Inland Water Transport Key to Reducing India's Logistics Cost
It is a universally acknowledged fact that the logistics cost in India is one of the highest among major countries –as per the reports it is 18% in India versus 8-10% in China and 10-12% in European Union. The statistics in the logistics industry shows that between FY15-FY17, logistics expenditure in India ranged between 13-15 percent of the nominal GDP — in relation to an average of 8 percent across G8 nations. A study by Assocham-Resurgent India (2016) stated that the country can save $50 billion if logistics costs reduce from 14 per cent to 9 per cent of GDP. Reduced logistics costs would bring down prices of products.
Transportation services form a third of the cost of a logistics chain. Improving transportation would require the coordinated development of railways, roads and waterways. As per the World Bank report, India's freight movement traverses mainly on roads (65%). Railways come next (27%); waterways account for just 0.5% of the movement.
Despite having an extensive network of inland waterways in the form of rivers, canals, backwaters and creeks; and several advantages of Inland Water Transport, freight transport by inland waterways is highly underutilised in India compared to other large countries. The total cargo moved by inland waterways is just 0.15% of the total inland traffic in India, compared to the corresponding figures of 20% for Germany and 32% for Bangladesh.
Inland Water Transport advantages are several. Among all the transport modes, it is the least capital-intensive, is environment-friendly, can supplement rail and road transport, help in the decongestion of roads, has least fuel consumption per tonne-km, is best suited to carry over-dimensional cargo (ODC), requires the minimum land acquisition and has low infrastructure costs.
India has a large network of water bodies in the form of rivers, canals, backwaters, and creeks. The total navigable length is 14,500 km, out of which about 5,200 km of the river and 4,000 km of canals can be used by mechanized crafts. These long waterways provide a good mode of transport across the cities as well as towns, like backwaters of Kerala, Canals in Gujarat and few waterways in Goa, West Bengal, and Assam. Still, these inland waterways are un-utilized in India as compare to other countries in the world.
Transporting freight via waterways is much cheaper and greener than using road and rail. According to the World Bank, which is financing the National Waterway Project, the cost to transport one tonne of freight over one km for highways is Rs 2.28. It is Rs 1.41 for railways and Rs 1.19 for waterways. As per RITES Report of 2014 on 'Integrated National Waterways Transportation Grid', one litre of fuel moves 24 tonnes-km by road, 95 tonnes-km on the rail and 215 tonnes-km on Inland Water Transport (IWT).
Waterways have the potential to revolutionise transport and are receiving significant attention in recent times. The government believes that waterways transport can contribute at least two per cent to the country's GDP. Developing the waterways is the top priority of the Government. The current central government has taken several initiative and policy decisions aimed at promoting the domestic movement of cargo utilizing Inland waterways.
Jal Marg Vikas Project: The Jal Marg Vikas Project (JMVP) was approved in January 2017 for capacity augmentation of navigation on NW-1. The project is being implemented by the Government of India with technical and investment assistance of the world bank.
The project aims to enable commercial navigation of vessels with a capacity of 1500-2000 tons on NW1. It includes the development of fairway, multi-modal terminals at Varanasi, Haldia and Sahibganj, modern River Information System (RIS), strong river navigation system, Digital Global Positioning System (DGPS), night navigation facilities, construction of navigational lock at Farakka. It will result in environment-friendly, fuel-efficient and cost-effective alternative mode of transportation, especially for bulk, hazardous goods and over-dimensional cargo.
Sagar Mala Project: Sagarmala Programme is an initiative of the Government of India to enhance the performance of the logistics sector in India. The programme envisages unlocking the potential of waterways and coastline, to minimize infrastructural investments required to meet these targets. The programme aims to reduce the logistics costs by doubling the share of domestic waterways in the modal mix from the current 6 per cent.
Rivers Inter Linking Project: The Indian Rivers Inter-link aims to link India's rivers by a network of reservoirs and canals and so reduce persistent floods in some parts and water shortages in other parts of India. Beyond water security, the project is also seen to offer potential benefits to transport infrastructure through navigation.
Roll-on & Roll-off (“Ro-Ro”) Waterways Projects: This project comprises of Ro-Ro ships/vessels which are designed to carry wheeled cargo, such as cars, trucks, semi-trailer trucks, trailers and railroad cars that are driven on and off the ship on their wheels or using a platform vehicle.
National Waterways Act, 2016: Under Entry 24 of the Union List of the Seventh Schedule of the Constitution, the Central Government can make laws on shipping and navigation on inland waterways which are classified as National Waterways by Parliament by law.
The Act merges five existing Acts which have declared the 5 National Waterways. It has declared 106 Waterways as NWs through a single piece of legislation, in addition to the existing five NWs. The Inland Waterways Authority of India (IWAI)which is mandated to develop, maintain and regulate these for navigation would be the nodal agency.
First Five Proposed National Waterways
National Waterway 1: Varanasi–Haldia stretch of the Ganges–Bhagirathi–Hooghly river system having a length of 1620km with expected cargo movement of 4 million tonnes.
National Waterway 2: Sadiya — Dhubri stretch of Brahmaputra river system having a length of 891km with expected cargo movement of 2 million tonnes.
National Waterway 3: Kozhikode-Kollam stretch of the West Coast Canal, Champakara Canal and Udyogmandal Canal having a length of 205km with expected cargo movement of 1 million tonnes.
National Waterway 4: Kakinada-Puducherry stretch of canals and the Kaluvelly Tank, Bhadrachalam – Rajahmundry stretch of River Godavari and Wazirabad – Vijayawada stretch of River Krishna having a length of 1095km.
National Waterway 5: Talcher–Dhamra stretch of the Brahmani River, the Geonkhali – Charbatia stretch of the East Coast Canal, the Charbatia–Dhamra stretch of Matai river and the Mangalgadi – Paradip stretch of the Mahanadi River Delta having a length of 623km
Current Issue
02-2026
