Dubai-based Transworld Group, promoted by Indian businessman Ramesh Ramakrishnan has signed an agreement with state-owned Sagarmala Development Company Ltd to build a cargo container manufacturing facility in Gujarat with an investment of about ₹200 crore.
The plan marks India's entry into manufacturing cargo containers, a segment dominated by China, as part of the Atmanirbhar Bharat initiative.
"Indian coastal shipping adds about 10,000 twenty-foot equivalent units (TEUs) of new containers annually, while India's largest container rail operator – Container Corporation of India - may require 2,000 to 2,500 TEUs of new containers every year," an official with the Ministry of Ports, Shipping and Waterways said.
"Almost all the shipping containers used today are imported from China. By the time they reach Indian shores, they cost us around 40% more, including ocean freight, Customs duty, other taxes, custom house agent charges and sundry expenses," the official said.
The government's move to produce shipping containers in India is part of the Atmanirbhar Bharat initiative and creates an import substitute for the new shipping containers.
China makes about 90% of global shipping containers. CIMC is the largest container manufacturer with a market share of 40%. Other players include Singamas, COSCO and CXIC.
Currently, India sources its entire container needs from China at prices ranging from ₹2,39,760 to ₹4,54,545, depending on the container's size.
India's external trade grew to $838.46 billion in FY20, and the increasing trade is translating into higher demand for containerization due to their efficiencies.
India will require approximately 60,000 new containers between 2021 and 2026, an annual addition of about 10,000 TEUs per year.
The global container fleet is handled by container leasing companies and shipping lines, holding a 49% share.
Triton is the world's largest container leasing company with a market share of 14%, owning over 6 million twenty-foot equivalent units.
"India should start manufacturing marine containers within the country," said a spokesman for the Container Shipping Lines Association (India), a lobby group for global container carriers, referring to the recent shortage of containers for exports from India.
"This would assist in the security of supply chains for exports," the CSLA spokesman added.