India’s finance minister Niramala Sitharaman has tabled the pre-budget Economic Survey for 2021-22 in the Parliament that gives an insight into the economic status of the country.
According to the survey, India’s Gross Domestic Product growth is projected to grow between 8% and 8.5%, which is based on the assumption that “there will be no more debilitating pandemic related economic disruption, a normal monsoon, significant withdrawal of global liquidity, average global oil prices in the range of US$70-US$75, and global supply chain disruptions easing over time.”
The survey says that the supply chain blockages in the form of ocean container shortage and rising freight costs will remain for some time now.
In addition, the survey has highlighted the container shortage situation captured by Drewry’s Composite World Container Index, which stands at US$9,698.33 per 40′ container as of 20 January 2022.
This is US$6,656 higher than the five-year average and is 82% higher than a year earlier. The prolonged period of rising prices shows that the disruptions in the international box market are far from over and will continue to impact ocean trade.
There is an upward trend during the same period in freight rates for major international sea routes.
There has been a 300% to 350% rise in ocean freight rates which is a result of container shortages and lack of space on container vessels.
The Survey has also highlighted that since 2019, the production of brand new containers has also slowed down while there is a rise in the disposal of containers during the same period. The overall growth in the containers has dropped from 11% in 2019 to 5% in 2021.
“Unless the production is ramped up significantly across the globe, the shipping bottlenecks will remain a persistent problem,” noted the Survey.
Sheuly Ghosh
India Correspondent
