MDL Dugarajapatnam Shipyard Plan Gets Andhra Pradesh Boost
Mazagon Dock Plans ₹15,000 Crore Greenfield Shipyard at Dugarajapatnam
Mazagon Dock Shipbuilders Limited (MDL) has signed an agreement with the National Shipbuilding and Heavy Industries Park-AP (NSHIP-AP) to develop a large commercial shipyard at Dugarajapatnam in Andhra Pradesh.
MDL, a Navratna defence public sector undertaking under the Ministry of Defence, plans to invest about ₹15,000 crore in the project over the next five to seven years. The investment will depend on the required government approvals and clearances.
The proposed shipyard is expected to create direct and indirect employment for around 45,000 people in Andhra Pradesh. It is planned with an annual design capacity of 1.2 million Gross Tonnage (GT), with room for expansion if market demand grows.
The agreement was signed on 18 September in the presence of Andhra Pradesh Chief Minister N. Chandrababu Naidu. Capt. Jagmohan (Retd.), Chairman and Managing Director of MDL, signed for the shipbuilder, while Praveen Adhithya C.V., IAS, Managing Director of NSHIP-AP, signed for the state-backed special purpose vehicle.
The proposed facility will build commercial vessels such as tankers, bulk carriers, container ships and LNG carriers. It will also be designed to handle other large specialised vessels.
The MDL project forms part of Andhra Pradesh’s plan for a wider Shipbuilding-cum-Port Cluster at Dugarajapatnam.
According to the Techno-Economic Feasibility Report cited by the state, the shipbuilding and ship repair yard has an estimated cost of about ₹29,254 crore. The port component is estimated at ₹9,513 crore and is proposed to be developed by the Government of India.
NSHIP-AP was formed jointly by the Andhra Pradesh Maritime Board (APMB) and Visakhapatnam Port Authority (VPA). The two organisations hold equal shares in the special purpose vehicle. Government data on India’s greenfield shipbuilding programme lists the Dugarajapatnam site at 3,488 acres, with about 2.1 km of waterfront. The planned post-dredging depth is 13 to 15 metres.
MDL has now been selected as the anchor shipyard for the Andhra Pradesh cluster.
The scale of the site is important because large commercial ships require extensive waterfront space, heavy fabrication facilities, dry docks, storage areas and links to road, rail and other industrial services. The cluster model is intended to bring shipyards and supporting industries into the same industrial zone.
The project comes as the Union government is putting more money and policy support into domestic shipbuilding.
The Shipbuilding Development Scheme (SbDS), approved in 2025, has an outlay of ₹19,989 crore. It aims to raise India’s annual shipbuilding capacity to 4.5 million GT and supports the creation of greenfield shipbuilding clusters as well as expansion of existing yards. Greenfield clusters can receive full capital support for common maritime and internal infrastructure through Centre-State special purpose vehicles.
The government has also approved a wider ₹69,725 crore package for shipbuilding and related maritime measures. This includes the ₹24,736 crore Shipbuilding Financial Assistance Scheme and a ₹25,000 crore Maritime Development Fund. The financial assistance scheme is intended to reduce the cost disadvantage faced by Indian shipyards when competing with overseas yards.
The policy push follows concerns about India’s relatively small share of global commercial shipbuilding. Government documents have pointed to problems such as limited domestic demand, high financing costs and gaps in capacity and technology. A government-commissioned assessment also put the employment multiplier for shipbuilding at 6.4, showing why large shipyards can support jobs beyond the yards themselves.
For MDL, the Dugarajapatnam project also marks a move into much larger commercial shipbuilding.
The company is best known for naval construction, including warships and submarines. A large commercial facility would give MDL access to a different part of the shipbuilding market, where vessels such as container ships, tankers and LNG carriers are built for commercial operators.
Capt. Jagmohan said: “Dugarajapatnam offers the scale and maritime potential required for developing a globally competitive shipyard. With the support of the Government of Andhra Pradesh and NSHIP-AP, MDL intends to create a modern shipbuilding facility capable of serving both domestic and international markets. The project will also catalyse the development of a strong ancillary and marine engineering ecosystem and contribute significantly to employment generation in the State.”
The planned capacity of 1.2 million GT a year is also in line with the size being considered for India’s greenfield shipbuilding clusters. The national framework sets a broad cluster capacity of about 1.2 million GT a year, with an anchor shipyard expected to reach at least 0.5 million GT of annual design capacity within 10 years of commissioning.
The proposed investment could create demand for suppliers of steel, machinery, electrical equipment, marine systems, engineering services and other shipyard inputs. Transport, logistics, maintenance and other services may also see demand as construction and production increase.
For Andhra Pradesh, Dugarajapatnam adds another large industrial project to its coastal development plans. The state is seeking to use its long coastline and location on India’s east coast to expand maritime manufacturing.
Naidu said: “India has set an ambitious vision of becoming one of the world’s top five shipbuilding nations by 2047. Andhra Pradesh is committed to being at the forefront of this journey by leveraging its long coastline, strategic location and industrial ecosystem. The development of the shipbuilding cluster at Dugarajapatnam, with MDL as the Anchor Shipyard, will position Andhra Pradesh as a major shipbuilding hub and attract a strong ecosystem of ancillary industries and investments to the State.”
The national Maritime Amrit Kaal Vision 2047 includes shipbuilding, ship repair, skills and maritime infrastructure among its long-term priorities. The Union government has set a target of placing India among the world’s top five shipbuilding nations by 2047.
The project will also require substantial work before the planned investment becomes a working shipyard. Land, waterfront infrastructure, approvals, financing, construction and supporting facilities will have to be completed before commercial production can begin.
Jasmeet Singh Bindra, Chairperson of Visakhapatnam Port Authority, said: “As a 50% shareholder in NSHIP-AP, Visakhapatnam Port Authority is committed to the development of the shipbuilding cluster at Dugarajapatnam. VPA will facilitate coordination with the Government of India and other Central Government agencies and extend the necessary support for timely development of the cluster.”
Kona Sasidhar, IAS, Secretary, Infrastructure & Investment, Government of Andhra Pradesh, said: “The selection of MDL as the Anchor Shipyard is an important milestone in Andhra Pradesh’s maritime development. This project has the potential to create a major shipbuilding and ancillary ecosystem at Dugarajapatnam. Andhra Pradesh Maritime Board will extend the necessary facilitation for land, infrastructure and statutory clearances to enable timely development of the project.”
The signing of the MoU therefore sets out the proposed structure and investment plan. The next stage will depend on approvals, land and infrastructure work and the financing and construction required to turn the proposed Dugarajapatnam shipyard into an operating commercial facility.