Andhra Pradesh Chief Minister N Chandrababu Naidu is reportedly using his influence as a partner in the ruling NDA at the Centre to persuade South Korean shipbuilding major HD Hyundai Heavy Industries Co Ltd to set up a shipyard at Kakinada instead of Thoothukudi in Tamil Nadu, as reported in The Economic Times.
According to the report, the Andhra Pradesh government has approached HD Hyundai with the promise of incentives that could be more attractive than those offered by Tamil Nadu for the company’s proposed anchor facility in the greenfield shipbuilding cluster at Thoothukudi.
The move has reportedly put HD Hyundai in a difficult position, even as the company has already chosen Thoothukudi for a proposed mega shipyard.
Officials in New Delhi are said to have expressed reservations over Andhra Pradesh’s efforts to persuade the company to shift its proposed project. The Centre is reportedly of the view that it would be inappropriate to encourage an investor that has already selected one state to move to another.
HD Hyundai, considered the world’s second-largest shipbuilder, is also the only major global shipbuilder to have so far committed to establishing a shipyard in India.
The proposed Thoothukudi project is backed by the ₹69,725-crore package approved by the Union Cabinet last year to strengthen India’s shipbuilding sector.
₹4-Billion Thoothukudi Shipyard
The proposed project at Thoothukudi envisages an investment of around $4 billion and is being developed through a partnership involving HD Korea Shipbuilding & Offshore Engineering Co Ltd, the holding company of HD Hyundai Heavy Industries, and the National Shipbuilding & Heavy Industries Park, Tamil Nadu Ltd.
A tripartite MoU was signed on April 20, 2026, between HD KSOE and NSHIP-TN, a special purpose vehicle promoted jointly by the V.O. Chidambaranar Port Authority, SIPCOT and Sagarmala Finance Corporation Ltd.
The agreement covers the joint development, financing, construction and operation of a mega shipyard at the proposed Thoothukudi shipbuilding cluster. The facility is envisaged to have an annual capacity of 2.5 million gross tonnes.
The Techno-Economic Feasibility Report has already been completed, while the Detailed Project Report and Depth Feasibility Report are under preparation. NSHIP-TN has also received in-principle approval from the National Shipbuilding Mission for the proposed greenfield cluster.
Against this backdrop, officials reportedly believe that getting HD Hyundai to shift the project to Kakinada would be difficult.
The report also said that the Centre would not want to recommend one state over another to the Korean company after HD Hyundai had already selected Thoothukudi.
Andhra Pradesh’s Kakinada Pitch
Despite the progress in Tamil Nadu, the Andhra Pradesh government has reportedly stepped up efforts to attract HD Hyundai to Kakinada.
Interestingly, the state is pitching Kakinada rather than Dugarajapatnam, where another greenfield shipbuilding cluster has already received in-principle approval from the National Shipbuilding Mission.
The Andhra Pradesh government is said to have offered land and waterfront facilities at Kakinada Gateway Port, being developed by Auro Infra, for the proposed shipyard.
The push was intensified in July when Andhra Pradesh IT Minister Nara Lokesh led a delegation to South Korea as part of the state’s global investment outreach.
The delegation met HD KSOE and presented Andhra Pradesh’s maritime potential and its advantages for shipbuilding and marine engineering.
Kakinada Gateway Port officials also pitched the facility as a potential long-term shipbuilding hub, citing its seafront availability, large contiguous land parcels, deep-draft marine infrastructure and long-term concession framework.
The port has been projected as having the potential to develop into a major shipbuilding and repair hub on the lines of Busan.
Will TN Retain The Project?
The HD Hyundai project was originally brought to Tamil Nadu by the previous DMK government under Chief Minister MK Stalin in December 2025.
After the DMK lost power in the May 2026 elections, the C Joseph Vijay-led TVK government continued to pursue the project.
Industries Minister G Keerthana Sampath made her first official overseas trip after assuming office to South Korea in June. During the visit, she toured an HD Hyundai shipyard and held discussions with senior company officials regarding the proposed Thoothukudi project.
The developments now put the project at the centre of an emerging inter-state competition for major industrial investments.
While Tamil Nadu has already secured the MoU and moved forward with feasibility and project preparation, Andhra Pradesh is attempting to persuade HD Hyundai to reconsider its location by offering what it claims are more attractive incentives.
Industry sources cited by The Economic Times believe HD Hyundai is unlikely to establish two greenfield shipyards in India.
The company is therefore reportedly facing a choice between proceeding with its planned Thoothukudi facility or responding to Andhra Pradesh’s aggressive pitch for Kakinada.
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