HD Korea Shipbuilding & Offshore Engineering is moving ahead with a shipyard project in Thoothukudi, Tamil Nadu, with a planned annual capacity of 3.5 million to 4.0 million tonnes and total investment of $4.0 billion.
The scale is close to the 4.0 million to 4.5 million tonnes of combined production capacity that the Indian government plans to secure through three to four shipbuilding clusters.
India has set targets of entering the global top 10 in ship ownership and shipbuilding by 2030 and reaching the top 5 by 2047. To support that goal, the country plans to expand ship ownership sevenfold to 100 million tonnes by 2047 and increase shipbuilding production fortyfold to 4.5 million tonnes by 2037.
According to local Indian media on 16 March, HD Hyundai signed a memorandum of understanding with the Tamil Nadu government in December last year. A technical team of 15 to 20 people is currently on site coordinating design and construction plans.
The Thoothukudi project is separate from the block manufacturing facility at Cochin Shipyard in Kochi. HD Hyundai is pursuing the project independently, while discussions are underway on partial equity participation by the Maritime Development Fund.
The investment structure calls for the Tamil Nadu state government to hold 10–12% equity in return for land and infrastructure support. The Maritime Development Fund is set to hold 20–25%, while HD Hyundai will retain the majority of the remaining stake.
Under India’s shipbuilding development plan, the central government will provide infrastructure cost support of 10–12% and production-linked incentives of 15–25%. That would result in an expected subsidy effect equal to 45–47% of the total project cost.
HD Hyundai plans to position the Thoothukudi yard as an anchor shipyard to attract suppliers and partner companies into a cluster covering about 3,000 acres. The Tamil Nadu government is also reported to be in separate talks with POSCO on a support package for a steel plant.
The group also plans to establish a marine crane manufacturing facility within the cluster. Thoothukudi is described as having location characteristics similar to Ulsan, where HD Hyundai’s main shipyards are located, including low salinity, reduced exposure to typhoons and other natural disasters because Sri Lanka acts as a natural shield, and an industry-friendly policy environment.
