Cabinet approves ₹10,000 crore scheme to boost container manufacturing

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

The scheme, which will provide financial support to India’s nascent container manufacturers, will run till 2039-40 (FY40). 

With the scheme, the Centre intends to increase annual domestic container manufacturing capacity by around ten-fold, up to 750,000 twenty-foot equivalent units (TEUs). It also sees 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.

India’s traders have suffered from high freight costs in the wake of global crises from as early as 2023 — with container leasing and buying rates turning volatile. Global shipping lines also procured containers largely from China, owing to major cost advantages. 

According to industry sources, there’s a substantial difference between an India-manufactured container and one manufactured in China. For one TEU, a Chinese container is available for around $1,700, compared with around $2,200-2,400 for others, according to one manufacturer. 

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

The scheme will also provide an operational expenditure assistance (OEA) with a financial outlay of ₹8,891 crore to provide support 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 the continued assistance will allow steelmakers to build capacity to produce specialty steel required for containers at a lower price. The scheme also provides testing and certification assistance with a financial outlay of ₹150 crore to support setting up of common facilities such as dynamic longitudinal impact testing. 

Since the announcement of the scheme, infrastructure giants like Adani Ports and Special Economic Zone have reportedly expressed interest in building boxes in India. 

French shipping line CMA CGM also placed its first order on an Indian manufacturer, DCM Containers and Engineering, earlier this year.  

                                                               Booster shot

• The Container Manufacturing Promotion Scheme (CMPS) will run till 2039-40
• Looks to establish a globally competitive container manufacturing ecosystem in India
• Intended to support new as well as expansion of existing container manufacturing units
• Adani Ports have reportedly expressed interest in building boxes in India