India saw a significant increase in inbound containers at its ports from January to May 2023, with the Container Availability Index (CAx) consistently above 0.75 year-to-date. This increase is due to a decrease in outbound container demand. The high CAx values indicate a surplus of containers, reflecting an increase in imports leading to container overcapacity.
In April 2023, the first month of fiscal year 2023-24, India recorded a substantial 13 percent year-on-year decline in merchandise exports valued at US$35 billion. According to data from Container xChange, an online container logistics platform, this is the sharpest monthly decline in the last three years and points to a significant drop in export performance.
Nonetheless, the Indian government is encouraging export-oriented industrial groups to increase shipments and boost annual trade volumes. India’s average container price for 40 HC containers and 20 DC containers has almost halved year-on-year, while pick-up fees on the India-US trade route have increased significantly. This indicates an increasing demand for containers from India.
Strengthening trade ties between India and the US have seen the latter rise to become India’s top trading partner in FY 2022-23. Bilateral trade rose 7.65 percent to $128.55 billion, with a modest increase in exports to the United States and a notable increase in imports.
Finally, according to the Indian Ministry of Ports, Shipping and Waterways, the country’s major ports handled a record 795 million tonnes of cargo in the 2022-23 financial year, a 10 percent increase from the previous year.
“The Indian economy has consistently prioritized export promotion, driving economic momentum. However, container traders, shippers and freight forwarders in India are witnessing a slowdown in container exports. The US, European Union and UK markets are seeing a noticeable drop in consumer demand. This trend had an impact on exporters’ order volumes,” he said Supal Shah, CEO, ARCON Containers.
“Despite India’s export slowdown, there is optimism that export growth will pick up again from July this year. The third quarter of the calendar year is expected to bring improvements as new orders and bookings increase in preparation for the upcoming festival and New Year season. Industry officials are confident that this positive trend will lead to a revival in container exports and contribute to the overall growth of the Indian economy,” he said Christian Roeloffs, CEO and Co-Founder.