The Indian prime minister has inaugurated a $540m deep sea dredging project in ocean straits between India and Sri Lanka.
Manmohan Singh said that the shipping channel was "a boon" for the people of the southern state of Tamil Nadu.
It will for the first time provide a continuous route within Indian waters.
The project is considered crucial for trade and defence needs, but it has been criticised by campaigners who say it will damage the marine ecosystem.
They say that the ecologically important Palk Straits and the Gulf of Mannar will be harmed.
Tamil Nadu Chief Minister J Jayalalitha, boycotted the function in protest over what she said was the "bulldozing of environmental concerns raised by fishermen".
Members of her AIADMK party held demonstrations against the project in the city of Madurai.
But Prime Minister Singh said it was one of the most ambitious projects to be ever conceived in the Indian port sector.
"It will be beneficial to small fishermen, because travel time between the eastern and western coast will come down, " he said.
"It will also lead to all-round development of Tamil Nadu and Coromandel coast."
Mr Singh said that every effort would be made to preserve the country's marine life and preserve the livelihoods of fishermen.
Indian Shipping Minister TR Balu said that sandstone on two stretches along the 167km (104 mile) channel would be dredged to form the Sethusamudhram Shipping Channel Project.
It will allow ships to travel between India's west and east coasts without circumnavigating Sri Lanka.
He said the new channel would have a depth of 12 metres and a width of 300 metres for two-way traffic.
When completed the project will enable local and international ships to save around 36 hours sailing time, cutting out a distance of nearly 400 nautical miles.
Backers of the project, mainly from Tamil Nadu, say it will also save fuel and fleet labour.
It is hoped the dredging will provide trade benefits for India
They say it will boost maritime trade along the south Indian coastline, increase the revenue of various ports and help the coastal economy to boom.
Officials say that Tuticorin Port, located on the southern tip of India, could become a leading container and shipment destination.
The port has the advantage of being located centrally on the international trade route connecting Europe and the Middle East on one side and the Asia-Pacific region on the other.
Defence experts say the channel provides a crucial base for India to become the Indian Ocean's predominant naval power.
However, Sri Lanka has expressed its concern over the possible negative impact on its north-eastern coast and has appointed a ministerial level expert committee to study the project.