AP woos Hyundai with readymade Kakinada port

Andhra Pradesh is trying to woo HD Hyundai Heavy Industries Co Ltd with readymade Kakinada port to set up a greenfield shipbuilding cluster with a proposed investment of $4 billion.

On December 7, 2025, HD Hyundai Heavy Industries signed a memorandum of understanding with the Tamil Nadu government to set up a shipbuilding cluster at Thoothukudi. This was one of the last and biggest (in terms of investment size) MoUs signed by the previous DMK government. It was also one of the first projects proposed under the Centre’s Rs 69,725-crore Shipbuilding Financial Assistance Scheme, which was approved in September 2025.

According to sources, the Andhra Pradesh government has now made a pitch to HD Hyundai Heavy Industries to set up the shipyard cluster near Kakinada port.


“The state government has put Kakinada gateway port and industrial city at the centre of its pitch to the company. The Kakinada Special Economic Zone or Auro Industrial city ecosystem is also ready to use,” said a person who did not wish to be identified. “In fact, it is plug and play since red category environmental clearance is also ready.”

The state government’s direct pitch follows state IT minister Nara Lokesh’s meeting with executives of HD Hyundai Heavy Industries in Seoul in June.

A perusal of the MoU shows that the exclusivity clause is binding on the Tamil Nadu government but not on the company. “This means that the company can exit the MoU but not the government,” a source told ET.

Clause 3, which is “exclusivity in relation to the greenfield shipyard”, reads, “In this regard, GoTN, acting through Guidance, hereby undertakes and agrees that, during the exclusivity period (as defined below), it shall not, directly or indirectly, initiate, solicit, entertain, engage in, pursue or participate in any form of cooperation of any kind (including without limitation, entering into any MoU, letter of intent, framework agreement or similar cooperation arrangement) in relation to a greenfield shipyard project in Tamil Nadu that is substantially similar to the project, with any shipbuilding or offshore engineering company whose principal place of business is outside India, other than M/s HDKSOE, without the prior consent of M/s HDKSOE.”

The project is crucial for Tamil Nadu as the new TVK government is already under intense political scrutiny. While chief minister C Joseph Vijay has gone out of his way to assure investors over continuity in policy, companies are being actively wooed by neighbouring Andhra Pradesh, Karnataka and Telangana.