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Inland Water Transport in India – Importance, Projects, Challenges, and Way Forward

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Inland Water Transport (IWT)

Inland Water Transport (IWT) refers to the movement of goods and passengers through navigable rivers, canals, lakes, and backwaters. It is the most fuel-efficient and environment-friendly mode of transportation, capable of carrying bulk cargo at low cost while reducing congestion on road and rail networks. India, with a navigable length of about 14,500 km, has declared 111 National Waterways under the National Waterways Act, 2016 to promote IWT.

Advantages of Developing Inland Waterways in India

  • Cost-Effective Transportation
    • Inland waterways offer the lowest cost per ton-kilometer compared to road and rail, reducing overall logistics costs.
    • Ideal for transporting bulk commodities such as coal, iron ore, and agricultural produce.
  • Energy Efficiency and Environmental Benefits
    • Waterways consume less fuel per ton of cargo transported, making them more energy-efficient.
    • Lower emissions and reduced air pollution compared to road and rail transport.
  • Decongestion of Roads and Railways
    • Shifting freight traffic to waterways can alleviate the burden on overcrowded road and rail networks.
    • This helps reduce traffic congestion, accidents, and infrastructure wear and tear on highways.
  • Connectivity to Remote and Landlocked Areas
    • Inland waterways can improve accessibility to remote regions, enhancing trade and development in areas with limited road and rail infrastructure.
  • Boost to Tourism
    • Development of waterways facilitates river cruises and tourism, promoting local economies.
    • Enhances connectivity to heritage sites and eco-tourism destinations.
  • Economic Development and Employment
    • Inland waterway projects generate employment in sectors such as port handling, shipping, logistics, and tourism.
    • Reduced transportation costs benefit industries and agriculture, boosting competitiveness.
  • Integration with Coastal Shipping and Multimodal Transport
    • Inland waterways can seamlessly integrate with coastal shipping, railways, and road transport for a robust multimodal logistics network.

Challenges in Implementing Inland Waterway Projects

  • Infrastructure Deficiency
    • Lack of adequate terminals, jetties, and dredging facilities hinders the operational efficiency of waterways.
    • Inconsistent water depth across rivers makes year-round navigation difficult.
  • Environmental Concerns
    • Dredging activities and construction of terminals can disrupt aquatic ecosystems and biodiversity.
    • Waste disposal and oil spillage from vessels risk polluting water bodies.
  • Limited Commercial Viability
    • Seasonal variations in river flow and siltation reduce the navigability of waterways.
    • Low cargo volumes and long transit times make waterways less attractive to businesses.
  • Coordination and Governance Issues
    • Multiple agencies overseeing water resources, navigation, and environment lead to delays and inefficiencies.
    • Lack of a unified policy framework hampers project execution.
  • Competition from Road and Rail
    • Well-established road and rail networks dominate freight transport, limiting the adoption of waterways.
    • Industries are reluctant to shift to a mode of transport perceived as slower and less reliable.
  • High Initial Investments
    • Developing inland waterway infrastructure requires significant investments in dredging, building terminals, and acquiring vessels.
    • Private sector participation is limited due to uncertain returns on investment.
  • Social Displacement and Land Acquisition
    • Construction of terminals and related infrastructure often faces resistance due to land acquisition and displacement of local communities.

Measures to Overcome Challenges

  • Infrastructure Development
    • Invest in modernizing infrastructure, including terminals, warehouses, and jetties.
    • Ensure regular dredging to maintain navigable depth in rivers.
  • Environmental Safeguards
    • Adopt eco-friendly dredging techniques to minimize ecological disruption.
    • Implement strict waste management and pollution control measures for vessels.
  • Enhancing Commercial Viability
    • Provide subsidies and incentives to industries to use waterways for freight transport.
    • Develop feeder networks to connect waterways with road and rail transport for seamless cargo movement.
  • Policy Reforms and Governance
    • Create a unified authority to oversee and coordinate inland waterway projects.
    • Streamline approval processes and encourage private sector participation through public-private partnerships (PPPs).
  • Integration with Multimodal Logistics
    • Develop multimodal logistics parks that integrate waterways with road, rail, and coastal shipping.
    • Promote the use of containers for easier transshipment between modes.
  • Promoting Public Awareness and Adoption
    • Conduct awareness campaigns to highlight the economic and environmental benefits of waterways.
    • Encourage industries to pilot waterway-based transport solutions.
  • Leveraging Technology
    • Use GPS-based navigation systems and real-time monitoring to improve the reliability of waterway transport.
    • Deploy advanced vessels designed for shallow water navigation.
  • International Collaboration
    • Learn from countries like the Netherlands and China, which have developed highly efficient inland waterway systems.
    • Seek financial and technical support from global institutions like the World Bank for large-scale projects.
  • Focus on Tourism and Passenger Services
    • Develop river cruise services and water taxis to promote tourism and provide an alternative mode of transport for passengers.

Government Steps

  • National Waterways Act, 2016: Declared 111 waterways as National Waterways to systematically develop IWT.
    • The operational length of NWs increased from 2,716 km (2014-15) to 4,894 km (2023-24). Major works include fairway maintenance, community jetties, floating terminals, Multi-Modal Terminals (MMTs), Inter-Modal Terminals (IMTs), and navigational locks.
  • Jal Marg Vikas Project (JMVP): Aims to develop NW-1 (Varanasi-Haldia) with World Bank support. Includes dredging, terminal construction, and navigation aids.
  • Inland Vessels Act (2021): Replaced a 100-year-old law; provides uniform regulatory framework for safety, pollution control, and operations.
  • Jalvahak – Cargo Promotion Scheme
    • The Inland Water Transport (IWT) sector in India is still developing and needs support to shift cargo from road and rail to waterways. Although waterway transport is cheaper, overall logistics costs can be higher due to multimodal handling. 
    • To address this and promote IWT, the “Jalvahak” Scheme was launched on 15 December 2024 with a budget of Rs. 95.42 crores. 
    • It has two key components:
      • Financial Incentive: Cargo owners get a 35% reimbursement on actual operating costs for shifting cargo from road/rail to IWT, encouraging use of waterways.
      • Scheduled Services: Regular cargo services have been introduced to boost reliability and predictability.
    • Key routes include:
      • Kolkata–Patna–Varanasi (NW-1)
      • Kolkata–Pandu (NW-2 via Indo-Bangladesh Protocol route)
      • Kolkata–Badarpur/Karimganj (NW-16 via IBP route)
    • The scheme covers cargo movement on NW-1, NW-2, and NW-16, benefiting surrounding regions and building trust in waterway transport.
  •  Extension of Tonnage Tax to Inland Vessels
    • Announced on 1st February 2025 during the budget, the tonnage tax regime has been extended to inland vessels registered under the Indian Vessels Act, 2021.
      • Benefit: Provides a stable and predictable tax regime based on vessel tonnage rather than profits, thereby lowering the tax burden and encouraging broader adoption of inland shipping.
  • Regulatory Framework for Private Investment
    • The National Waterways (Construction of Jetties/Terminals) Regulations, 2025 have been notified, enabling private investment in inland waterways infrastructure by establishing a clear legal and operational framework for the construction and management of jetties and terminals.
  • Port Integration
    • To ensure seamless multimodal logistics, the Multi-Modal Terminals at Varanasi, Sahibganj, and Haldia, as well as the Intermodal Terminal at Kalughat, are being transferred to Shyama Prasad Mookerjee Port, Kolkata for operation and management. 
      • This integration is expected to streamline cargo movement between ports and inland waterways.
  • Digitisation and Centralised Database
    • A centralised portal is being developed for the registration of inland vessels and crew, similar to the ‘Vahan’ and ‘Sarathi’ systems used for road transport. This initiative will:
      • Simplify registration processes
      • Provide real-time data on vessel and crew availability
      • Enhance transparency and planning in the sector
    • To boost Ease of Doing Business, IWAI launched digital tools like Least Available Depth Information System (LADIS), River Information System (RIS), Car-D, Portal for Navigational Information (PANI), and Management Information and Reporting Solution (MIRS). Green initiatives such as Hybrid Electric Catamarans and Hydrogen Vessels are being introduced to reduce pollution and promote river tourism.
  • Cargo Aggregation Infrastructure
    • To resolve issues related to sparse industrial presence along waterways, cargo aggregation hubs are under development:
      • Freight Village at Varanasi
      • Integrated Cluster-cum-Logistics Park at Sahibganj
    • The National Highways Logistics Management Limited (NHLML) and Indian Port and Rail Company Ltd. have been engaged to develop and provide rail connectivity to these logistics hubs.
  • Indo-Bangladesh Protocol Route Operationalisation
    • Routes No. 5 & 6 between Maia and Sultanganj have been successfully trialled under the Indo-Bangladesh Protocol. Regular operations will commence following consent from the Government of Bangladesh.
  • Engagement with Public Sector Undertakings (PSUs)
    • More than 140 PSUs have been engaged to explore shifting a portion of their cargo to IWT. Ministries including Petroleum, Fertiliser, Coal, Steel, and Heavy Industries have been requested to align their cargo movement plans with the modal shift targets of the Maritime India Vision.
  •  Infrastructure Development
    • Construction of multimodal terminals (Varanasi, Sahibganj, Haldia).
    • Deployment of modern river information systems and digital navigation aids.
    • Dredging and channel marking to maintain navigability.
    • Promotion of Ro-Ro and Ro-Pax vessels to integrate with coastal and road transport.
      • Fairway Maintenance: Ongoing river training, dredging, channel marking, and surveys on National Waterways (NWs) to maintain a 35/45 m width and depths of 2.0 to 3.0 meters for vessel navigation.
      • NW-1 (Ganga River): 49 community jetties, 20 floating terminals, 3 Multi-Modal Terminals (MMTs), and 1 Inter-Modal Terminal (IMT) built, along with 5 pre-existing terminals.
      • NW-2 (Brahmaputra River): 12 floating terminals, MMTs at Pandu, Jogighopa, and terminals at Bogibeel and Dhubri for river cargo/cruise vessels. 4 dedicated jetties constructed at Jogighopa, Pandu, Biswanath Ghat, and Neamati.
      • NW-3 (West Coast Canal, Kerala): 9 permanent terminals with godowns and 2 Ro-Ro terminals constructed.
      • NW-68 (Goa): 3 floating concrete jetties in 2020, 1 in 2022 installed in Mandovi River.
      • NW-4 (Krishna River, Andhra Pradesh): 4 tourist jetties commissioned.
      • Other Projects: 12 Nos. floating jetties on NW-110 (River Yamuna) in Mathura-Vrindavan stretch in Uttar Pradesh, 2 Jetties on NW-73 (River Narmada) & 2 Jetties on NW-37 (River Gandak) in Bihar are under execution.

Inland Water Transport holds immense potential to transform India’s logistics landscape through reduced costs, greener transport, and enhanced multimodal connectivity. With supportive policies like the Jal Marg Vikas Project, Jalvahak scheme, and Inland Vessels Act, India is moving towards a more sustainable and integrated transport system. However, to realize the full potential of IWT, challenges related to infrastructure gaps, commercial viability, environmental sustainability, and coordination must be addressed through long-term planning, private investment, digitization, and global best practices. A robust IWT system will not only ease pressure on road and rail but also unlock economic growth in hinterland and remote regions.

GS-3 Mains Question 

1. Discuss the significance of Inland Water Transport in India’s multimodal logistics framework. Highlight the steps taken by the government to enhance IWT infrastructure.(10 marks, 150 words)

2. Inland Water Transport is the most energy-efficient but least utilized mode of transport in India. Examine the reasons for its underperformance and suggest measures to improve its modal share.(15 marks, 250 words)

3. Evaluate the role of Inland Waterways in promoting sustainable development and inclusive growth in India.(10 marks, 150 words)

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