign company onboard for the strategically important cluster project, allegedly without following the due process, MDL is seeking other options. The Tamil Nadu government’s move has raised questions on why Indian companies were not given an opportunity for competitive bidding for a strategic project that will see huge monetary subsidisation by the Centre and the State to the tune of thousands of crores. It comes at a time when indigenisation is being given a push under the Maritime Amrit Kaal Vision 2047.
Failing in its bid to secure this project, MDL now wants to invest over ₹29,000 crore for a mega shipbuilding cluster in Andhra Pradesh. It has expressed interest in becoming the anchor investor there. A team from MDL is soon expected to conduct a feasibility study for developing a planned shipbuilding capacity of 1.2 million tonnes at the cluster.
The development has raised questions about the shunting out of Indian shipyards by the Tamil Nadu government, on whether the State government inverted the prescribed procedure, subverted the competitive bidding process, and failed to maintain transparency about one of India’s most ambitious cluster anchor shipyard projects.
Thoothukudi (Tuticorin) in Tamil Nadu has been identified by the Government of India as one of the premier locations for a greenfield mega-cluster, due to its natural advantages like extensive coastal land, natural cyclone shielding, low atmospheric salinity, proximity to international shipping lanes, and an existing deep-water port. These clusters are intended to target approximately 1.2 million Gross Tonnage per annum capacity.
As per the Union Government’s Shipbuilding Development Scheme Guidelines, notified by the Ministry of Ports, Shipping and Waterways (MoPSW) on December 26, 2025, a sequential process has been laid down for the development of greenfield shipbuilding clusters.
But access to the detailed timeline of the project raises questions on whether this sequence was subverted.
On September 19, 2025, Mazagon Dock Shipbuilders Limited (MDL) signed a Memorandum of Understanding with ‘Guidance Tamil Nadu’ for a greenfield shipyard on India’s eastern coast. Both MDL and Cochin Shipyard signed MoUs with Tamil Nadu for greenfield shipyards at Thoothukudi, with a combined stated investment of ₹30,000 crore, during the Government of India’s ‘Samudra se Samriddhi’ event in Bhavnagar.
In November last year, MDL, during its Q2 FY26 earnings call, referred to a planned Thoothukudi greenfield shipyard with a total investment of ₹15,000–18,000 crore. Since then, it waited for a response from the Tamil Nadu government and an Expression of Interest (EoI) process from the Special Purpose Vehicle (SPV).
Instead, a month later, a foreign company announced the signing of an ‘Exclusive Business Cooperation Agreement’ with the Government of Tamil Nadu for a new shipyard at Thoothukudi, during the TN Rising Investment Conclave in Madurai, in the presence of then CM M.K. Stalin. HD Hyundai described it as a plan for a ‘second Ulsan’ with an investment reported at approximately $2-4 billion. This happened on December 7, 2025.
But the Shipbuilding Development Scheme (SbDS) Guidelines were formally notified by the Ministry of Ports, Shipping and Waterways only on December 26, a whopping 19 days after the HD Hyundai exclusive agreement was signed. Not just that, even the SPV was formed after over a month of the agreement. In January this year, NSHIP TN (National Shipbuilding & Heavy Industries Park, Tamil Nadu) SPV was formally incorporated as a 50:50 Joint Venture between VOCPA and SIPCOT.
HD Hyundai was allegedly exclusively selected as the Anchor Shipyard before the rules governing the selection process existed, and before the institution (the SPV) required to conduct the selection was formally incorporated. Despite repeated attempts, the Tamil Nadu Government did not respond to a detailed list of questions.
Published – June 09, 2026 07:00 am IST
