Why India needs to make a lot more containers to boost trade Premium

India's containerized trade growth, challenges, and solutions discussed by an expert in logistics and supply chain management.

India’s rapid trade growth is planned around containerized transport of goods. But there’s a key logistical bottleneck. India just does not make enough containers.

The container can be seamlessly multimodal – rail, ship and road. It has revolutionized world trade by rapidly cutting transportation time, port delays and so on. It can be said that the untold story of swift trade movements that have enabled globalization is actually the containerization of goods.

Container boxes are highly standardized in dimensions and cargo-carrying capacities. Once the cargo is stuffed inside the container and sealed after Customs clearance, the boxes can be moved over long distances without any disturbance to the cargo.

India has sought to increase container handling capacity in various ports to boost exports. Ambitious new ventures such as the Vadhavan and Galathea Bay ports as well as the multimodal India Middle East Europe Economic Corridor are built around containers.

India’s container market is expected to more than double from 11.4 million TEU in 2023 to 26.6 million TEU by 2028. One 20-ft container box is equivalent to 1 TEU. India manufactures around 10,000 to 30,000 container boxes a year and this production can therefore support only a fraction of the projected doubling. China, in comparison, manufactures 2.5 to 3 million container boxes per year.

In India, it takes $3,500 to $4,800 to make one container whereas in China it costs $2,500 and $3,500. India therefore has to lease the container boxes, mostly from China. All our plans for ramping up trade are put at risk by inadequate container production within India.

Shortage of containers often jacks up freight rates in the country. Congestion at Indian ports mounts.