Cabinet approves ₹10,000 crore scheme to boost container manufacturing | Economy & Policy News

Following Finance Minister Nirmala Sitharaman’s Budget announcement in February, the Cabinet on Wednesday approved the Rs 10,000 crore Container Manufacturing Promotion Scheme (CMPS), which aims to make India a competitive market for this important cog in the global trade wheel.

 

The scheme, which will provide financial support to India’s nascent container manufacturers, will run until 2039-40. It envisages establishing a globally competitive container manufacturing ecosystem in India, reducing import dependence and strengthening supply-chain resilience. The scheme is intended to support new manufacturing facilities as well as the expansion of existing container manufacturing units.

 

India’s traders have suffered from high freight costs in the wake of global crises since as early as 2023 – container leasing and buying rates have been volatile during these crises, and global shipping lines procure containers largely from China, which offers a major cost advantage.

  

According to industry sources, there’s a substantial difference between an India-manufactured container and one manufactured in China. For one twenty-foot equivalent unit (TEU), a Chinese container is available for around $1,700, whereas an India-manufactured container will not be available for less than $2,200-2,400, according to one manufacturer.

 

The scheme, looking to bridge these gaps, will offer interest subvention assistance (ISA), with a financial outlay of Rs 859 crore, to provide interest subvention of 3 per cent per annum on eligible term loans (capital loans) availed of by container manufacturers for setting up greenfield container manufacturing facilities and brownfield expansion of existing container manufacturing capacities.

 

Since the announcement of the scheme, infrastructure giants like Adani Ports and Special Economic Zone have reportedly expressed interest in building containers in India. Moreover, French shipping line CMA CGM also placed its first order with an Indian manufacturer, DCM Containers and Engineering, earlier this year.

 

The scheme will also provide operational expenditure assistance (OEA), with a financial outlay of Rs 8,891 crore, to provide financial assistance for all containers manufactured as per global shipping standards and sold by eligible container manufacturers.

 

“This would help bridge the cost gap and improve the competitiveness of domestically manufactured containers,” the Cabinet statement said.

 

The government hopes that continued assistance will allow steelmakers to build capacity to produce speciality steel required for containers at a lower price.

 

The scheme also provides testing and certification assistance, with a financial outlay of Rs 150 crore, to support the setting up of common facilities such as dynamic longitudinal impact testing, etc.

 

With the scheme, the Centre intends to increase annual domestic container manufacturing capacity around tenfold to 750,000 TEUs. It also sees the potential to position India as a global export hub for quality shipping containers.

 

The scheme is expected to generate an estimated 3,000 direct jobs and over 50,000 indirect jobs, while supporting ancillary industries such as corner castings, specialised steel, wooden frames and paints.