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Indian Island Development
April 04, 2019

The 1382 offshore-identified islands of India hold immense unexploited potential for fostering growth and achieving cohesive socio-economic development of the region in particular and also, the nation as a whole. They can significantly contribute to the GDP by leveraging the gains from promoting infrastructure and tourism on a large scale.  

However, care must be taken to safeguard and maintain the position of these islands as vital strategic assets for national security while keeping their nature and composition as biodiversity hotspots intact. 

Because of the strategic location of Andaman and Nicobar (A&N Islands) and the Lakshadweep Islands and China’s belligerent expansionist policy in the Indian Ocean Region (IOR), not only is there a need to develop critical infrastructure and upgrade the military base in these regions, but also to harness the multiplier effect generated as infrastructure connectivity strengthens. This in turn, is expected to boost tourism and spruce up economic activity in the region.


Of late, the Islands have garnered special attention in the wake of the rising maritime territorial tensions at the international front. India’s only tri-service command is established at the Andaman and Nicobar Islands at the entrance of the Malacca Strait, the 2.8 km long -world’s most congested choke point, and the primary route for Chinese oil supply. However, with the recent Indo-Japanese initiative to expand civilian infrastructure in its vicinity, China has started exploring alternative land routes to the Middle East for oil, most notably, through the China Pakistan Economic Corridor (CPEC).

Sino India

Emerging Sino-Indian competition in the region can be seen through the routine deployment of submarines by China, development of underwater surveillance networks, expansion of Chinese naval bases with the establishment of a military base in Djibouti and extending the reach of the One Belt One Road (OBOR) mega-initiative as India joins hands with Japan, Australia and the US in the Malabar Naval Exercises. This sentiment is mirrored in the recent formation of the ‘Quad’ coalition group by the same nations. The Doklam standoff and the recent Chinese policy of forming strategic/ critical commercial alliances with India’s neighbouring countries as the United States displays a clear proclivity towards India, makes fast-paced Island development all the more imperative. 

Immense Potential

The Islands host an unexplored Exclusive Economic Zone (EEZ) with clearly demarcated boundaries that can be capitalized on in numerous ways; the varied ecosystem can be exploited for its medicinal plants and exotic plant species, sustainable agriculture and horticulture practices conducive to the agro-climatic conditions of the regions can be propagated, large-scale hydrocarbon explorations can be undertaken, and alternate renewable energy resources can be exploited so as to meet the energy needs of the nation.

Additionally, rainwater harvesting can be popularized so as to both conserve water and also narrow the critical water infrastructure deficit in the region due to scarcity of resources and inefficient management. Fisheries, the mainstay of the larger populace of these regions, can be given a thrust so as to develop modernized and sustainable inland fisheries and aquaculture ecosystem integrated with the ‘Blue Economy’ vision. Most importantly, the Islands can be developed as prime Tourist Hotspots for not just the country, but also internationally. The pristine beaches, coupled with rich tropical vegetation, can be turned into a more economical and attractive alternative to conventional destinations such as Bali and Maldives, thereby creating many forward and backward linkages and help boost the economy of the regions to a large extent.

Government Policy

The A&N Islands alone account for 30% of India’s EEZ-revenue. Given their unrealized potential, bridging the infrastructure gap becomes the next crucial step. Historically, Ship Building and Ship Repairing have been the high priority areas for infrastructure initiatives in the islands. However, acknowledging the urgency and potency of the pending development in these regions, the government in 2016, identified 26 Islands for promoting and implementing development based on sustainable approach to building a thriving economy of the project islands. Moreover, considering the unique maritime and territorial bio-diversity of the islands, the government has identified enhanced connectivity as one of the key priorities. 

In 2017, the Island Development Agency (IDA) was established for the holistic development of the islands, focusing on community-based tourism. Key Infrastructure project are being accorded priority accordingly,   such as

  • creation of jetties/berthing facilities,
  • Roll-on/Roll-off ships;
  • Bridges on Andaman Trunk Road;
  • Upgradation of Diglipur Airport;
  • Construction of Minicoy Airport;
  • Modernization of existing Jetty at Kavarati;
  • Augmentation of Satellite Bandwidth from 1.118 Gbps to 2.118 Gbps in Andaman & Nicobar;
  • augmentation of helicopter services for Islanders and tourists etc.

With better communication services, Information Technology based and other Micro, Small and Medium Enterprises (MSME) would be promoted in the Islands. Further, after carrying out systematic study, 18 Projects, both in Andaman & Nicobar and Lakshadweep, have been identified for implementation, out of which 7 Projects are ready for launch through Public-Private Partnership.

 The ten islands chosen from a total of 1382 mapped by the government, include Smith, Ross, Aves, Long and Little Andaman in Andaman and Nicobar and Minicoy, Bangaram, Suheli, Cherium and Tinnakara in Lakshadweep. These islands will be divided and developed in three packages 

Moreover, international collaborations can also be banked on for the same. The 2016 Indo-Japan Joint Statement on Bilateral Cooperation envisioned to develop “Smart Islands” on the line of the ‘Smart Cities’ project. Japanese capital and expertise can be both pioneering as well as beneficial to this endeavor. The development of the Reunion Islands by France can be a guiding example and also opens up the opportunity for prospective collaboration with Paris in implementation of such projects. The positive response by OECD countries in taking on ‘Smart Cities’ projects further demands similar international cooperation.

Private Participation

 Collaboration is indeed, the need of the hour in this regard as provision of a robust regulatory environment by the government is needed so as to not encroach upon the natural and socio-economic rights of the Particularly Vulnerable Tribal Groups (PTVG) and also preserve the ecological balance of the region, while facilitating better connectivity and maritime security infrastructure. Moreover, the high financial costs entailed in such investments create a need for private sector involvement, where their operational and managerial expertise is required so as to optimally deliver on these projects. Similarly, International best practices can be modified suitably and replicated so as to maximize returns further.

Case Study

Andaman and Nicobar Islands are of maritime importance to India with its potential for trade and surveillance. It is also a vital military base housing the country’s only tri-service command.

One of the key projects planned is a transshipment terminal at Campbell Bay at Great Nicobar, the largest of the Nicobar islands. Campbell Bay is 90km away from Malacca Strait, the principal sea route between the South China Sea and the Indian Ocean.

China, which is dependent on Malacca Strait to ship oil from West Asia, is pursuing an alternative route under its controversial China-Pakistan Economic Corridor project that India is opposed to as it passes through parts of Pakistan-occupied Kashmir.

A large port facility at Campbell Bay could offer a better opportunity for India to trade with the Association of Southeast Asian Nations (ASEAN) region, which is in the vicinity. The project may also have a strategic dimension considering the way China is influencing the dynamics around the region.

The transshipment terminal is among 10 projects identified by the government as part of its island development plan prepared by federal policy think tank NITI Aayog. The projects are in the areas of road, sea and air connectivity, clean energy, development of resorts, digital connectivity, healthcare and education, for which expressions of interest will be invited.

The plan also proposes to extend benefits available to businesses in the north-eastern region under a scheme notified in April this year. These include subsidy on capital investment and interest on working capital loans, reimbursement of insurance premium for plant and machinery, and reimbursement of the central government’s share of the goods and services tax. The fiscal benefits plan, however, needs to be approved by the government.

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