India's Inland Waterways: Potential & Challenges

Inland waterways in India have the potential to reduce logistics costs and delivery time for goods. The volume of goods shipped through inland waterways is steadily increasing but remains below capacity. There are multiple challenges for the sector, and if the government really wants the sector to blossom, it needs to make the inland waterways ecosystem more attractive for the private sector.

India is geographically a vast and diverse country, ranked seventh in the world by area. Many regions of the country are still not well connected by major rail and road networks. Nonetheless, regions in the northeast of the country have several rivers, and these can be used to navigate freight vessels. Transporting goods through inland waterways is cheaper compared to other options. Since India already spends 8.35% of its GDP on logistics according to the National Council of Applied Economic Research (NCAER), any further savings in cost will benefit all the stakeholders in the value chain.

If we compare the cost of freight for rail, road and inland waterways, the cost of freight per km for surface transport is lowest in inland waterways transport. This was validated in a study conducted by Rail India Technical and Economic Service (RITES), an engineering consultancy corporation, specializing in the field of transport infrastructure.

India’s Inland Waterways: Essential Data

The total cargo movement through inland waterways, for the financial year 2020-21, in India stood at 881.40 lakh metric tons. To put things into perspective, major Indian ports reported 7,193.80 lakh metric tons of traffic movement in 2021-22. When we compare inland waterways and ocean freight, the former is 12.25 percent (approximately 1/8th) of the latter.

As per data provided by various state governments, the total length of rivers, canals and lakes in India is 34,195.30 km. Out of this, only 43.43 percent, i.e., 14,850.15 km is navigable.

‍India’s Inland Waterways: Major Challenges

The inland waterways in India have huge economic potential. Governments, at both the central and state levels, have been trying to integrate the waterways to the supply chain ecosystem. Due to various policy measures, the quantity of goods moved through the inland waterways is increasing every year.

Factors like shallow water, narrow width during dry weather, siltation and bank erosion, inadequate vertical and horizontal clearances in a large number of overhead structures make navigation throughout the year a daunting task.

The challenges faced by the inland waterways sector are as follows:

• ‍Availability of year-round depth for vessel navigation: The water levels in Indian rivers do not remain constant throughout the year. Almost all the rivers in India get flooded during the monsoon. This leads to high levels of sedimentation and requires dredging. While, during summers, the inland waterways dry up.
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• ‍Absence of SEZs and storage facilities along the waterways: At present, the production and warehouse infrastructure in India is configured to takethe advantages of rail, road, and seaport infrastructure. To make the inland waterways attractive to the industry, the government needs to become more flexible with project clearances near the riverbeds. A right balance between economic benefits and ecological impact must be sought.
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• ‍Standardization of inland waterway governance framework: Major National Waterway (NW) routes may cross multiple states. Let us take the example of NW 1, Allahabad-Haldia stretch (1620 kms) of Ganga-Bhagirathi-Hooghly River system, which is major waterways in India. It crosses through four states, and not all these states have identical inland waterways governance framework. Multiplicity of regulations and additional paperwork make it less attractive for the big industries to move their goods through inland waterways.
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• Possible hindrances created by the trucking industry: Though this point may sound academic, it may not be too far from the reality. Trucks move a large proportion of goods within the country; their only real competition is the railways. In case of almost all the goods, the last mile delivery is through trucks of all shapes and sizes.
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• Better hauling capacity of locomotives and dedicated freight corridors: Over the years Indian Railways (IR) has been ramping up the capacity of locomotives that haul goods trains. By commissioning dedicated railway lines for goods transport, the railway freight sector has received considerable amount of investment.  
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• Limited number of vessels and poor maintenance: Due to lack of economic viability, the private sector has always given a lukewarm response to government initiatives. This leads to less-than-ideal maintenance of current facilities and negligible capacity augmentation.

‍India- Bangladesh Trade Through Inland Waterways

In a recently published report of the Ministry of Ports, Shipping & Waterways Research Wing, movement of cargo along India Bangladesh route of National Waterways (NW) I by Indian registered vessels have shown a growth of 3.98% in year 2020-21 over that in 2019-20. The cargo moved over this route has increased to 35.97 lakh metric tons in 2020-21 against 34.60 lakh metric tons in 2019-20.

In July, Maersk completed the first India-Bangladesh cross-border logistics of containerized cargo using the inland waterways of the Indo-Bangladesh Protocol Route for Coca-Cola. It transported 50 containers (TEUs or Twenty Feet Equivalent Units) from Kolkata in India to a river port near Dhaka in Bangladesh on a barge on the National Waterways 1.