FCC

India's ₹11,000-crore PLI boosts container manufacturing.

2023-08-28

The Ministry of Ports, Shipping and Waterways has introduced a ₹11,000-crore Production-Linked Incentive (PLI) scheme aimed at transforming India into a prominent shipping container manufacturing center, competing with China and catering to at least 10% of global liners' demand. The scheme, spanning nine years, will offer incentives during the initial five years, gradually decreasing over the subsequent four years. This move responds to the severe shortage of shipping containers since October 2020, which disrupted the global supply chain due to the pandemic.

The PLI scheme proposes two incentive structures: one based on the price difference between Indian and international manufacturers, and the other involving a differential calculation if beneficiaries fail to achieve incremental production.

Financial estimates indicate an outlay of ₹32 crore in the first year, increasing to ₹880 crore in the third year, before eventually tapering down to ₹550 crore in the ninth year. The initial two years are designated as an "incubation stage" to facilitate the establishment of manufacturing facilities.

Given China's dominance in international container manufacturing, constituting around 90% of global demand, India's PLI scheme aims to counter this dependence by creating a domestic manufacturing ecosystem. This aligns with the growing trend of the "China plus one" strategy adopted by companies to diversify supply chains and reduce risks. The scheme underscores India's aspirations to bolster its container manufacturing sector, enhancing self-reliance and resilience in the face of global disruptions.