The government is considering financial support for local manufacture of shipping containers amid growing shortage and rising costs post Covid.
A viability gap funding (VGF) scheme is being considered as part of the plan that would be implemented in mission mode, people familiar with the development said.
“Direct subsidy and support via VGF are being examined,” a government official said, adding that inter-ministerial consultations were on. A container manufacturing mission is being considered to hasten local manufacturing, according to the official.
The official said the idea is to shield exporters and importers from the vagaries of sudden shortage of containers and spikes in premia.
Non-availability of containers emerged as a key challenge for the trade sector post-Covid when China was seen importing empty containers by offering a premium.
“Chinese container owners tend to corner them during global disturbances. This leads to shortages and India wants to break free from the situation,” the government official said.
These suggestions had been mooted by the inter-ministerial group in 2022 but have concretised now following a repeat of container shortage and spike in premia following geopolitical conflicts.
“The goal is to facilitate an ecosystem for container production under the ‘Make in India’ programme,” the official added.
Containers manufactured in India can be priced more competitively compared with foreign-owned ones with government support, the official said, adding that sops are expected to be announced in the current financial year itself.
It is estimated that Container Corporation of India (Concor) alone has near term demand for buying approximately 50,000 containers.
“Routing the funds needs to be finalised. Concor may also be offered a subsidy to buy Indian containers,” the official added.