The Andaman & Nicobar Islands, located in the Indian Ocean, are a group of 572 islands in the southeastern part of the Bay of Bengal. The islands are situated close to Indonesia and Thailand.
The presence of 23 ports and an international airport in the capital city, Port Blair, makes it well-connected with the rest of the world.
A mega International Container Transhipment Port was going to be set up at the Galathea Bay of Great Nicobar Island. The first phase is targeted for completion in 2028 at a handling capacity of 4 million Twenty-Foot Equivalent Units.
Development of a deep internal port draught and proposal to build a trans-shipment port in Great Nicobar at an estimated cost of approximately Rs. 100 billion (US$ 1.36 billion) will enable large ships, along with new employment opportunities, to anchor and increase India's share in maritime trade.
High-impact ventures are being extended across 12 Andaman & Nicobar Islands. To boost the North and Middle Andaman’s Road connectivity, two major bridges, and the NH-4 are under construction.
In Budget 2026-27, provisions worth Rs. 616.59 crore (US$ 68.48 million) were made for the shipping sector in Andaman and Nicobar Islands, including a capital outlay of Rs. 31.10 crore (US$ 3.46 million).
In Budget 2026-27, provisions worth Rs. 145.48 crore (US$ 16.16 million) were made for the medical and public health sector in Andaman and Nicobar Islands.
In Budget 2026-27, provisions worth Rs. 700.64 crore (US$ 77.85 million) were made for the power sector in Andaman and Nicobar Islands, including a capital outlay of Rs. 38.92 crore (US$ 4.33 million).
In FY26, the total merchandise exports from the union territory stood at Rs. 8.88 crore (US$ 1.04 million).
In FY26, the UT exported key items such as marine products which contributed 84.85% to the total exports in the UT.
In FY26, Andaman and Nicobar had a total installed power generation capacity of 130.78 MW, comprising 92.71 MW from thermal and 38.07 MW from renewable energy sources (RES).
From the total installed power generation capacity, the UT’s utilities sector was the largest contributor with a capacity of 62.77 MW, followed by 63.01 MW from the private sector, and 5 MW from central utilities.
In 2024, the Andaman and Nicobar Islands recorded 7,10,397 domestic and 11,497 foreign tourist arrivals, marking a 37% rise in domestic visitors. The UT witnessed a 37% rise to over 323,000 in 2023 and then doubled to 710,000 in 2024.
The following are some of the key government initiatives to promote Andaman & Nicobar as an investment destination:
- A Greenfield International Airport with a capacity of 4,000 peak hour passengers is being developed under the Great Nicobar Project to improve connectivity and tourism infrastructure in the islands. The upcoming airport is expected to initially handle around 1 million passengers annually, with future expansion potential of nearly 10 million passengers per year.
- The Great Nicobar Project includes an International Container Transshipment Terminal (ICTT) with a planned capacity of 14.2 million TEUs to strengthen India’s maritime trade and reduce dependence on foreign transshipment ports such as Colombo and Singapore.
- The Greenfield International Airport is expected to strengthen tourism potential in Great Nicobar due to its proximity to international tourist destinations such as Phuket, Langkawi and Southeast Asian maritime routes.
- In June 2025, the Airports Authority of India approved a three-year incentive scheme for Veer Savarkar International Airport in Port Blair, offering a 100% User Development Fee waiver in the first year, 85% in the second year and 65% in the third year to attract airlines and enhance international flight connectivity.
- In June 2025, India and Japan have agreed to collaborate on developing the Andaman & Nicobar Islands and Lakshadweep into “Smart Islands” featuring renewable energy, smart mobility and digital infrastructure.
- Leading hospitality firms including Indian Hotels Company Limited and Hyatt Hotels Corporation are investing about Rs. 659 crore (US$ 79 million) to develop eco-tourism resorts across Aves, Neil, Long and Smith Islands in the Andaman and Nicobar Islands under a public-private partnership model as announced in August 2025.
- The Detailed Project Report (DPR) for the Rs. 1,00,000 crore (US$ 11.56 billion) international container transhipment port at Galathea Bay on Great Nicobar Island has been finalised and is awaiting approval from the Ministry of Ports, Shipping and Waterways.
- The operations of the new terminal building of the Port Blair Airport commenced in August 2023.
- The government had invested Rs. 30,000 crore (US$ 3.64 billion) in the last eight years in the Andaman and Nicobar Islands, and Rs. 10,000 crore (US$ 1.21 billion) worth of investments are in the pipeline. The government was planning to develop a trans-shipment hub, a greenfield airport, a township, and a diesel/solar power plant as part of a mega infrastructure boost to the strategically located island chain.
- According to the Telecom Regulatory Authority of India (TRAI), Andaman and Nicobar had 0.50 million wireless subscribers and 0.04 million wireline subscribers, as of December 2025. Tele-density in the UT stood at 132.04%, as of December 2025.
- In 2022-23, the fish production in Andaman and Nicobar stood at 46.99 thousand tonnes.
- Port Blair Airport is being renovated to accommodate 1,200 passengers. In addition, the airports are ready for Diglipur, Car Nicobar and Campbell-Bay operations.
- Four ships being built at the Kochi Shipyard were likely to improve water connectivity between the islands and the mainland.
Andaman & Nicobar Islands are a strategically important Union Territory under India’s Act East Policy, serving as a key maritime and economic link with East and Southeast Asia. Ongoing investments in digital connectivity, ports, airports and renewable energy are strengthening trade, tourism and the blue economy, including fisheries, aquaculture and seaweed farming. Flagship projects such as the proposed international transshipment port at Great Nicobar, expansion of Port Blair Airport and 100% renewable energy targets are enhancing logistics and sustainability. Supported by rising tourist inflows, improving connectivity and focused PPP-led development, the islands are emerging as a critical hub for maritime trade, tourism and strategic cooperation.
