What’s Happening?
In the past two years, COVID-19 has disrupted the manufacturing and supply of shipping containers. Add to it the sanctions the US and Europe imposed on Russia following the war, which led to a further shortage of containers and increased freight rates while impacting global trade.
The extended partial closure of ports across the world created an excess of containers at some ports and an acute shortage at others. During April-September, 2021, India spent $14.8 billion on transport services imports, which was 65% higher than the previous year.
The Economic Survey of 2022 also highlighted how container shortages affected trade.
PLI Scheme for Shipping Containers
Due to all these problems, the government is working on a production-linked incentive (PLI) scheme for manufacturing shipping-grade containers. According to the requirement, the incentive amount will be considered to attract private players, which will help make India self-sufficient in manufacturing containers.
The scheme may be announced in the budget for FY24. The government has identified Bhavnagar in Gujarat as a manufacturing hub for containers.
Future Outlook
According to government estimates, India requires around 3.5 lakh containers yearly, with the demand increasing from these levels as the government has set a $2 trillion export target by 2030!
With this move, the government will also be able to lower its import dependence on China for containers. The government is also taking other steps, such as releasing abandoned, detained, or seized containers. According to estimates, the cost of repositioning empty containers rounds up to about $20 billion every year.
The PLI scheme on the cards will promote indigenous manufacturing and can truly help make our Bharat ‘Aatmanirbhar!’
