Tata seeks nod for $1 billion shipyard in Kerala

Tata Group has sought approval to invest ₹10,000 crore, or about $1 billion, in a shipbuilding project in Kerala, state chief minister V.D. Satheesan told Bloomberg.

“Tata is ready to invest on shipbuilding,” Satheesan said in an interview in Thiruvananthapuram. “We are going to provide the land.”

The state government is favorably considering the proposal and could approve it within a month, he said. Details including the proposed location, the vessels to be built and the Tata company that would execute the project have not been disclosed.

The plan remains subject to government approval and Tata Group has not publicly announced a final investment decision.

If it proceeds, the project would mark a significant expansion by India’s largest conglomerate into commercial shipbuilding and give Kerala one of its biggest industrial investments.

The proposal comes as India seeks to reduce its reliance on foreign shipyards and increase its small share of the global vessel-construction market.

The central government approved a shipbuilding package of about ₹70,000 crore last year, including financial assistance for shipyards, credit support and funding to expand existing facilities.

The Shipbuilding Financial Assistance Scheme has been extended until March 2036 with an allocation of ₹24,736 crore. The package also includes a ₹25,000 crore Maritime Development Fund intended to attract long-term capital into ports, shipyards, shipping companies and other maritime infrastructure.

The government is also establishing a National Shipbuilding Mission to coordinate policies and projects across the industry.

India handles about 95% of its overseas trade by volume through maritime routes but owns and builds only a limited proportion of the ships used to carry that cargo. New Delhi wants more vessels to be constructed, financed and registered domestically.

Kerala is well placed to attract shipbuilding investment because of its long coastline, established maritime workforce, and proximity to major international shipping routes.

The state is home to Cochin Shipyard Ltd, one of India’s largest shipbuilders and repair companies.

The state and central governments have also examined potential sites for additional shipbuilding and repair facilities, including locations near the deepwater port at Vizhinjam.

Vizhinjam lies close to the main east-west shipping route connecting Europe and the Middle East with Asia. Its natural depth allows it to handle large vessels with relatively limited dredging.

Satheesan did not identify whether Tata’s proposed facility would be located near Vizhinjam, Kochi or elsewhere in the state.

The proposal follows growing investment interest in Indian shipbuilding. The government has been courting shipbuilders from South Korea and other major maritime economies to establish or modernize yards in the country.

India and South Korea said in April that companies were exploring the joint development of a large greenfield shipyard in southern India. The government has also offered capital assistance for the expansion of existing shipyards and credit-risk protection for new orders.

A Tata shipyard would bring a conglomerate with interests spanning steel, engineering, automobiles, defense and information technology into a sector that requires substantial capital and a broad manufacturing supply chain.

Tata Steel could supply marine-grade steel, while other group companies have experience in engineering, defense manufacturing, electronics and large infrastructure projects. The group, however, has not disclosed how those businesses might participate in the Kerala proposal.

The investment would also provide Satheesan’s recently formed government with an early test of its efforts to attract large private-sector manufacturing projects to Kerala, a state better known for services, tourism and remittances than heavy industry.