"We..." War Heats Up Between Indian State Governments to Attract a $4 Billion Shipyard

[New Delhi (India) = Correspondent Pragy Awasati] The Indian state of Andhra Pradesh has proposed Kakinada Port as a candidate site for HD Hyundai's large shipyard, entering into a fierce competition with Tamil Nadu to attract the facility. Although Tamil Nadu has already signed official agreements for 2025 and 2026, Andhra Pradesh's new proposal is increasing the likelihood of variables affecting HD Hyundai's final investment location and business schedule.
According to local media reports on the 4th, the Andhra Pradesh government has set out to attract investment by proposing Kakinada Port to HD Hyundai Heavy Industries as a candidate site for a large-scale shipbuilding cluster. The strategy is to leverage Kakinada's land and maritime infrastructure to attract the approximately $4 billion investment originally planned for Tamil Nadu. This proposal has raised the possibility that HD Hyundai may reconsider its production base in India. Given that Tamil Nadu has already signed an official agreement and is preparing for the project, there are predictions that competition with Andhra Pradesh could affect the final location and project schedule.
HD Hyundai confirmed its entry into the Indian shipbuilding industry and signed a memorandum of understanding with the government of Tamil Nadu on December 7, 2025, agreeing to develop the Tutukudi shipbuilding facility. Subsequently, a tripartite agreement was signed between HD Hyundai, the government of Tamil Nadu, and the Marine Development Fund in April 2026, and a local technical team was deployed to the project site to proceed with development preparations.
However, local analysts suggest that Andhra Pradesh’s proposal for Kakinada goes beyond simply attracting new investment and could force a re-evaluation of the location and implementation plans for the Tamil Nadu project, which is already well underway. The Andhra Pradesh government is highlighting Kakinada’s land acquisition conditions and port and maritime infrastructure as key competitive advantages. The plan is to establish a shipbuilding cluster capable of concentrating large-scale ship construction and related parts production in one location, thereby making it HD Hyundai’s long-term production base in India. From HD Hyundai’s perspective, the situation demands a decision on whether to maintain the existing agreement with Tamil Nadu or to review Kakinada’s new conditions and infrastructure to change the project site.
Behind the competition among state governments in India lies the Indian federal government's policy to foster the shipbuilding industry. In September 2025, the Indian government approved a shipbuilding financial support scheme totaling 697.25 billion rupees (approximately 9.9846 trillion won). This policy aims to strengthen India's domestic shipbuilding capabilities and attract investment from foreign shipbuilders by providing financial support to companies developing shipbuilding and related infrastructure.
The Indian government views the shipbuilding industry as a strategic sector capable of simultaneously enhancing the competitiveness of both the manufacturing and shipping industries. This is because attracting local production facilities by major global shipbuilders can influence not only ship construction but also the growth of related industries such as equipment, steel, engineering, and logistics.
Hyundai recently withdrew from a joint block manufacturing project with Cochin Shipyard and decided to focus on constructing its own large-scale shipyard. Accordingly, the final location is expected to be determined by comprehensively considering not only port infrastructure but also investment costs, securing land and manpower, government support, supply chains, and existing contracts.

[email protected] Correspondent Pragya Awasati Reporter