Prospects for Real Estate in Andaman and Nicobar Islands

Andaman and Nicobar Islands (ANI) are catching the fancy of foreign tourists as a fun destination. The first foreign direct investment in the Andaman and Nicobar Islands combining the islands in a package tour with Phuket, Thailand has shown a spurt in tourist activity here.

Shedding its image as a penal settlement, ANI was incorporated into the Indian Union as a Union Territory in November 1956. The 10 degree latitude separates the 2 groups of islands, the Andamans and the Nicobar, in the Bay of Bengal. Only 36 of the 349 islands are inhabited by the Onges and Shompen tribes, and migrants from West Bengal, Tamil Nadu, Andhra Pradesh and Kerala, totaling 356,265 persons as per the 2001 census.

Port Blair, the capital of the islands is connected to Chennai and Kolkata by air and sea. For inter-island connectivity helicopter services are available on some of the islands and the existing infrastructure includes helipads at Port Blair, Rangat, Mayabunder, Diglipur, Car Nicobar, Neil Island, Havelock, Campbell Bay and Nancowry. Expansion of helicopter services to Baratang, Long Islands, and other inhabited islands has been under active consideration.

There are 23 notified ports along the coastlines, strategically located on 3 major international shipping routes.

As the local administration pushes for development, it strives to preserve the frail ecosystem through its “high value, low volume” policy. For investors in the tourism pact with Thailand the challenge is to preserve the beaches and coral reefs along the 1962 km long coastline without the risk of pollution.

Although smallest among the states and UTs in terms of population, ANI has enjoyed a higher per capita income than the national average. However, stagnation in per capita income has narrowed down the difference since 1993-94

There are about 1500 small scale & tiny industries in ANI which are mainly timber & agro based. The sea can be more optimally exploited for hidden marine resources, without disturbing the eco-system.

Real Estate Development in Andaman and Nicobar Islands

Map of Andaman and Nicobar Island
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The islands have generated a fair amount of business from tourism, though better connectivity and infrastructure would propel the industry further. The fragile ecology, however, does not lend itself to “high value” commercial projects, and any venture must be in sync with the environment.

The islands offer rental properties that can be let out to tourists on vacation. Neil island, 35 km by sea from Port Blair is popular for its beaches and water sports. The Government has allotted 9.2 hectares for development of eco-tourism here. The Andaman and Nicobar administration has identified four potential circuits, which can be promoted for eco-tourism— South Andamans, Baratang, Ritchie’s Archipelago and Long Island. The private sector is keen to invest on the islands given the vast tourism potential and the Lt. Governor had announced in 2005 that certain areas would be reserved for them.

Studies for low cost housing, energy efficient housing, and earthquake resistant housing have been conducted by various agencies like Laurie Bakers, Cost Fort Group, and Space Design Consultants. There is a need to popularize and promote locally available building materials in construction activity such as; timber, rocks and sand stones, cement or polymer composite sheets or boards made from coir fibre and particle boards in view of high seismic activity on the 10 degree latitude

Improved infrastructure with private sector participation, developing technical and vocational skills in the labour force and utilizing local resources to the optimum would give the local economy the much required push. The administration is working towards the declaration of the islands as a special tourism zone and looking to amend the coastal regulatory laws that come in the way of “development”.