As Tamil Nadu fails to accelerate progress on MoU, Mazagon Dock to invest Rs 29,000 crore in Andhra: Read how NDA govt under Chandrababu Naidu has been a major industry magnet

In recent years, Andhra Pradesh has emerged as an investment magnet, attracting foreign and local companies alike. The momentum is set to continue with Mazagon Dock Limited (MDL), the state-owned shipbuilding company is planning to invest over Rs 29,000 crore in Andhra Pradesh’s proposed mega shipbuilding cluster at Dugarajapatnam in the Tirupati district. The leading defence PSU is poised to become the anchor investor in Andhra Pradesh’s shipbuilding project, which has a target of 1.2 million tonnes annual capacity. In this mega project, the state and Vishakhapatnam Port Authority will contribute Rs 5,289 crore for land and marine infrastructure, while the expected anchor investor, MDL, will pour in Rs 23, 964 crore. The Mazagon Dock Limited representatives are likely to visit the site in Andhra Pradesh soon for a feasibility assessment. Lethargy of Tamil Nadu became an opportunity for Andhra Pradesh Before the reported engagement of the Andhra Pradesh government and MDL for a massive investment in the state’s proposed shipbuilding cluster, the defence PSU had signed a Memorandum of Understanding (MoU) with the now-voted-out DMK government in Tamil Nadu. In September 2025, MDL signed an MoU with the Tamil Nadu government for a greenfield shipyard with an estimated cost of Rs 15,000-18,000 crore in Thoothukudi under the Maritime Amrit Kaal Vision 2047. The DMK government, however, maintained a lethargic approach and later signed an exclusive deal with South Korea’s HD Hyundai Heavy Industries, skipping the due process with MDL. The MDL awaited Expression of Interest (EoI) from the Tamil Nadu government; however, the DMK regime neither proceeded with the further process in commencing the project, nor did it explicitly refuse the offer. The Tamil Nadu government’s action left the MDL-Thoothukudi project unresolved, and India’s premier defence PSU sidelined. The MDL alleged that the prescribed selection process was not followed by the DMK government and that Indian shipbuilding companies were not given a fair opportunity to compete. The PSU also raised questions over transparency and the way in which the Tamil Nadu government selected the anchor shipyard. With reports coming of the MDL investing big in Andhra Pradesh, many from Tamil Nadu are criticising the DMK regime for making the state lose strategic defence-related investments. Andhra Pradesh and Tamil Nadu have long competed for defence, manufacturing, and port-related investments. Both states leverage coastal locations, skilled labour and incentives to attract investments. Ruled by the Telugu Desam Party (TDP) and Bhartiya Janata Party (BJP) alliance, Andhra Pradesh has been doing high-octane “speed of doing business” marketing, highlighting land availability, policy stability, as well as Central coordination, having BJP in power in the state and in the Centre. Andhra Pradesh under Chandrababu Naidu’s NDA govt becoming an industry magnet In recent months, there have been many high-profile investor shifts from Tamil Nadu and Congress-ruled Karnataka to NDA-ruled Andhra Pradesh. In August 2025, the DMK government in Tamil Nadu announced a Rs 1,720 crore non-leather footwear plant by South Korea’s Hwaseung Footwear in Tuticorin, promising over 20,000 jobs. However, the delays and complacency on the part of the Tamil Nadu government forced Hwaseung to explore better alternatives. By November 2025, the project shifted to Kuppam in Andhra Pradesh. The South Korean conglomerate, Hwaseung, announced to set up its non-leather sports shoe manufacturing hub in the NDA-led State of Andhra Pradesh with an investment of $150 million. The state government allotted 100 acres of land to Hwaseung. Now, the project is taking shape in Kuppam, the Vidhan Sabha seat of Andhra Pradesh Chief Minister Chandrababu Naidu. In May 2026, Tamil Nadu lost out on the proposed Advanced Medium Combat Aircraft (AMCA) flight testing and integration complex defence aerospace project to Andhra Pradesh. While the Tamil Nadu government pursued this Rs 15,000 crore DRDO-linked project, it offered land and runway at Hosur, near Bengaluru’s aerospace cluster. However, Andhra Pradesh won the race by offering faster clearance and an integrated defence corridor vision. The project went to Andhra Pradesh’s Puttaparthi, and in May this year, Defence Minister Rajnath Singh and CM Naidu laid the foundation of the 600-acre facility. Allegations of favouritism by the Centre emerged; however, reports said that handing the project to Andhra Pradesh was a part of a strategy to distribute defence manufacturing capabilities across various states. While Tamil Nadu offered a 100-acre land parcel in Hosur for free, Andhra Pradesh offered a significantly larger dedicated 650-acre hub in Puttaparthi. The interstate competition, however, is not confined to Andhra Pradesh and Tamil Nadu, but also extends to Karnataka. In July 2025, the Congress government in Karnataka agreed to scrap the proposal to take over agricultural land in Devanahalli for a planned aerospace park near the Bengaluru airport due to continuous farmers’ protests for three years. The state previously proposed acquiring 1,777 acres of land in Channarayapatna and surrounding villages in Devanahalli taluk for the aerospace project. But farmers had opposed the move from day one, claiming that the soil is fertile and their sole means of livelihood. While the Congress government in Karnataka scrapped the project, Andhra Pradesh rushed to fill the void. State Human Resource Development Minister Nara Lokesh floated an open invitation and said on X, “Dear Aerospace industry, sorry to hear about this. I have a better idea for you. Why don’t you look at Andhra Pradesh instead? We have an attractive aerospace policy for you, with best-in-class incentives and over 8000 acres of ready-to-use land (just outside Bengaluru)! Hope to see you soon to talk across the table.” Clearly, the NDA government in Andhra Pradesh is not only marketing the state as a dreamland for manufacturing projects, but is also aggressively pursuing investors facing troubles in competitor states like Tamil Nadu and Andhra Pradesh. From tech, data centres. AI, and aerospace, Andhra Pradesh has grabbed investments from other states and does not shy away from boasting about the same. In 2025, Google committed a whopping $15 billion or Rs 1.25 lakh crore investment in Visakhapatnam for one of India’s largest AI and data centres. Google picking Andhra Pradesh over its competitor in the race, Karnataka, despite Bengaluru boasting of having IT strength and infrastructure, did not sit well with the Congress government in Karnataka. Karnataka IT Minister Priyank Kharge had a “spicy” exchange with Andhra Pradesh IT Minister Nara Lokesh on X. The Andhra Pradesh government secured the Google investment by offering an extensive incentive package valued at Rs 22,000 crore. This package included a 25% discount on land, a 25% discount on water tariffs, 100% free power transmission, in addition to a full reimbursement of State GST. Andhra Pradesh also snatched away Karnataka-based Sarla Aviation’s “Sky Factory“, an electric air-taxi manufacturing project worth Rs 1,300 crore, last year. The project will be developed in Andhra Pradesh’s Anantapuram district. A Karnataka-based company choosing another state for a manufacturing project over its home state was seen as a major humiliation for the Congress government in Karnataka. Notably, Andhra Pradesh’s “speed of doing business” has also affected Congress-ruled Telangana. In March 2025, Hyderabad-based Premier Energies announced that it is relocating its proposed 4 GW solar photovoltaic cell manufacturing facility worth Rs 1,700 crore, from Telangana’s Seetharampur to Andhra Pradesh’s Naidupeta. The project will generate around 3,500 jobs. Informing about securing yet another project pursued by competitor states, Andhra Pradesh IT Minister Nara Lokesh wrote on X, “AP fast-tracked 269 acres through APIIC in record time. Talks began in Oct 2024 & land allotted by Feb 2025. The parcel is backed by ports proximity and proactive incentives. This anchors AP as a leading solar manufacturing hub, strengthening industrial growth and the state economy, with capacity planned to scale to 7 GW. AP is proud to welcome India’s second-largest integrated solar cell & module manufacturer to AP – driving backward integration and green jobs for our youth.” An interesting point to note here is that Andhra Pradesh reportedly attracted nearly ₹23 lakh crore investments within two years of the NDA rule. “Along with providing welfare, development and good governance, the NDA government is developing the Visakhapatnam, Amaravati and Tirupati regions. Industries in the defence, drones, space, aerospace and electronics sectors are coming up in Rayalaseema. During the NDA regime, the State has so far attracted investments worth ₹23 lakh crore. We are providing an opportunity to generate electricity through solar rooftops on every house. Royal Enfield is setting up a motorcycle manufacturing plant at Tirupati in 18 months,” CM Naidu has said. While it is natural for other state governments to be alarmed by Andhra Pradesh’s aggressively investment attraction tactics, the NDA-ruled state wants to be as ahead as possible in contributing to India’s growth story. The Andhra Pradesh government is leveraging single-window clearances, land banks, subsidies, and central leverage to invite global and domestic companies to set up their manufacturing units in the state.