HD Hyundai moves forward with shipyard plans in Tamil Nadu, eyeing India’s maritime market

South Korean conglomerate HD Hyundai is advancing plans to establish a major shipyard in India, partnering with the Tamil Nadu state government . The company signed an exclusive agreement on Sunday in Madurai to explore the construction of the new facility, marking a major step in India’s ambition to become a global shipbuilding hub .

The project is reported to be worth around USD 2 billion , though Hyundai has said the exact scale and investment method are still under review. India aims to expand its existing shipyards and develop new ones to become the world’s fifth-largest shipbuilding nation . Currently, India accounts for less than 0.1% of global shipbuilding output , far behind leaders like China, South Korea, and Japan .

HD Hyundai highlighted Thoothukudi in Tamil Nadu as the preferred site due to its deep-water port , favorable climate, and rainfall similar to Ulsan , South Korea—the home of Hyundai’s main shipyard. The location also offers proximity to international shipping lanes and benefits from planned upgrades to port infrastructure , making it strategically suitable for large-scale shipbuilding.

The choice of Tamil Nadu over other states like Gujarat or Andhra Pradesh is influenced by several factors: advanced port facilities, industrial ecosystem, skilled workforce, government support, and year-round operational climate . While Gujarat and Andhra Pradesh have potential, Tamil Nadu offers the best combination of infrastructure and logistics for Hyundai’s operations.

In addition to the shipyard plans, Hyundai has signed agreements with BEML Ltd , a state-owned defense company, to collaborate on crane manufacturing , and with Cochin Shipyard for long-term cooperation, including naval vessels . These partnerships form part of Hyundai’s strategy to enter both commercial and defense shipbuilding markets in India.

For Hyundai, the India shipyard strengthens its global strategy by diversifying production, reducing reliance on South Korea, and providing cost advantages . Lower labor and operational costs, coupled with favorable climate conditions, will allow Hyundai to produce vessels competitively for domestic and global markets. Collaborations with Indian companies also enable technology transfer, innovation, and access to naval and offshore projects .

For Tamil Nadu and India, the benefits are significant. The project is expected to generate thousands of direct and indirect jobs , boost local supply chains, enhance maritime infrastructure , and attract USD 2 billion in investment . It will also help India move closer to becoming a top-five global shipbuilding nation and strengthen its naval and offshore capabilities .

India currently imports a significant portion of ships and maritime equipment , with estimates ranging from USD 3-4.5 billion annually . A large domestic shipyard would reduce dependence on imports, save foreign exchange , and address strategic maritime needs, while also creating a competitive domestic industry .

Large shipyard projects typically take 3-5 years from planning to full operation. If all goes according to schedule, the Tamil Nadu shipyard could become functional around 2030 . Globally, Hyundai’s entry into India may lead to cost-competitive ship production , influence global pricing, and attract other foreign players. Domestic shipyards may face increased competition, but could also benefit from technology and skill transfers .

“India is a market with strong government commitment to developing its shipbuilding industry and holds high growth potential,” said an HD Hyundai official. “We will continue to expand cooperation with India in shipbuilding and offshore sectors to secure new growth engines.”