With the Strait of Hormuz unstable, India strengthening its grip on the Malacca Strait with a $9.9‑billion plan to develop Great Nicobar Island in the Indian Ocean
The strategic importance of Greater Nicobar, the southernmost and largest of the Nicobar islands of India that dominate the Malacca Strait – a critical maritime chokepoint through which 60% of global trade passes – have once again come into focus due to the turmoil in the Gulf of Hormuz amid the ongoing Iran War.
Against that backdrop, the Indian government earlier this month submitted a draft master plan for developing Greater Nicobar island.
The group of Andaman and Nicobar islands (ANI), governed as a single union territory by the central government of India, covers an area of 8,249 square kilometers. The entire island chain consists of 836 islands, including islets and rocky outcrops, of which about 31 are permanently inhabited.
Located 1300 kilometers southeast of the Indian mainland, these territories are India’s premier maritime and air outpost, offering immense strategic leverage in the Indian Ocean. They act as a crucial bridge between South and Southeast Asia and as a strategic gateway for India into the Malacca Strait, which is a crucial shipping route connecting the Indian Ocean and the South China Sea.
The Nicobar islands are instrumental for India in monitoring shipping lanes and help to extend its military reach. They serve as a key bulwark of India’s Act East Policy against the growing influence of China in the region. The islands act as a permanent air and naval base, facilitating power projection and rapid military deployment in the eastern and northern Indian Ocean. They support comprehensive maritime domain awareness, and also provide a first line of defense against both traditional and non-conventional threats such as illegal fishing, drug trafficking, and piracy.
The islands provide 300,000 sq. km of additional Exclusive Economic Zone (EEZ), rich with underwater mineral and hydrocarbon resources. Sustainable power projects are designed to enhance both economic growth and strategic defense capability.
Great Nicobar Development Plan
The mega plan envisages a $9.9 billion mega-infrastructure project with proposed focus on tourism as the “primary economic driver” of growth. It is being envisioned as a “seaside destination to relax, enjoy theme parks, and wellness tourism in a pristine, unspoilt and protected environment.”
A 450 MVA gas/solar power plant, and a large township will support the population. There will be conference and convention centers. The already unfolding project includes an international container transshipment port, an airport, power plants, and a township. The plan looks to utilize island’s strategic location next to the very crucial and busy sea-lane, the Malacca Strait.
Maritime and port development will enhance connectivity through new jetties and expanding port facilities to accommodate large cargo vessels. It will give boost to tourism, entertainment, and processing clusters along the eastern coast of the island from Galathea Bay in the south to Campbell Bay in the north. Situated near the Malacca Strait, these projects aim to reduce dependence on foreign ports (like Singapore or Colombo) for container handling.
The project is expected to span 166 sq km. Of this, around 40% has been set aside as “urbanizable,” with the rest allocated to “special projects” including an airport, container port, freight and passenger terminals, defense area, and a green development area where no tree-felling will be allowed. About 129 sq. km of land is expected to come from diverted forest areas.
The project also intends to get the “population to settle here,” through both permanent and temporary jobs that will be created. The plan has been drafted for a projected population of 336,000 by 2055. Of this, the local Nicobarese population is expected to grow to about 11,500 from the current 7,500. The annual inflow of tourists to the island by that time is expected to achieve more than a million people. The development will be in phases and will finish by 2047 in line with the targets of the Narendra Modi-led government’s vision ’Viksit Bharat’ (Developed India).
Hydro Carbons Potential
The ANI Basin is a highly promising, under-explored frontier. India’s Directorate General of Hydrocarbons estimates hydrocarbon potential at 371 MMTOE (Million Metric Tons of Oil Equivalent).
Recent 2025 deep-water exploration, particularly in the Sri Vijayapuram-2 well, has confirmed significant natural gas deposits (87% methane). This region is considered a major new source which could significantly boost India’s energy security and reduce import reliance. The basin, extending over 47,000 sq. km, is part of a complex island arc system formed by the convergence of the Indian and Burmese plates.
In 2025, Oil India conducted a three-well drilling campaign that proved commercial gas potential in the Andaman shallow/deep-water, including at a depth of 295 meters.
To speed up exploring and identifying crude oil and hydrocarbon reserves in the Andaman-Nicobar basin, the Indian government has opened up previously restricted areas and is encouraging investments via the Open Acreage Licensing Program. The discovery is crucial for India’s energy transition toward cleaner fuel (methane over coal) and holds the potential to significantly enhance India’s offshore energy assets.
The Strategic Focus
The Great Nicobar project fits well into India’s Act East Policy, launched by Prime Minister Narendra Modi in 2014. It is a strategic, proactive, and dynamic shift from the 1991 Look East Policy, focusing on enhancing economic, cultural, and strategic ties with Southeast Asia and the Indo-Pacific region. The policy prioritizes regional stability and the development of India’s northeastern states bordering China, Bangladesh, and Myanmar.
While focusing on ASEAN nations, it extends cooperation to Japan, South Korea and the wider Indo-Pacific to counteract regional challenges. A major focus is integrating India’s northeastern states into the broader framework of regional trade and infrastructure, serving as a gateway to Southeast Asia. Key projects in this domain include road and rail links, maritime cooperation with Myanmar, Thailand, Cambodia, Laos, and Vietnam.
New Delhi’s transition to ‘Act East’ emphasizes rapid implementation, with a focus on maritime security and a rules-based order, particularly in partnership with Indo-Pacific powers. The policy has facilitated deeper cooperation, including the sale of BrahMos missiles to the Philippines and maritime exercises.
The Nicobar Islands therefore hold critical strategic importance for India, acting as a “geostrategic pivot” in the Indian Ocean and a vital maritime watchdog. Indira Point adjacent to the Galathea Bay, India’s southernmost point, is just 145 km north of Indonesia’s northernmost Rondo Island and 160 km from the Western Entrance of Malacca strait.
The 800-kilometer strait is crucial for global supply chains, but its narrowest point, less than three kilometers wide, makes it a risk point for piracy and maritime security, often referred to as the “Malacca Dilemma” by nations reliant on it.
The Nicobar Islands secure trade routes, enable power projection, and facilitate regional cooperation against security threats, effectively acting as India’s first line of defense against Eastern maritime threats. The islands enable the Indian Navy to monitor the crucial maritime route.
Expanding Military Assets
As the home to India’s only joint services Andaman and Nicobar Command (ANC), the islands enable enhanced, integrated surveillance, anti-submarine warfare, and rapid deployment capabilities. ANI control the “arc of power” in the Bay of Bengal, anchored by the ANC. Key assets include major naval and air bases, and missile batteries, designed to monitor maritime traffic. INS Utkrosh (Port Blair) is the primary air station for aerial operations. INS Kohassa (Diglipur) is the northern air base for surveillance. INS Baaz (Campbell Bay) is the southernmost air station overlooking the Malacca Strait. INS Jarawa (Port Blair) houses the floating dock FDN-1. INS Kardip is a strategic naval facility in the Nicobar group.
All these are being upgraded with deeper berths, airstrip lengthening and modernization, and surveillance facilities at Campbell Bay, Kamorta, and Hut Bay. The new Great Nicobar development plan will support operations of advanced surveillance aircraft and combat jets. It will allow greater time on station for surveillance aircraft (P8I and MQ-9) and shorter reaction time for fighter jets of Rafale and Su-30 MKI class. Indian Navy submarines can operate from the specialized infrastructure at Port Blair.
The ANC oversees Army infantry brigades with armored columns, Navy missile corvettes, amphibious warships, and patrol vehicles. Rutland Island is frequently used for joint amphibious assault exercises.
The existing military areas of the Indian Navy and Air Force (IAF) are being expanded to house more permanent assets. The runways at Diglipur and at Air Force Station Car Nicobar are being lengthened, and airfield assets including hardened shelters will allow sustained operations. The National Green Tribunal (NGT) has cleared the mega-infrastructure project, citing it as of ‘strategic importance’.
The Way Ahead for Mega Plan
The Great Nicobar project faced scrutiny due to significant environmental impact, large-scale forest land diversion, and potential effects on local biodiversity and tribal communities. But the strong leadership of Prime Minister Narendra Modi and a clear development strategy have allowed work to progress.
The Andaman and Nicobar Islands Integrated Development Corporation (ANIIDCO) is leading these efforts, focusing on public-private partnerships to develop international-standard tourist resorts and eco-tourism facilities. The focus remains on accelerating growth while aiming to manage the ecological sensitivities of the region.
The military airstrips in the ANC including Car Nicobar, Campbell Bay, and Diglipur have been designated for dual‑use activation to expand civilian air services across the archipelago, thus reflecting a model of symbiotic civil‑military growth. A phased transformation of the ANC into a strategic outpost would strengthen India’s image as a preferred security partner among Indian Ocean littorals. A Su-30 MKI with single air refueling will be able to reach the South China Sea when operating from Car Nicobar. Land based BrahMos missiles will also be positioned.
New Delhi’s engagement with its neighbors through the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), an international organization of seven South Asian and Southeast Asian nations, alongside provision of operational turnaround facilities to friendly navies and the undertaking of coordinated patrols (CORPATs), can further promote regional order and cooperation.
India’s development of the ANI have progressively emerged as a pillar of its maritime diplomacy in the eastern Indian Ocean Region. The strategic advantages are phenomenal. Surveillance of extra-regional warships, deep-sea fishing fleets, ‘dark shipping’, illegal activities, and research vessels along key chokepoints is essential and the ANI offer distinct advantages in facilitating this task. Similarly, the emerging hydrocarbon potential has to be exploited and secured.
ANI could become a multifunctional node for container trade, cold‑chain exports, maritime services, and digital commerce, creating steady demand for feeder services, warehousing, and skilled local employment, while deepening India’s integration with Bay of Bengal littorals and ASEAN supply chains.
The completion of the Chennai-ANI submarine cable (CANI), a 2,300 km high-speed fiber-optic link, has laid a strong foundation for sustained digital connectivity and future growth. In all this, the interests of the several tribal groups that the Andaman Islands are famous for has been looked into.
With increasing Chinese Navy presence in the Indian Ocean Region, India requires enhanced and sustained naval and air presence and stringent access monitoring at the Malacca Strait, staged through the ANI, to enable timely responses to potential military build-ups. The new infrastructure will allow it to integrate the islands more deeply into the national security architecture, and reinforce the country’s maritime posture in the Indo-Pacific.
A permanent fighter squadron must be positioned at Great Nicobar as early as possible. Lessons from recent wars also indicate the need to set up strong air defenses on the major islands with SAMs and other defenses. India must position larger numbers of air and ground launched cruise missiles.
The ANI are the most strategically located islands anywhere in the world. With focused development and military empowerment, these islands could emerge as India’s strategic fulcrum against misadventures by India’s northern neighbor. Land-based air power has its own operational advantages and lesser risks. Major infrastructure development of the ANI will tilt the strategic balance further towards India.