Compare output-linked incentives with capital subsidies in Indian industrial policy, using recent maritime-sector schemes as examples.

Capital subsidies lower the upfront cost of building capacity. Output-linked incentives pay for each unit produced or sold, as PLI schemes do. The ₹10,000 crore Container Manufacturing Promotion Scheme (CMPS) was approved in October 2026 and uses both types [1], so it is a good test case for comparing them.

Capital subsidies: building the base

• Interest Subvention Assistance (ISA): 3% a year on term loans, with an outlay of ₹859 crore [1].
• Merit: It makes entry easier in a sector that needs heavy investment. New (greenfield) units must have at least 1 lakh TEUs of capacity [1].
• Shared testing facilities remove a common barrier to getting global certification [1].
• Limit: The support pays for plants, not output. Capacity can sit idle with no penalty.

Output-linked incentives: rewarding performance

• Operational Expenditure Assistance (OEA): It is paid per container that is built to global standards and sold. Its outlay is ₹8,891 crore, about 89% of the total [1].
• Merit: Money goes only to products the market accepts. It also closes the operating-cost gap with established foreign makers [1].
• Demand risk: Maersk's order of 1,000 boxes from DCM Shriram is a start, not a market [2].
• Local-content cost: OEA needs 70% Indian content, rising to 90% from FY 2032-33 [1]. Indian inputs cost more: Indian steel makers spend 16–18% of revenue on logistics, against a global benchmark of 10–12% [3].
• WTO risk: India lost the solar-cells dispute (DS456, 2016) over a similar domestic-content condition [4].

Comparison at a glance

Design lessons from the maritime mix

• Milestones: Units expanding existing plants (brownfield) must add 25,000 TEUs within 3 years of in-principle approval [1].
• Assured demand: The Bharat Container Shipping Line plan (₹99,149 crore) includes buying containers made in India [2].
• Strategic aim: India imports nearly 2 million empty containers a year. CMPS targets 7.5 lakh TEUs of annual capacity [1][2].

Capital subsidies build the industrial base, and output-linked incentives make it competitive. CMPS puts most of its money into output-linked support and follows this sequence. Its success will depend on three things: independent audits of local content, a design that holds up under WTO rules, and steady orders from Indian shipping lines. If these are in place, the scheme will advance Aatmanirbhar Bharat and Maritime Amrit Kaal Vision 2047.