India Set To Enter Container Manufacturing in Bid to Rival China

Container shortages severely disrupted trade in the second half of 2020, just as consumer demand began catching up to pre-pandemic levels. Indian shippers, just like their European, Australian, and US counterparts, began to feel the heat of the crisis as ocean freight rates skyrocketed to exorbitant levels. Governments around the world were forced to intervene, and the situation has somewhat stabilized.

A rising economy backed by increased export volumes has pushed the Indian government to address the root cause of the container problem so that a repetition of the same issue does not occur in the future. As the result, the Indian government is set to invest in the container manufacturing sector with the primary goal of boosting its exports.

Expected to play a big part in making India self-reliant in the long run, container manufacturing has already received a significant governmental push. The decision was accelerated by the ongoing container shortage on routes of major shipping lines, causing a widespread hike in shipping costs. Rice, which forms the core of major Indian exports, was significantly affected.

Ajay Sahai, director general of the Federation of Indian Export Organisation, told India Narrative that “we need to address the issue of containers at the earliest, especially as we focus on boosting exports on one hand and reducing imports on the other.”

To study the economic feasibility of the same, India’s Ministry of Ports, Shipping and Waterways has set up a committee based in Bhavnagar, in the Indian state of Gujarat.

India's Railway Minister, Piyush Goyal emphasized on the same when he said, "We should be aspiring for a much bigger play in container manufacturing. We have absolutely excellent steel making capabilities, we have an MSME sector with good skills and the frame making capabilities are also good."

Another reason for the Indian government's increasing push for self-reliance is the increasing friction between India and China.

China accounts for a staggering 95 percent of the global container manufacturing market. Given the changing geopolitical contours, India wants a strong supply of containers so Indian exporters do not feel pressured. If at some point India achieves self-reliance in container supply, it might also be able to export the containers.

But being the 'factory of the world' surely comes with its advantages for China. Containers roll out of the factory, heading straight for export stuffing.