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March 4, 2024

Shipping Containers Produced in India: How the Modi Government Intends to Reduce Reliance on China’s ‘Monopoly’

The Modi government is working on a comprehensive plan for India to produce shipping-grade containers that include providing Production Link Incentives (PLI) to local businesses in order to reduce its reliance on China.

During the Covid-19 outbreak, there was a severe lack of shipping-grade containers all across the world. Due to the shortfall, shipping companies throughout the world dramatically increased container freight prices, which had a negative influence on India’s export and import supply chain.

Only a tiny handful of domestic small businesses currently produce containers for use on the rail mode. With 37,000 containers, The Container Corporation of India Limited (CONCOR), a public sector organization (PSU) under the Ministry of Railways, operates India’s biggest container fleet.

But China, which has a monopoly in the market, imports the whole fleet serving the local market.

CONCOR needs about 50,000 containers over the next three years just for the local market.

CONCOR has now placed a second order for 10,000 more containers from a Bhavnagar-based company after ordering 8,000 containers from domestic manufacturers last year.

An inter-ministerial panel established in June on the instructions of the Prime Minister’s Office has now suggested a number of measures, including granting PLIs to indigenous firms to produce containers, in order to study the issue and develop a plan to develop capacity for manufacturing shipping grade containers in India.
“The draft PLI is ready and is in the process of being circulated for inter-ministerial consultations,” a senior government official, said.

The inter-ministerial committee, which is made up of representatives from CONCOR and the National Industrial Corridor Development Corporation (NICDC), as well as officials from the shipping, steel, and commerce ministries, also looked into issues like the availability of steel in a particular quality needed for making containers and the expansion of panels for inspection.

Ashwini Vaishnaw, the minister for railways, Sarbananda Sonowal, the minister for shipping, and Mansukh Mandaviya, the minister for health, reviewed the committee’s recommendations and the actions done by the different agencies so far on August 15.

The committee was informed during contacts with industry stakeholders that although a specific type of steel is utilized to make containers, there are currently no Indian standards for the same.

“You need the specified Corten-A steel for manufacturing containers. The committee took up the matter with the Bureau of Indian Standards (BIS), which has now issued an Indian standard, which is equivalent to Corten-A steel specifications,” an official committee member said.

The steel ministry is also in contact with steel producers to encourage them to register with BIS and secure a license to roll steel in accordance with the required specifications. Similar to this, the panel of inspecting and certifying agencies has grown from two to six on the committee’s instruction to the director general (shipping).

The ISO standard test is used by these organizations to certify containers.

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