Unlocking India’s Inland Waterways Potential

Can Inland Waterways Transform India's Logistics Landscape?

By 2024-25, India witnessed inland cargo transport reach 145.5 million metric tonnes (MMT)—a sevenfold jump from just 18.07 MMT a decade earlier. Yet for all this growth, India's inland waterways account for less than 2% of domestic freight movement by volume, starkly lagging behind road (65%) and rail (27%). The government’s vision of achieving 200 MMT by 2030 and 500 MMT by 2047 seems ambitious. Whether this dream can be realized hinges on critical trade-offs between costs, infrastructure gaps, and entrenched inefficiencies in the transport sector.

The Push for National Waterways

India’s inland waterways potential is both immense and underdeveloped. The National Waterways Act, 2016 identified 111 National Waterways (NWs), leveraging a network of 17,980 km of rivers and 2,256 km of mechanized craft-friendly canals. The Inland Waterways Authority of India (IWAI), formed in 1986, is tasked with infrastructure creation and regulation of these NWs. Flagship programs like the Jal Marg Vikas Project (JMVP), focusing on NW-1 (Ganga river), promise modern terminals for containerized cargo. Meanwhile, the Jalvahak scheme incentivizes cargo owners with reimbursements of up to 35% of operating costs for hauling freight over 300 km.

The numbers underscore the urgency. With logistics costs still constituting approximately 14% of India’s GDP, versus 8-10% in industrialized nations, there’s an economic imperative to shift freight from congested and emissions-heavy roadways to cheaper, greener alternatives like waterways. Environmentally, it’s a win: pushing inland waterway transport would bring India closer to its Sustainable Development Goals (SDGs) and Paris Agreement commitments.

Why the Numbers Favor Waterways

Consider this: moving 1 tonne of freight for 1 km by road consumes about 35 gm of fuel, compared to 15 gm via rail and just 5 gm via waterways. This eco-efficiency, alongside lower operating costs, makes inland waterways a key plank in reducing India’s carbon footprint. Furthermore, riverine transport can unlock the logistical potential of regions like Bihar, Odisha, and Assam, aligning underdeveloped hinterlands with major ports and markets. Enhanced connectivity could particularly benefit MSMEs, which often face prohibitive freight costs under current systems.

Globally, there are useful precedents. The Netherlands exemplifies effective use of inland waterways for both freight and passenger traffic. With 32% of domestic freight moved via water, the country showcases how integrated multimodal systems—water pushing freight seamlessly onto rail or road—can streamline supply chains. The contrast with India is striking: fragmented governance, gaps in last-mile connectivity, and uneven state cooperation have stymied such a coordinated approach here.

The Gaps We Can’t Ignore

Despite the optimism surrounding projects like Sagarmala and JMVP, institutional and infrastructure barriers persist. Seasonal navigability remains a chronic issue for key waterways such as NW-2 (Brahmaputra). Heavy silting reduces water depth, making parts of rivers unnavigable for large vessels during the dry season. Perennial dredging is not only capital-intensive but ecologically disruptive.

The dependence on rivers for multipurpose use adds another layer of complexity. Rivers like the Ganga are burdened with demands ranging from irrigation to drinking water—subordinating their role as trade arteries. Even newer initiatives like the Inland Waterways Development Council (IWDC), convened in 2023, have yet to resolve the Centre-State coordination required for effective river management. States frequently prioritize competing uses over navigational interests.

Then there’s the entrenched dominance of road and rail freight. Decades of policy emphasis and subsidies have fortified these sectors to the point where they command both operational scale and political clout. How does an emerging sector like waterways compete against such entrenched giants? Despite incentives like the Jalvahak scheme, uptake remains tepid, especially among medium and large freight handlers wary of adapting to an untested network.

The Global Comparison Is Sobering

What makes the Netherlands model work and India’s struggle persist? The answer lies in institutional rigor and planning. The Netherlands invested heavily in river engineering, maintaining uniform channel depth and deploying effective navigational aids. Just as critical was capital backing for multimodal freight facilities, connecting inland waterways terminals directly to rail hubs and highways.

India trails behind, particularly in institutional cohesion. While IWAI operates as the nodal agency, coordination between ministries, departments, and state governments remains fragmented, stalling critical projects. Regulatory gaps that fail to enforce emission standards or operational efficiency for vessels further dilute progress.

Assessing the Road Ahead

Urgency and potential alone don’t guarantee success. Over-reliance on public funding without sufficiently engaging the private sector risks limiting growth. India's waterways policies must tackle three structural priorities: ensuring navigable depth year-round, creating end-to-end freight corridors that integrate road and rail linkages, and simplifying jurisdictional disputes over river control.

Scaling beyond pilot-level projects requires more than rhetoric. For the IWDC to succeed, it must move from primarily deliberative roles to setting enforceable benchmarks on everything from river dredging schedules to shipping cost ceilings. Without addressing implementation gaps, the government’s target of 500 MMT by 2047 risks serving as little more than institutional cheerleading.

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