HD Hyundai, South Korea’s largest shipbuilding group, plans to introduce its entire shipbuilding supply chain to Thoothukudi—a major port and industrial city in the southern Indian state of Tamil Nadu—with partners including the South Korean steel giant POSCO.
According to India’s Economic Times, HD Korea Shipbuilding & Offshore Engineering (HD KSOE), a subsidiary of HD Hyundai, is finalizing an investment plan to independently build a new shipyard in the Thoothukudi area, with an expected annual production capacity of 3.5 to 4 million gross tons.
The shipyard project in the Thoothukudi region is expected to cost approximately $4 billion, while infrastructure for the industrial cluster—including breakwaters and dredging—will require an additional 40 billion rupees.
The report cited sources familiar with the matter as saying: “ “The Indian government had originally planned to establish three to four shipbuilding bases in Tamil Nadu, Andhra Pradesh, Gujarat, Maharashtra, or Odisha, with a combined annual production capacity of approximately 4 million to 4.5 million gross tons. However, HD KSOE alone could achieve a maximum capacity of 4 million gross tons with just one of the planned shipyards, demonstrating an exceptionally large scale of shipbuilding operations.”
As early as December 7, 2025, HD Hyundai signed an “Exclusive Business Cooperation Agreement on the Construction of a New Shipyard” with the Government of Tamil Nadu; however, the scale of investment and the specific investment structure have yet to be determined. It should be clarified that the new shipyard project in Thoothukudi is not the same as the ship section manufacturing plant that HD Hyundai and Cochin Shipyard of India plan to establish as a joint venture.
The source revealed: “HD Hyundai has pledged to build a brand-new shipyard in the Thoothukudi area with virtually complete autonomy. The Indian Maritime Development Fund (MDF), which aims to provide long-term financing for the shipbuilding and ship repair industries, may participate in the partnership… A team from India has already visited South Korea and is scheduled to return this month. Currently, a technical team of up to 20 people from HD Hyundai has been stationed in the Thoothukudi area.”
Separately, a source from the Indian government revealed, “The Tamil Nadu Industrial Development Corporation (SIPCOT) is likely to hold a 10%-12% stake in the newly-built shipyard, which is equivalent to the value of the land and infrastructure provided by the state government based on valuation. The Indian Maritime Development Fund is expected to take a 20%-25% stake. HD Hyundai will hold a controlling stake, and will essentially be the sole investor leading the project.”
Sources further stated: “As part of the overall plan, the Indian government will provide funding equivalent to 10%–12% of the project cost for infrastructure development at new shipyards through the Shipbuilding Development Scheme. The Tamil Nadu government will offer an industrial subsidy covering 25% of the capital expenditure costs for new shipyards, while also covering an additional 10%–12% of the project cost for land and supporting facilities. Consequently, the total cost subsidy for the new shipyard project will reach 45%–47%. Additionally, the Indian government will provide a 15%–25% shipbuilding subsidy or Production-Linked Incentive (PLI) for vessels delivered upon the shipyard’s completion… Overall, the proposed shipyard project by HD Hyundai is economically viable.”
It is worth noting that, in addition to the main shipyard located in the Thoothukudi area, HD Hyundai also plans to bring a complete shipbuilding support industry chain to the region.
According to information disclosed by Indian media, the shipbuilding industrial cluster in the Thoothukudi region covers approximately 3,000 acres and has reserved space for supporting shipbuilding enterprises. Currently, HD Hyundai has submitted a list of companies interested in establishing factories in the area to the Tamil Nadu state government. The state government will engage with these companies by offering incentives for factory construction. For example, POSCO is in discussions with the Tamil Nadu state government to explore whether favorable policy packages can be provided to facilitate the construction of a steel plant in the region.
In addition, HD Hyundai plans to establish a marine crane manufacturing base within the Thoothukudi shipbuilding cluster. In December 2025, HD Hyundai signed a Memorandum of Understanding (MOU) on Expanding Cooperation in the Crane Business with BEML, a state-owned enterprise under the Indian Ministry of Defense. The two parties will collaborate across the entire crane manufacturing process—including design, production, and quality verification—and plan to supply various types of lifting equipment, including giant cranes and container cranes, to Indian shipyards in the future.
The Indian government is committed to enhancing its global standing in the shipbuilding industry, and HD Hyundai’s expansion comes at just the right time. Currently, India holds less than 1% of the global shipbuilding market, but its goal is to rank among the top ten globally by 2030 and among the top five by 2047.