Abstract This study addresses the problem of accurately assessing offshore wind resources and optimizing wind farm layouts along the Tamil Nadu coastline in India. The aim is to evaluate the efficacy of ERA5 reanalysis wind data at 100 m for offshore wind resource assessment and to determine the optimal layout for an offshore wind farm in Tamil Nadu's offshore subzone B1. Methods include a detailed comparison of ERA5 reanalysis wind data against empirical data from Tamil Nadu’s coastline, focusing on wind rose diagram generation for layout optimization. The research also involves a thorough financial analysis of wind energy projects, estimating capital and operational expenses, and calculating the levelized cost of energy (LCoE). Results reveal a slight underestimation of wind speed by ERA5 but confirm its overall efficacy in offshore wind resource assessments. The optimal wind farm layout is identified with a density of 5.17 MW per square kilometer and a turbine spacing of 7.22 me ters, aiming to maximize power generation and minimize array losses. The financial analysis estimates the LCoE at Rs. 8.84 per kWh. Additionally, the study finds an inverse relationship between the target LCoE and the required generation-based incentives (GBIs). Conclusions emphasize the necessity of substantial financial support for India's offshore wind industry. The study highlights the crucial role of policymakers in balancing costeffectiveness with long-term industrial growth to effectively foster the offshore wind energy sector. This research provides valuable insights into the techno-economic viability of offshore wind projects in India, serving as an essential decision-making tool for policymakers, project developers, and prospective investors in support of India's renewable energy goals.