Andaman and Nicobar islands are strategically located near the Malacca Strait and has the potential of being a key base for projection of power in the Indian Ocean . India's first tri services command Andaman and Nicobar Command was set up in 2001. Recently a full fledged naval base INS Kohassa was commissioned in the north Andaman Island . According to reports a 10 year roll on plan at an estimated cost of 5000 crore rupees is being worked out for developing military infrastructure at the the Andaman and Nicobar Command .