NEW DELHI, Oct. 28: The Union Cabinet on Wednesday approved a ₹10,000 crore Container Manufacturing Promotion Scheme (CMPS) to strengthen India's domestic shipping container industry, reduce dependence on imports and establish the country as a competitive manufacturing centre for global maritime trade.
The scheme, which will remain operational until the financial year 2039–40, aims to increase India's annual container manufacturing capacity nearly tenfold to 750,000 twenty-foot equivalent units (TEUs). It will provide financial assistance to manufacturers establishing new facilities and companies expanding existing production units.
The decision follows Finance Minister Nirmala Sitharaman's announcement in the Union Budget in February and forms part of the government's effort to strengthen domestic manufacturing and improve the resilience of India's international trade infrastructure.
Shipping containers are essential to global commerce, carrying manufactured goods, agricultural products, machinery and other cargo across international shipping routes. Their availability and cost directly influence freight operations and the movement of goods between countries.
India currently depends heavily on imported shipping containers, with China occupying a dominant position in global manufacturing. Chinese producers benefit from large-scale production, established supply chains and lower manufacturing costs, making it difficult for emerging Indian manufacturers to compete on price.
According to industry estimates, a standard container manufactured in China costs approximately $1,700 per TEU, compared with $2,200–$2,400 for a comparable container produced in India.
The difference of $500–$700 per TEU has been a major obstacle to the growth of domestic production, particularly because international shipping companies generally procure containers from suppliers offering competitive prices and reliable delivery schedules.
The new scheme seeks to narrow this cost gap through financial incentives, support for manufacturing investment and assistance with testing and certification.
Of the total ₹10,000 crore allocation, ₹8,891 crore has been earmarked for operational expenditure assistance. This component will provide financial support for containers manufactured by eligible Indian companies and sold in compliance with international shipping standards.
The assistance is intended to improve the price competitiveness of Indian-made containers and help domestic manufacturers compete with established overseas suppliers.
Another ₹859 crore has been allocated for interest subvention, providing a 3 per cent annual interest subsidy on eligible term loans taken by container manufacturers.
The benefit will apply to loans used for establishing new manufacturing facilities, commonly referred to as greenfield projects, as well as expanding existing production units through brownfield investments.
The government expects the interest subsidy to reduce financing costs and encourage private companies to invest in container manufacturing infrastructure.
An additional ₹150 crore will support testing and certification facilities, including common infrastructure for specialised assessments such as dynamic longitudinal impact testing.
These facilities are important because containers used in international shipping must comply with recognised technical and safety standards. They must withstand repeated handling, stacking, movement and the physical stresses encountered during transportation.
By supporting common testing facilities, the government intends to make it easier for domestic manufacturers to meet international requirements without individually investing in every specialised certification facility.
The programme also seeks to encourage the development of supporting industries, particularly specialised steel manufacturing.
Shipping containers require specific grades of steel capable of providing structural strength and durability. The government expects sustained demand from container manufacturers to encourage Indian steel producers to expand their capacity to supply these materials at competitive prices.
The benefits could extend to companies manufacturing container corner castings, wooden flooring components, paints and other specialised inputs.
According to government estimates, the scheme could generate approximately 3,000 direct jobs and more than 50,000 indirect employment opportunities.
These jobs are expected to emerge across container manufacturing plants and associated supply chains, although actual employment generation will depend on investment, production growth and market demand.
The initiative comes after several years of disruption in international shipping markets.
Since 2023, geopolitical tensions and supply-chain disruptions have contributed to volatility in freight rates and container leasing costs. Such fluctuations have affected exporters and importers, particularly businesses that depend on predictable transportation expenses.
A stronger domestic manufacturing base could provide Indian shipping companies and logistics operators with an alternative source of containers, reducing their dependence on overseas suppliers.
However, additional manufacturing capacity alone will not eliminate volatility in freight charges, which are also influenced by shipping routes, vessel availability, fuel costs and global trade conditions.
Interest in Indian container manufacturing has already begun to emerge among major infrastructure and shipping companies.
Adani Ports and Special Economic Zone has reportedly expressed interest in entering the sector, while French shipping company CMA CGM placed its first order with Indian manufacturer DCM Containers and Engineering earlier this year.
Such developments suggest that domestic manufacturers could find opportunities in both the Indian market and international shipping supply chains if they can meet global standards and offer competitive pricing.
The government's target of 750,000 TEUs in annual manufacturing capacity represents a substantial expansion from India's current production base.
Achieving that target will require sustained private investment, reliable access to raw materials, technological capability and sufficient demand from shipping companies.
The long duration of the scheme, extending until 2039–40, is intended to provide manufacturers with greater certainty when making investment decisions in a capital-intensive industry.
The programme also has strategic significance for India's trade infrastructure.
Although India operates major ports and handles substantial international container traffic, dependence on imported containers leaves an important part of the logistics supply chain exposed to overseas production and pricing decisions.
Building domestic manufacturing capacity could reduce that vulnerability while creating opportunities for exports.
The government's objective is not merely to substitute imported containers with locally manufactured alternatives, but to develop an industry capable of competing in international markets.
The effectiveness of the ₹10,000 crore scheme will depend on whether the incentives can narrow the manufacturing cost difference with China and encourage Indian companies to achieve production at a commercially sustainable scale.
If those objectives are realised, India could strengthen its position in the global container supply chain while expanding domestic manufacturing, supporting related industries and creating new employment opportunities.
