The government's case for the Great Nicobar mega-project rests on port throughput, jobs, and strategic gain. It does not count the rainforest, the Shompen, or the fault that the port will sit on. Put both columns in one ledger, and the project stops adding up, which is why the justification keeps moving.

The Andamans I have seen are the ones most Indians have seen. You fly into Port Blair and stand in the Cellular Jail reading the names of the men the British kept there, and a day later, you are on the ferry north to Swaraj Dweep, walking out onto Radhanagar beach at the hour the guidebooks recommend. It is a curated archipelago, the part of the territory the state is happy for you to know, and it ends well before the islands do. The ferry south does not carry tourists. The Nicobars are a tribal reserve, closed without a permit that ordinary visitors do not get, and on most travel maps, the chain simply trails off into blue. The southernmost inhabited island, Great Nicobar, is a place almost no citizen of the country that governs it will ever set foot on.

That is the island the government has chosen to remake. The plan, titled the Holistic Development of Great Nicobar, would build an international transhipment port, a dual-use airport, a power plant and a township for several lakh people on an island that today holds a few thousand, at a cost the official documents put somewhere between seventy two and eighty one thousand crore rupees. It is one of the largest single infrastructure undertakings the Indian state has ever attempted, and it is being built in a place that the people deciding its fate, and most of those cheering it on, will never have to look at.

This essay is about the accounting behind that decision. I want to take the government's own ledger, the one that totals up the port's throughput and the jobs and the strategic value, and set beside it the costs the ledger leaves out: the rainforest, the carbon, the leatherback turtles, the few hundred Shompen who have lived on the island for millennia, and the fault line that runs beneath the bay where the port is to go. Put as a development economist rather than as an activist, my point goes beyond the size of the costs, large as they are. The appraisal has been built so that it can never be shown to fail. It enters the benefits at market prices and the costs at zero, keeping the forest and the Shompen off the balance sheet entirely, and when one column is challenged, it shifts the argument to another. A project that is commercial when you question its ecology and strategic when you question its economics has no fixed ledger that anyone can audit. That is the design, and it is worth naming.

What the project is, and what it is meant to do

The components are large and specific. At Galathea Bay, on the island's southern tip, an International Container Transhipment Port was designated in September 2024 as India's thirteenth major port, with a natural draft of more than 20 metres, deep enough to accommodate the largest container vessels afloat. A greenfield dual-use airport, the civil-military version cleared in June 2026 at around thirteen thousand crore rupees and held under naval control. A gas and solar power plant of 450 MVA, a desalination plant, a twenty-two-kilometre expressway, and a township meant to grow the island's settled population from roughly eight thousand toward a planned six and a half lakh across three phases that run to the 2040s. The whole thing was conceived by NITI Aayog, with a pre-feasibility report by AECOM, and is run through the Andaman and Nicobar Islands Integrated Development Corporation.

The case for it has two halves. The commercial half is that India is bad at handling its own ships. The country routes about three-quarters of its transhipment cargo through foreign ports, roughly forty-five per cent of it through Colombo alone, at an estimated annual cost of two hundred to two hundred and twenty million dollars. Galathea Bay sits beside the east-west shipping trunk route, around 150 kilometres from the Strait of Malacca, and its natural depth would allow it to accommodate ships that Colombo and Singapore can only handle with constant dredging. Government projections run to around twenty-one million TEU at full build, thirty thousand crore rupees in annual revenue by 2040, and fifty thousand jobs. The strategic half is that an Indian port and airfield this far south would let the navy watch the Malacca approaches and answer China's growing presence in the ocean. The Lieutenant Governor calls it a game-changer for India's maritime trade, and the Prime Minister has described it as a project of strategic and national importance.

I will take all of that seriously, because the strongest version of the case is the one worth answering. The booster argument on the commercial side is genuinely sound on its own terms: a transhipment hub depends on its position on the shipping lanes, not on the size of the land behind it, which is why Singapore and Tanjung Pelepas thrive with almost no hinterland, and Galathea's depth and location are real advantages. That the project has benefits is undisputed. What has to be settled is whether those benefits, honestly weighed against everything the appraisal refuses to count, still leave it ahead.

Figure 1. Three quantities, each on its own scale. The claimed annual port revenue and the project's capital cost are priced; the forest area and the one-time carbon release are not. Sources: revenue and cost, NITI Aayog and Ministry and PIB figures; forest and footprint, Ministry of Environment; carbon, independent estimates reported in NewsClick.

The forest has an appraisal priced at zero

Great Nicobar is still about eighty-five per cent tropical rainforest, one of the densest and least disturbed in India, and the project diverts 130.75 square kilometres of it inside a total footprint of 166.10 square kilometres. The headline cost the government admits to is the trees. Asked in Parliament, the environment ministry put the number to be felled at about 852,245, and in any case, below 964,000. That figure deserves to be pulled apart, because it is where the accounting first goes wrong. It rests on an assumed density of roughly 133 trees per hectare. Scientists who know these forests put the real density at 500 to 900 trees per hectare, which would mean somewhere between 32 and 58 lakh trees, and on the full diversion area, possibly past ten million. The most telling detail is that the felling tender itself lists "enumeration", the counting of the trees, as one of the tasks to be carried out. The state does not know how many trees it is authorising to be cut. It has approved the filing first and will count later.

The carbon follows the trees. The one-time release from clearing a forest of this size has been estimated by independent analysts at seven to twenty million tonnes of carbon dioxide equivalent, a pulse that sits oddly beside the same government's stated climate commitments, which I have written about in the context of who actually pays for the planet. And then there is the part of the forest that is not counted in trees at all. Galathea Bay is the most important nesting site in the region for the giant leatherback turtle, and was a wildlife sanctuary notified in 1997 until it was denotified in 2021 to make way for the port. The Nicobar megapode, a bird that incubates its eggs in mounds it builds along the shore, the saltwater crocodile, and the coral systems offshore all sit within the footprint or the dredge zone.

Figure 2. The government's parliamentary figure of about 9.6 lakh trees against the independent scientific range of 32 to 58 lakh, and an upper estimate near 100 lakh on the full diversion area. The felling tender lists enumeration is pending as a task, so no figure is settled. Sources: Ministry of Environment parliamentary answer; forest-density estimates reported in People's Democracy and NewsClick.

What the appraisal offers in return is compensatory afforestation, and here the accounting passes from inadequate to faintly absurd. The trees felled in an equatorial island rainforest are to be compensated by planting in the Aravalli range in Haryana, a semi-arid hill system more than fifteen hundred kilometres away and in an entirely different biome. A leatherback nesting beach and a hundred-foot rainforest canopy are not fungible with saplings in a dry north Indian range, and treating them as interchangeable entries in a ledger is exactly the move that lets the real loss disappear. The government has also defended the scale of clearance by noting that the diverted forest is only 1.82 per cent of the forest cover, but of the Andaman and Nicobar Islands as a whole rather than of Great Nicobar, which is a way of shrinking a number by choosing a larger denominator.

The people that the project calls an externality

The official line is that there will be no tribal displacement. The reality the line conceals is harder. Great Nicobar is home to the Shompen, a Particularly Vulnerable Tribal Group of around three hundred people, some of them uncontacted, who live as hunter-gatherers in the interior and have little immunity to outside disease, and to the Nicobarese, a coastal people who were moved to Campbell Bay after the 2004 tsunami and have asked since 2007 to be allowed back to their ancestral villages, which now lie inside the project zone.

In February 2024, a group of anthropologists and genocide scholars wrote to the President, warning that the project could amount to the genocide of the Shompen, the planned influx of six and a half lakh settlers being an eight thousand per cent rise in the island's population, that simple contact and disease could turn into a population collapse. In April 2025, the rights organisation Survival International put the same warning to the United Nations, listing violations of the ILO Convention, the UN Declaration on the Rights of Indigenous Peoples, Article 338A of the Constitution, the Forest Rights Act, and the government's own 2015 Shompen Policy.

The consent record is where the accounting becomes a governance scandal. The administration cited Gram Sabha resolutions as proof that the tribes agreed to the diversion of their land. Reporting and a legal challenge later established that the resolutions were signed largely by settlers, who are not stakeholders under the Forest Rights Act, that around sixty signatures were repeated identically across resolutions, and that the Forest Rights Act committees were constituted only two months before the meetings, fourteen years after the Act came into force. The Tribal Council of the Nicobarese did sign a no-objection in August 2022, then withdrew it that November on learning that the land marked for the project included the very villages they had been asking to return to. Roughly 130 square kilometres of tribal reserve was denotified under the 1956 Protection of Aboriginal Tribes Regulation in a land swap, denotify here, add elsewhere, that legal critics argue is beyond the power the Regulation grants.

The Forest Rights Act gives a Gram Sabha the power of consent, which is to say the right to refuse. The mechanism the National Green Tribunal eventually leaned on, a High-Powered Committee, offers only consultation, which the executive can override, and its members were drawn from the same ministries that had granted the original clearances, so that the body reviewing the decision answered to the people who made it. This is the difference between a real veto held by the people who live on the land and a review conducted by the state itself, and the project rests entirely on the second. I have written before about how the Indian state manages to be unaccountable while appearing to follow procedure; this is that pattern applied to an island.

Figure 3. The footprint, the forest diverted within it, and the share falling on the tribal reserve, drawn to scale against the island and nested at a common corner. The project occupies roughly a sixth of the island, and about half of its footprint lies within the reserve. Schematic, not a map. Sources: NITI Aayog and Ministry of Environment documents as cited.

The fault line under the port

There is one cost that is not ecological or social but physical, and it ought to trouble even a reader who cares only about the money. Great Nicobar sits on the same subduction zone that produced the 2004 Indian Ocean earthquake and tsunami. The island records forty to forty-five earthquakes a year and lies in the highest seismic category, zone five, and the very site at Galathea Bay where the port is to be built subsided by about fifteen feet during the 2004 event.

Building a thirty-thousand-crore port and an international airport on ground that dropped fifteen feet within living memory is a wager that the next two or three decades will be quieter than the last. A proper appraisal would price that risk, put a number on the probability of a major event over the asset's life, and the cost of losing the infrastructure, and carry it as a line in the accounts. I have not seen that number anywhere in the public case for the project.

When the commercial case is questioned, the answer becomes strategy

Set the costs aside for a moment and look only at the business case, because it is weaker than the confidence around it suggests. The doubts are practical, and they come from people who run ships. Colombo and Singapore turn vessels around in twelve to twenty-four hours, against an Indian average closer to forty-eight. India's first dedicated transhipment hub, Vizhinjam in Kerala, is already operating, is run by the Adani Group, sits closer to cargo on the busier west coast, and has undercut Colombo's vessel charges to attract traffic. The feeder-ship fleet that a transhipment hub needs is thin in Indian waters. Several shipping experts told reporters plainly that for a transhipment port, everything depends on volume, and that the volume Great Nicobar can realistically attract may not make it viable. It is worth noting that the same Adani Group, which runs the competing Vizhinjam port, is among the eleven parties that filed an expression of interest to build Galathea.

Here is the move that gives the project away. When commercial viability is under pressure, the defenders fall back on strategy. One expert quoted in the reporting put it with unusual honesty: even if the port does not give profit, think of it as an investment into strategic sovereignty. That sentence is the whole problem in miniature. A strategic justification cannot be tested against a profit-and-loss statement because it does not aim to generate profit.

So when the ecology is raised, the project is defended as a commercial necessity that India cannot afford to forgo; and when the commercials are raised, it becomes a strategic asset whose value is not measured in money at all. Each defence is invoked precisely when the other is under attack. A claim that can retreat to a different and unfalsifiable justification every time it is challenged is not an appraisal. It is a decision already taken, in search of whichever reason is standing.

And if strategy really is the driver, the honest conclusion runs the other way. A naval and surveillance presence in the eastern Indian Ocean does not require a full commercial container hub; it requires jetties, fuel, an extended airstrip, as at INS Baaz, and the aircraft and patrols to use it. The mega-port, the township for six and a half lakh, the tourism economy, none of that follows from the strategic case. It follows from the commercial case, which is the one the experts doubt.

An accounting that was built not to balance

This is where the development economics earns its place, because the failure here is not only political. It is a failure of method, and the discipline has names for each part of it. Start with the treatment of nature. Conventional project appraisal, and the national accounts behind it, record the port as the creation of an asset and the rainforest it replaces as free land. Partha Dasgupta's review of the economics of biodiversity makes the correction that ought to be obvious yet is routinely ignored: a forest is itself a capital asset, one that yields a flow of services few markets ever price, from carbon storage to the freshwater and storm protection that people downstream depend on.

Measured properly, the project does not create capital on empty land. It destroys one stock of capital, the one nobody invoiced, in order to build another, and books only the second. The fifteen-foot subsidence belongs in the same column, an uninsured liability against the asset being built.

Then there is the question of who carries the cost. Madhav Gadgil and Ramachandra Guha drew a distinction years ago between the people who consume India's resources from a distance and the people who live within the ecosystems they consume, and the Great Nicobar project is that distinction in its purest form. The cargo revenue, strategic reach, and construction contracts accrue to the mainland, shipping firms, and the state. The costs fall on a forest that cannot speak in a hearing and on three hundred Shompen who were not asked.

A social cost-benefit analysis worth the name would not net these against each other as if a rupee of port revenue and the survival of a people were the same kind of quantity. Amartya Sen's argument that development is the expansion of human freedom, and not the growth of output alone, is precisely the argument that the Shompen's continued existence is not an externality to be subtracted from a larger gain. It is part of what any honest measure of development is meant to do.

And there is the hubris that James Scott described in his study of how states see, the conviction that a scheme drawn up in a capital, legible on a map and a spreadsheet, can be imposed on a place whose actual workings the planners do not know and have not troubled to learn. The clearest evidence that this is such a scheme is the tree count itself. A project that approves the felling of a forest and contracts the counting of its trees as an afterthought has decided the outcome before gathering the most basic facts. The accounting was there to clothe a decision already taken, not to test whether it should be.

What an honest accounting would require

The alternative is not difficult to describe, though it asks the state to do something it has so far refused to do: let the answer come out wrong. If the real purpose is strategic, the government should say so plainly and build the mission-fit infrastructure that the purpose needs, the jetties and the airstrip and the patrols, and stop dressing a military posture as a commercial port and a smart city. If the purpose is commercial, then the volume projections, the comparison with Vizhinjam, and the turnaround times should be published and tested, and the project should stand or fall on whether the traffic is real.

A genuine social cost-benefit analysis would shadow-price the things the market ignores: the carbon, the lost ecosystem services valued as Dasgupta's framework requires, the risk-weighted cost of building in zone five, the value of a leatherback nesting site that exists nowhere else. It would apply a discount rate that does not assume the future is worth almost nothing, since a low enough discount rate is how appraisals make permanent losses vanish behind a few decades of projected revenue. It would treat the consent of the Shompen and the Nicobarese as a veto under the Forest Rights Act rather than a box ticked by settlers' signatures, which would mean renotifying the reserve, allowing the Nicobarese to return to the villages they have asked about since 2007, and accepting that the answer might be no. And it would make the minutes of the committees and the coastal-zone maps public, because an accounting that cannot be inspected is not an accounting, a point that holds for the Centre's fiscal books as much as for an island's forests.

The deepest requirement is the willingness to count a cost that cannot be undone as infinite, or near enough, rather than as a number small enough to be outweighed. A rainforest of this kind, once felled, does not grow back on any horizon that matters, and a people of three hundred, once exposed to outside disease and scattered off their land, does not come back at all. When a cost is irreversible, the ordinary arithmetic of weighing it against a benefit breaks down, because there is no future state in which the benefit can buy the loss back. An accounting that refuses to mark such costs for what they are is not prudence dressed as rigour; it is a choice the state would rather not admit to making.

I began with the ferry that does not go south, and I will end there, because geography is politics. The islands that Indians are invited to see are the ones where development is safe: the beaches and the colonial jail-turned-memorial. The island where the real decision is being made is the one we are kept out of, where the forest and the Shompen and the fault line are, conveniently, where no voter will ever have to look at them. A ledger that books only the visible side of an account, and is kept for a place almost no one is allowed to visit, will always come out in favour of building. Which is why the arithmetic was never the real question. What matters is who was allowed to see the books at all, and who had already been written out of them before the adding began.

Further Reading

The project and its official case, Great Nicobar Island Development Project, overview · The transhipment port at Galathea Bay · The strategic and economic case · The case that transhipment depends on lanes, not hinterland

The ecological cost: Almost a million trees: the government's own figure in Parliament · Why the tree count is a gross underestimate, and the carbon pulse · The same argument in People's Democracy · The leatherback bay, the seismic risk and the Haryana afforestation

The tribes and the consent question: Survival International's genocide warning to the UN · Clearances and the constitutional mandate, to the NCST · How the Nicobarese withdrew their consent

The economics of the port: Will the traffic justify the cost? · Experts warn the port may be economically unsound · The viability doubts and the Vizhinjam comparison

The method Dasgupta, The Economics of Biodiversity: The Dasgupta Review, HM Treasury, 2021 · Gadgil and Guha, Ecology and Equity, Routledge, 1995 · Scott, Seeing Like a State, Yale University Press, 1998 · Sen, Development as Freedom, Oxford University Press, 1999

Varna is a development economist and writes at policygrounds.press.