PLI scheme for shipping containers in the works amid shortage

NEW DELHI: The government is working on a production-linked incentive (PLI) scheme for manufacturing shipping-grade containers, said an official in the know, seeking anonymity.

The government has decided to play a decisive role in addressing the growing concern among Indian exporters and importers over a global shortage of containers amid the Russia-ukraine war, he said.

Besides, the Centre has also been trying to lower its import dependence on China for containers. “A PLI scheme is under consideration. The incentive amount will be considered to woo private players, and make India self-sufficient in manufacturing containers,” he said.

A high-level committee has been formed to promote local container manufacturing and bring it under PLI and clusterbased manufacturing system. The scheme may be announced in the budget for FY24 as part of the government’s initiative to introduce PLI projects for several sectors, he said.

Queries emailed to the ministry of ports, shipping and waterways, and the department for promotion of industry and internal trade did not elicit an answer till press time.

The need for a steady supply of containers is also key to the Centre’s efforts to boost domestic cargo transportation through inland waterways.

The sanctions imposed on Russia by the EU and the US following its invasion of Ukraine have led to an acute shortage of containers, which in turn increased freight rates and impacted global trade. In the past two years, covid, too, has disrupted manufacturing and supply of containers globally. The Economic Survey for FY22 highlighted how the container shortage is impacting trade. It said covid-19-related restrictions on international trade in 2020 affected container movement.

The prolonged partial closure of ports across the world created a glut of containers in some ports and an acute shortage in others. At the same time, because of widespread manufacturing delays, enough containers were not made, said the Economic Survey.

“With the global economy starting to recover since early 2021, containers that were stuck at various storage points are not being sent back to service fast enough. This has resulted in a skewed demand-supply situation for shipping containers, leading to very high shipping rates,” according to the Economic Survey.