Seizing the Opportunity: Addressing India's Container Shortage
India’s current challenge of Cargo container supply gap is an opportunity waiting to be explored.
India aims to reach exports of ~2 trln EUR by 2030, thereby increasing its share in global export to 10% (currently ~3%). In the last decade, India’s merchandise exports grew at an AAR of 5% reaching >400 bln EUR by 2022-23.
To achieve the ambitious export goal, India is aggressively strengthening its manufacturing sector. In the past 5 years, India introduced several incentive schemes to increase domestic output, the most prominent being ‘Production Linked Incentives (PLI), targeting several strategic sectors. Another key piece of this puzzle is India’s transport and logistics sector, where the government is actively making attempts towards improvements. By 2030, India wants to lower its logistics expenditures from 13-14% of GDP to 8-10% of the GDP.
Key ecosystem complications:
- Heavy Dependence on Imports from China:
- India’s import reliance on China, especially (for multiple product groups including for cargo containers), leaves it exposed to fluctuations in the global market and geopolitical tensions. For instance, potential U.S. tariffs on Chinese imports, along with other global challenges such as the Red Sea crisis, can further exacerbate the container shortage.
- Severe Container Shortage:
- India currently produces only 10,000-30,000 containers annually against an estimated demand of 350,000 containers, highlighting a glaring shortfall that directly impacts the supply chain and export capabilities.
This gap not only threatens India's trade efficiency but also adds cost pressures on exporters who face delays and higher shipping fees due to container scarcity. The significant gap between supply and demand presents a compelling opportunity for international manufacturers, especially German container suppliers. Entering the Indian market now could allow them to leverage the early-mover advantage and capitalize on increasing government support.
Strategic Opportunity for International MNCs:
- Investment Potential: With minimal competition and a clear supply gap, international firms specializing in container manufacturing have the potential to establish a foothold in the Indian market. Leveraging India's growing export demand and supportive government policies, these firms can scale quickly and position themselves as key suppliers.
- Collaborative Approach: Collaborating with local manufacturers and logistics companies to produce and distribute containers can fast-track entry and help mitigate risks related to infrastructure and supply chains.
- Technological Expertise: German companies, in particular, can leverage their advanced manufacturing expertise and bring cutting-edge container technology to India, positioning themselves as critical partners in India's logistics and trade growth.
Each of the above is a lucrative opportunity but comes with its own set of challenges. Whether it is assessing the feasibility of a return on investment or quantifying the obtainable demand, deep knowledge of local market is important to fill the gaps. For a technology partnership or a long-term business collaboration, identification and selection of the “best-fit” partner is easier said than done. EAC with its strong logistics industry background is one of the most preferred consulting partner for these challenges for European companies with multiple success cases in recent years.
By acting now, global manufacturers—particularly those with a reputation for quality and innovation—can take advantage of this lucrative window, positioning themselves as key enablers of India’s export-driven growth story. In the long term, by addressing India’s container shortage, international MNCs can support the country’s vision of becoming a global export hub while securing a profitable and strategically important market position.
To learn more about how EAC can help your business succeed in the Indian market, please connect with our team of experts: Rituraj Shailendra and Rini Gear. We look forward to engaging with you.
