Mazagon Dock Expands Shipyard Plans With ₹30,000 Crore

Proposed anchor yards mark a larger industrial plan

Mazagon Dock Shipbuilders Ltd has signed memorandums of understanding for proposed anchor shipyards at Dighi in Maharashtra and Dugarajapatnam in Andhra Pradesh. Each proposed facility is planned with capacity of 1.2 million gross tonnage per year and an estimated investment of about ₹15,000 crore. Together, the proposals represent about ₹30,000 crore of indicated investment, although the agreements are non-binding. The Mumbai-based public-sector company is India’s only public-sector yard that builds both destroyers and conventional submarines. It is also the sole supplier of submarines to the Indian Navy. The new cluster proposals come alongside expansion work at its existing Nhava facility and continuing naval production programmes.

Dighi proposal targets 1.2 million gross tonnage

On September 15, Mazagon Dock signed an MoU with National Shipbuilding & Heavy Industries Park Maharashtra Ltd to develop an anchor facility at the planned Dighi shipbuilding cluster. The proposed yard is designed for 1.2 million gross tonnage of annual capacity. The indicated investment is about ₹15,000 crore. NSHIPML is an equal special purpose vehicle of the Mumbai Port Authority and the Maharashtra government. Its role is to develop common infrastructure for the cluster. Mazagon Dock’s board has granted in-principle approval for management to pursue investment as an anchor yard, based on techno-economic feasibility reports prepared by the states.

Dugarajapatnam MoU outlines another large facility

On September 18, 2026, National Shipbuilding and Heavy Industries Park of Andhra Pradesh signed an MoU with Mazagon Dock for a greenfield shipyard at Dugarajapatnam Port. The facility is proposed as part of a shipbuilding-cum-port cluster. It is designed to produce 1.2 million gross tonnage annually. The yard is intended to build and repair commercial vessels including tankers, bulk carriers, container ships and LNG carriers. Mazagon Dock is expected to invest around ₹15,000 crore over five to seven years under the proposal. The project is expected to generate direct and indirect employment for around 45,000 people.

The agreements remain non-binding

The MoUs do not amount to final investment commitments. Industry sources cited in the provided reports noted that the agreements are non-binding and do not contain consideration or specific clauses governing withdrawal. Mazagon Dock is expected to look for partners because of the scale of investment involved. This is an important qualification for investors tracking the announcements. The proposed projects still require preparatory work, project-level decisions and subsequent approvals. Mazagon Dock has also confirmed that there has been no progress on the Thoothukudi shipyard project.

Government scheme sets the cluster framework

Dighi and Dugarajapatnam are among five mega greenfield shipbuilding clusters that received in-principle approval from the inter-ministerial National Shipbuilding Mission. The mission operates under the Ministry of Ports, Shipping and Waterways and coordinates policy oversight, monitoring and capital assistance for the sector. In-principle approval allows cluster special purpose vehicles to undertake preparatory work before seeking final approval. Under the framework, a greenfield cluster is intended to provide plug-and-play infrastructure for shipbuilding and repair activities. The special purpose vehicle must secure commitments from one or more anchor shipyards. At least one anchor yard must have a design capacity of at least 0.5 million gross tonnage per year, to be achieved within 10 years of commissioning.

Shipbuilding Development Scheme funding is relevant

The Union government has budgeted ₹19,989 crore for the Shipbuilding Development Scheme. This includes ₹11,728 crore for greenfield shipbuilding clusters and ₹8,261 crore for brownfield expansions. The scheme aims to develop three to four greenfield clusters, with one cluster per state. Once an anchor shipyard is selected, the facility can be funded under the scheme. The proposed role of Mazagon Dock is therefore central to the next stage of the Dighi and Dugarajapatnam projects. But funding eligibility and final project execution remain separate from the MoUs already signed.

Existing Nhava expansion supports larger vessel capability

Mazagon Dock also has expansion plans of ₹4,000 crore to ₹5,000 crore, focused on securing and executing export orders. More than ₹1,000 crore of this is planned for its 40-acre Nhava facility near Mumbai. The work includes a jetty, vessel-holding infrastructure, dredging and associated activities. The company awarded a ₹475 crore contract to Gujarat-based Shoft Shipyard to erect a floating dry dock at Nhava. Four of the six required blocks had been completed under the reported project status. The dry dock is planned to measure 180 metres in length, 44 metres in breadth and 19.5 metres in height.

Capacity additions include dry dock and new basins

The Nhava floating dry dock is expected to handle eight 12,800-tonne-class ships simultaneously. It is intended for the construction and repair of larger commercial ships as well as Next Generation Destroyers. As of July 2025, reports indicated that Mazagon Dock would reclaim 10 acres at its Mumbai facility to create two new basins. These basins are intended to allow simultaneous construction of larger ships and submarines. The overall expansion is expected to double the shipyard’s deadweight handling capacity from 40,000 tonnes to 80,000 tonnes. The Maharashtra Coastal Zone Management Authority also cleared the floating dry dock proposal, with the project assessment stating that the impact on tidal conditions and coastline would be minimal.

Submarine operations remain a core strength

Mazagon Dock has completed the Kalvari-class, or Scorpene, conventional submarine production line after delivering all six boats under Project-75. The company continues to support the fleet through refits. It has two dedicated submarine assembly lines with capacity to construct 11 submarines simultaneously, supported by a shore integration facility for system testing. The company has also signed a contract worth about ₹1,990 crore to design, build and integrate a DRDO-developed air-independent propulsion plug into Scorpene submarines. Plate cutting for this work commenced in March 2025. Delivery is due 42 months after that commencement.

Patrol vessel programme continues alongside expansion

Mazagon Dock has also commenced production activity for the first Fast Patrol Vessel under a 14-vessel project for the Indian Coast Guard. In 2026, it held the keel-laying ceremony for the fourth ship and the plate-cutting ceremony for the seventh ship in the same programme. These production milestones show that the company’s current naval and coast guard work continues while it evaluates much larger commercial shipbuilding opportunities. The proposed Dighi and Dugarajapatnam facilities would be directed at commercial vessel construction and repair, while Mazagon Dock’s existing operations retain a substantial defence focus.

Key project and capacity details

What the announcements mean for Mazagon Dock

The MoUs place Mazagon Dock at the centre of two proposed large-scale shipbuilding clusters, but they should be viewed as preliminary arrangements rather than completed investments. The company’s in-principle board approval, partner search and the need for further project approvals underline that distinction. Its ongoing Nhava works provide a more direct picture of capacity expansion already being pursued. Meanwhile, its submarine infrastructure, Project-75 record, AIP work and Fast Patrol Vessel programme preserve its role in domestic defence shipbuilding. Further developments will depend on final approvals, anchor-yard commitments, funding decisions and project execution at the two clusters.