{"id":8554,"date":"2026-05-08T05:15:39","date_gmt":"2026-05-08T05:15:39","guid":{"rendered":"https:\/\/www.europesays.com\/korea\/8554\/"},"modified":"2026-05-08T05:15:39","modified_gmt":"2026-05-08T05:15:39","slug":"hyundai-to-invest-4-billion-in-giant-shipyard-in-tamil-nadu-a-game-changer-for-indian-shipbuilding-etinfra","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/korea\/8554\/","title":{"rendered":"Hyundai to Invest $4 Billion in Giant Shipyard in Tamil Nadu: A Game Changer for Indian Shipbuilding, ETInfra"},"content":{"rendered":"

\"<p>TheThe Chief Executive Officer of HD Hyundai was part of the delegation led by President Lee Jae Myung.MUMBAI: South Korea\u2019s HD Hyundai<\/a> Heavy Industries Co Ltd, the world\u2019s biggest shipbuilder, moved a step closer to setting up a giant $4 billion greenfield shipyard at Thoothukudi<\/a> in Tamil Nadu<\/a> by signing a memorandum of understanding (MoU) in New Delhi on April 20 during the state visit of Lee Jae Myung<\/a>, President of the Republic of Korea.<\/p>\n

The MoU was signed between HD Korea Shipbuilding & Offshore Engineering Co., Ltd (HD KSOE), the holding company of HD Hyundai<\/a> Heavy Industries, the National Shipbuilding & Heavy Industries Park, Tamil Nadu<\/a> (NSHIP, TN) and the Maritime Development Fund represented by Sagarmala Finance Corporation Ltd<\/a> as India<\/a> takes the first decisive steps to achieve its ambition of becoming the world\u2019s top ten shipbuilder by 2030 and top 5 by 2047.<\/p>\n

With this, Hyundai is on course to become the first foreign shipbuilder to erect a yard in India<\/a> on the back of the \u20b969,725 crore package approved by the Union Cabinet<\/a> last year to crank up the local shipbuilding industry.<\/p>\n

The Chief Executive Officer of HD Hyundai was part of the delegation led by President Lee Jae Myung<\/a>.<\/p>\n

An official announcement from the government on the MoU, though, was muted with a Press Information Bureau statement on April 20 referring to the project\u2019s location in \u201csouthern India\u201d and not specifically Tamil Nadu in view of the prevailing Model Code of Conduct as the state votes to elect a new government on April 23.<\/p>\n

The PIB statement also omitted mentioning the State Industries Promotion Corporation of Tamil Nadu Ltd (SIPCOT) and identified it as the \u201cshipbuilding cluster developer and facilitator\u201d to avoid flouting the Model Code of Conduct.<\/p>\n

The National Shipbuilding & Heavy Industries Park, Tamil Nadu (NSHIP, TN), is an equal joint venture formed between Union government owned VO Chidambaranar Port Authority<\/a> and SIPCOT to develop a mega shipbuilding cluster at Thoothukudi<\/a>. HD Hyundai will be the anchor shipyard in this greenfield shipbuilding cluster, one of the four planned by the Union government across India.<\/p>\n

The non-binding MoU is for joint development, financing, implementation and operation of a large greenfield shipyard in southern India. \u201cThey hoped for early implementation of the project,\u201d the PIB said.<\/p>\n

Government sources said that the National Shipbuilding Mission (NSbM) has granted in-principle approval for the shipbuilding cluster in Thoothukudi.<\/p>\n

The NSbM is the nodal coordinating agency for the shipbuilding sector in India, constituted under the Shipbuilding Financial Assistance Scheme<\/a> (SBFAS) by the Ministry of Ports, Shipping and Waterways and is responsible for comprehensive policy oversight, monitoring and sanctioning of capital assistance for \u2018Greenfield Shipbuilding Cluster Development under the Shipbuilding Development Scheme<\/a> (SbDS)\u2019.<\/p>\n

The in-principle approval from NSbM allows greenfield shipbuilding cluster Special Purpose Vehicles such as the NSHIP, TN to proceed with other preparatory works required to seek final approval for the project.<\/p>\n

The selection of anchor shipyard is the responsibility of NSHIP, TN, the SPV, and the greenfield shipyard cluster development will gain steam only after the anchor shipyard is onboarded, sources said.<\/p>\n

\u201cThe investment and activities of the greenfield shipbuilding cluster development will be the responsibility of the anchor shipyard,\u201d the source said.<\/p>\n

Govt’s push to shipbuilding in India <\/p>\n

India pitched opportunities to set up large-scale greenfield shipbuilding clusters in the country and the incentives available under the Government of India\u2019s Shipbuilding Development Scheme<\/a> as well as incentives provided by relevant state governments and Indian financial institutions to the Korean delegation.<\/p>\n

\u201cThe Indian side invited leading shipbuilders from the ROK as technical and strategic anchors for these clusters through active involvement in design, production engineering, advanced manufacturing, quality and safety frameworks and operation. The ROK side expressed expectation for the advancement of cooperation based on the participation of the business sector,\u201d the PIB statement said.<\/p>\n

India had announced plans to acquire some 400 ships by public agencies alone with an investment of \u20b92.2 lakh crore ($25 billion) during the India Maritime Week 2025.<\/p>\n

Taking note of the Government of India\u2019s production-based financial support to local manufacturing, the two sides supported the cooperation of relevant industries from India and the ROK to establish an effective cooperation mechanism to channel this demand into bilateral partnerships, enhancing sustainable and resilient shipbuilding industry.<\/p>\n

In recognition of the financial assistance provided by the Government of India for shipyards undertaking brownfield capacity expansion, the two sides supported the collaboration between Indian and ROK businesses to upgrade existing Indian shipyards, including on a Block Fabrication Facility being built in southern India (read Kochi, Kerala) to support a new dry dock to construct large and specialized vessels.<\/p>\n

SIPCOT may take a 10-12 per cent stake in the greenfield shipyard at Thoothukudi, equivalent to the value of the land and the infrastructure that the state government is providing based on valuation, while the MDF will likely pick 20-25 per cent equity.<\/p>\n

\u201cHD Hyundai will hold the majority stake in the anchor yard. It practically wants to go solo,\u201d the government source told ET Infra earlier.<\/p>\n

\u201cOn the overall package, the Union government is giving 10-12 per cent of the project cost towards infrastructure creation through the Shipbuilding Development Scheme. The T N government is giving an industrial subsidy of 25 per cent on the capex cost to the new shipyard. The state government will also contribute a further 10-12 per cent of the project cost for land and other infrastructure. So, it comes to 45-47 per cent subsidy on the project cost. Plus, whatever is produced, the Union government will give 15-25 per cent as shipbuilding subsidy or production linked incentive. Together, the economics will work out,\u201d the government source said.<\/p>\n

The Thoothukudi shipyard project is estimated to cost some $4 billion while the infrastructure for the cluster such as breakwater, dredging etc will cost another \u20b94,000 crore.<\/p>\n

Besides taking on the mantle of the anchor shipyard in the Thoothukudi shipbuilding cluster, HD Hyundai is also planning to bring its entire shipbuilding vendor eco system there.<\/p>\n

During the 20 April meeting, the two sides acknowledged that the policy and fiscal support from the Government of India for shipbuilding would generate additional demand for components used in shipbuilding and ancillary industries, providing specialized Korean shipbuilding component manufacturers an attractive market to expand their business through local production. To facilitate this, the Korea Marine Equipment Association (KOMEA) has opened an office in Mumbai while the Korea Marine Equipment Research Institute (KOMERI) has evinced interest in related cooperation.<\/p>\n

The two sides also agreed to cooperate on skill training in the shipbuilding sector in India through a project to be implemented by Korea International Cooperation Agency (KOICA) in partnership with the Ministry of Ports, Shipping and Waterways. They noted that this project will contribute to capacity building needed for India\u2019s shipbuilding goals through development cooperation and public-private partnership between the two countries.<\/p>\n

HD Hyundai is also looking to set up a maritime crane manufacturing unit in the Thoothukudi shipbuilding cluster. The South Korean shipbuilder has already signed a MoU in December 2025 with state-owned BEML Ltd to collaborate on making maritime cranes.\n <\/p>\n

Published On Apr 23, 2026 at 08:19 AM IST<\/p>\n

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