A port of call would be a good start requiring minimal investment then later expand as it develops, it would be the first in bay of bengal/andaman sea/malacca strait area.Is this as a refueling port?
LF & gambling!A port in the Nicobar islands would be a great idea it would also be a cost savings to ships which have to travel further to ports in Sri Lanka,Bangladesh or Burma,thailand. All of these countries ports would be hit hard but that is competition. As far as the security issue it is almost a non issue Nicobar/Andaman islands are probably one of the safest places in India even safer than any spot on the mainland. It would be a good tourist attraction and adding a casino and other things would attract a lot of buisness.
Leave the military issue for last and unnofficial while keeping 24 hour satellite surveillance.LF & gambling!
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India can also pull some strings in SAARC to bring traffic in this port. Myanmaar & Indonesia are keen to join SAARC. Softer terms in transaction duties will help this port even if it faces competition from others.
On military setup, how about a long range radar (x-band?) on one of the Nicobar Islands? That will put scratches on some very uncomfortable places