Mazagon Dock to Build ₹15,000-Crore Merchant Shipyard in Andhra Pradesh

Mazagon Dock Shipbuilders Limited (MDL) has signed a Memorandum of Understanding to develop a greenfield shipyard at Dugarajapatnam in Andhra Pradesh, marking the state-owned firm's strategic entry into merchant shipbuilding. The project, which involves an investment of ₹15,000 crore over the next five to seven years, is expected to generate approximately 45,000 direct and indirect jobs. The agreement was formalized on September 18, 2026, in the presence of Andhra Pradesh Chief Minister N. Chandrababu Naidu.

The proposed facility is designed with an initial capacity to produce 1.2 million gross tonnes of merchant vessels annually. The shipyard will focus on the construction of commercial vessels, including tankers, bulk carriers, container ships, and LNG carriers. This development is part of a broader greenfield shipbuilding and port cluster initiative at Dugarajapatnam, which is being advanced under the central government's shipbuilding development scheme.

According to state government documentation, the Dugarajapatnam site spans 3,488 acres and features approximately 2.1 kilometers of waterfront. The project is being facilitated by the National Shipbuilding and Heavy Industries Park-Andhra Pradesh (NSHIP-AP), a special purpose vehicle jointly owned by the Andhra Pradesh Maritime Board and the Visakhapatnam Port Authority. While the shipbuilding yard is estimated at ₹15,000 crore, state techno-economic feasibility reports suggest the total integrated shipbuilding and ship-repair infrastructure could reach ₹29,254 crore, with a separate port component estimated at ₹9,513 crore.

This move represents a significant diversification for MDL, a Navratna company traditionally focused on defense shipbuilding. The project follows a previous attempt by MDL to establish a presence on the eastern coast in Thoothukudi, Tamil Nadu. In that instance, MDL signed an MoU in September 2025, but the Tamil Nadu cluster ultimately selected HD Korea Shipbuilding and Offshore Engineering as its anchor partner.

The central government's current framework for the sector aims to establish one greenfield shipbuilding cluster per state. Andhra Pradesh and Tamil Nadu are among the five states that have received in-principle approval for such clusters. The Dugarajapatnam project is now positioned as a key component of Andhra Pradesh's industrial expansion, with the state government actively coordinating with central authorities to finalize the development timeline.