Andhra Pradesh charts course for shipbuilding growth as Garuda Aerospace commits ₹250 Cr investment

VISAKHAPATNAM : Andhra Pradesh is positioning itself as a key hub for shipbuilding and shipbreaking, with the state government in active discussions with the Union Ministry of Ports, Shipping and Waterways to establish a mega shipbuilding cluster.

Responding to questions in the Assembly from MLAs Nadukuditi Eswara Rao and Kamineni Srinivas on Thursday, State Investments and Infrastructure Minister B.C. Janardhan Reddy announced that the government has rolled out the AP Maritime Policy to accelerate shipbuilding and allied industries. The policy offers a wide range of fiscal incentives aimed at attracting investments, fostering industrial growth, and creating employment opportunities in the maritime sector.

The state’s move comes at a time when India is seeking to strengthen its shipbuilding capacity and reduce reliance on foreign-built vessels, positioning Andhra Pradesh as a potential hub for both domestic and international players.

The policy provides up to 25% capital subsidy on investments, 10-year SGST reimbursements, an additional 20% SGST reimbursement for the first five ships built, and production-linked incentives covering up to 25% of costs. Exemptions on stamp duty, electricity duty, and subsidies on utilities are also being offered, along with long-term land leases via the AP Maritime Board and single-window clearances.

To encourage innovation and sustainability, the government has announced 75% reimbursement on feasibility study costs and 100% reimbursement for environmentally friendly ship technologies.

The Centre, meanwhile, is developing a shipbuilding cluster at Dugarajapatnam in Tirupati district, with modalities for a Special Purpose Vehicle (SPV) between the Centre and state currently being finalized. Once operational, the industry is expected to create nearly 1.48 lakh direct and indirect jobs in Andhra Pradesh.

In a parallel boost to industrial growth, Chennai-based Garuda Aerospace has proposed a ₹250 crore investment to set up a large-scale drone manufacturing unit in the state. Company representative Shyam Kumar met Minister Janardhan Reddy at the Secretariat to outline the expansion plans.

Welcoming the proposal, the minister said Andhra Pradesh is fast emerging as a preferred investment destination and expressed confidence that ventures like Garuda’s will generate employment and livelihood opportunities for the state’s youth.