The government is working on a Production-Linked Incentive (PLI) scheme for manufacturing shipping-grade containers, said an official on condition of anonymity.
In view of the growing concern among Indian exporters and importers about the global shortage of containers amid the Russo-Ukraine war, the government has decided to play a decisive role in resolving the problem, he said.
Apart from this, the Center is also trying to reduce its import dependence. China for containers. “A PLI scheme is under consideration. Incentives as per requirement will be considered to woo private players and make India self-reliant in manufacturing containers.”
A high level committee has been constituted to promote local container manufacturing and bring it under PLI and cluster based manufacturing system. He said that as part of the government’s initiative to introduce PLI projects for several sectors, the scheme may be announced in the Budget for FY24.
Emailed queries to the Ministry of Ports, Shipping and Waterways and Department for Promotion of Industry and Internal Trade (DPIIT) remained unanswered till press time.
The need for a steady supply of containers is also important to the Centre’s efforts to promote domestic freight transport through inland waterways.
Sanctions imposed by the European Union and the United States on Russia following its invasion of Ukraine have led to a severe shortage of containers, raising freight rates and affecting global trade. In the last two years, Covid has also disrupted the manufacturing and supply of containers globally.
The Economic Survey for FY2012 highlighted how the container shortage is affecting trade. It said that COVID-19 related restrictions on international trade affected container movement in 2020.
Prolonged partial closure of ports around the world has led to a glut of containers in some ports and a severe shortage in others. Also, due to widespread manufacturing delays, not enough containers were made, said the Economic Survey released by the government.
“With the global economy starting to recover from early 2021, containers, which were stuck at various storage points, are not being put back into service fast, resulting in a very tight demand-supply situation for shipping containers, Due to which the shipping rates are very high. During April-September 2021, India spent $14.8 billion on imports of transport services, a 65% increase over the previous year,” the survey said.
The Center has taken some steps to address the supply shortfall, such as increasing import of empty containers, release of abandoned, detained or seized containers and removal of duty free ‘stay’ of containers.
To increase domestic container manufacturing, the government has identified Bhavnagar in Gujarat as a hub and some companies have already started operations. According to the Centre, India needs 350,000 containers every year, and the demand will only grow, with the government setting an ambitious export target of $2 trillion by 2030.
rituraj.baruah@livemint.com
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