Water transport in India

Water transport is the cheapest and the oldest mode of transport. It operates on a natural track and hence does not require huge capital investment in the construction and maintenance of its track except in case of canals. The cost of operation of water transport is also very less. It has the largest carrying capacity and is most suitable for carrying bulky goods over long distances. It has played a very significant role in bringing different parts of the world closer and is indispensable to foreign trade.

Kinds of Water Transport:

Water transport consists of:

  1. Inland water transport
  2. Ocean transport:

Inland water transport

They are artificial waterways made for the purpose of irrigation or navigation or both. Canal transport requires a huge amount of capital investment in construction and maintenance of its track i.e., the artificial waterways. The cost of the canal transport is, therefore, higher than that of river transport. To add to it, the cost of providing water for the canals is also a very big problem of canal transport.


1. Low Cost:

Rivers are a natural highway which does not require any cost of construction and maintenance. Even the cost of construction and maintenance of canals is much less or they are used, not only for transport purposes but also for irrigation, etc. Moreover, the cost of operation of the inland water transport is very low. Thus, it is the cheapest mode of transport for carrying goods from one place to another.

2. Larger Capacity:

It can carry much larger quantities of heavy and bulky goods such as coal, and, timber etc.

3. Flexible Service:

It provides much more flexible service than railways and can be adjusted to individual requirements.

4. Safety:

The risks of accidents and breakdowns, in this form of transport, are minimum as compared to any other form of transport.


1. Slow:

Speed of Inland water transport is very slow and therefore this mode of transport is unsuitable where time is an important factor.

2. Limited Area of Operation:

It can be used only in a limited area which is served by deep canals and rivers.

3. Seasonal Character:

Rivers and canals cannot be operated for transportation throughout the year as water may freeze during winter or water level may go very much down during summer.

4. Unreliable:

The inland water transport by rivers is unreliable. Sometimes the river changes its course which causes dislocation in the normal route of the trade.

5. Unsuitable for Small Business:

Inland water transport by rivers and canals is not suitable for small traders, as it takes normally a longer time to carry goods from one place to another through this form of transport.

Ocean transport:

Ocean transport is indispensable for foreign trade. It has brought the different parts of the world closer and has knitted together all the nations of the world into one big world market. It operates on a natural track, i.e., the sea and does not require any investment in the construction and maintenance of its track. It is, obviously, the cheapest mode of transport.

Ocean transport includes:

  1. Coastal Shipping
  2. Overseas Shipping

1. Coastal Shipping:

It is one of the most important means of transport for carrying goods from one part to another in a country. It is a cheaper and quicker mode of transport and is most suitable for carrying heavy, bulky and cheap traffic like coal, iron ore, etc. to distant places. But it can serve only limited areas. Earlier, coastal shipping in India was mainly in the hands of foreign shipping companies. But now from 1951 onwards, it is exclusively reserved for Indian ships.

2. Overseas Shipping:

There are three types of vessels employed in the overseas shipping:

(i) Liners,

(ii) Tramps,

(iii) Tankers.

 (i) Liners:

Liners are the ships which have regular fixed routes, time and charges. They are, usually, a collection of vessels under one ownership, i.e., a fleet. They provide a uniform and regular service. Liners sail on scheduled dates and time, whether full of cargo or not.

(ii) Tramps:

Tramps are ships which have no fixed routes. They have no set rules or rate schedule. Usually, they do not sail till they have full cargo. They can be chartered by exporters and are ready to sail anywhere and at any time. They are not as fast in speed as liners. Tramps are more suitable to carry seasonal and bulky goods.

(iii) Tankers:

Tankers are the vessels which are specially designed to carry oil, petrol and such other liquids. They have a large capacity, 2 to 3 lakh tons of oil, and very shortly, we may have super tankers with a capacity of about 10 lakh tons of oil.


  1. It operates on a natural track as sea provides a readymade ‘road bed’ for the ships to sail. Hence, it does not require huge amount of capital investment in the construction and maintenance of its track.
  2. Due to the smooth surface of sea, comparatively less tractive power is required for its operation which results in a lesser cost of operation. Thus, it is the cheapest mode of transport.
  3. It has the largest carrying capacity as compared to any other transport.
  4. The risk of damage in transit of the goods is also less as compared to other modes of transport. But the goods are exposed to the ‘perils of sea’.
  5. It is the only suitable mode of transport for carrying heavy and bulky goods to distant places.
  6. It is indispensable to foreign trade.

Water Transport India

Around 95% of India’s trading by volume and 70% by value is done through maritime transport.

India has 12 major and 205 notified minor and intermediate ports. Under the National Perspective Plan for Sagarmala, six new mega ports will be developed in the country.

Foreign Direct Investment (FDI) of up to 100% under the automatic route for port and harbour construction and maintenance projects. It has also facilitated a 10-year tax holiday to enterprises that develop, maintain and operate ports, inland waterways and inland ports.

India’s key ports had a capacity of 1,534.91 million tonnes per annum (MTPA) in FY20. In FY21, all key ports in India handled 672.60 million tonnes (MT) of cargo traffic.

Merchandise exports reached US$ 255.92 billion in FY21 (until February 2021).

  • India is expected to begin full operations in Iran’s Chabahar Port by the end of May 2021. India is building two terminals at the port and will operate them for 10 years
  • In Union Budget 2020-21, the total allocation for the Ministry of Shipping was Rs. 1,702.35 crore (US$ 233.48 million).
  • The Finance Minister proposed to double the ship recycling capacity of ~4.5 million light displacement tonnes (LDT) by 2024; this is expected to generate an additional ~1.5 lakh employment opportunities in India.
  • In Union Budget 2021, the government announced subsidy funding worth Rs. 1,624 crore (US$ 222.74 million) to Indian shipping companies to encourage merchant ship flagging in the country.
  • in February 2021, the Major Port Authorities Bill, 2020 was passed by the Parliament of India. The bill aims to decentralise decision-making and reinforce excellence in major port governance.

Major Ports Authorities Bill 2020

  1. The Bill provides for the regulation of major ports and will replace the Major Port Trusts Act of 1963,
  2. The Bill will apply to the major ports of
    1. Chennai,
    2. Cochin,
    3. Jawaharlal Nehru Port,
    4. Kandla,
    5. Kolkata,
    6. Mumbai,
    7. New Mangalore,
    8. Mormugao,
    9. Paradip,
    10. VO Chidambaranar
    11. Vishakhapatnam.
  3. The Bill provides for the creation of a Board of Major Port Authority for each major port. It will replace the port Port trust provided by the former act. It will have a member each from the state governments, the Railways Ministry, the defense ministry, and the customs department.
  4. Board will have financial power – To meet its capital and working expenditure requirements, the Board may raise loans from any scheduled bank or financial institution within India, or any financial institution outside India.
  5. The Board will determine these rates for services that will be performed at ports. At present, the Tariff Authority for Major Ports fixes the scale of rates for assets and services available at ports.
  6. Under the new Bill, any person contravening any provision of the Bill or any rules or regulations will be punished with a fine of up to Rs one lakh.

Challenges faced in respect of existing ports include

  1. inadequate road networks within the port area,
  2. inadequate cargo-handling equipment and machinery,
  3. inefficiency due to poor hinterland connectivity through rail, road, highways, coastal shipping and inland waterways,
  4. inadequate navigational aids, facilities and IT systems,
  5. insufficient dredging capacity,
  6. lack of technical expertise and
  7. a lack of equipment for handling large volumes.
  8. The turnaround time at ports in India therefore remains abysmal.

Government initiatives
1. Sagarmala program
It focuses on modernizing and developing ports, enhancing port connectivity, supporting coastal communities, and stimulating port-linked industrialization. Sagarmala aims
to reduce the logistics costs for foreign and domestic trade. It also aims to double the share of water transportation in the modal mix.

1.     Jal Marg Vikas project

Jal Marg Vikas Project (JMVP) is a project for the development of National Waterways in India. JMVP was implemented as an initiative towards national integration with an aim to reduce rail and road congestion, carbon footprint, and minimal resource depletion.

2.     Central Road and Infrastructure Fund

The Ministry of Finance has amended the Central Road Fund Act, 2000 to include a list of projects and infrastructure sub-sectors, including inland waterways, for which the CRF could be used. The CRF has since been renamed the Central Road and Infrastructure Fund.

Way forward

The government needs to open up the dredging market to attract more players, particularly international players, in dredging activities to increase and maintain draft depth at ports to attract large vessels and enable them to become hub ports.

Expedite the completion of various projects under Sagarmala, especially those aimed at improving port connectivity, setting up coastal economic zones (CEZs), and establishing new ports.

Financing for inland vessels could be made part of priority sector lending by banks.

The setting up of a single-window facility for cargo clearance and putting in place fully mechanized cargo handling infrastructure will be critical to increase throughput.

Enhance technology use in ports and, wherever feasible, draw lessons from successful global ports such as Rotterdam, Felixstowe, and Singapore to improve efficiency.

Inland transport

  • As per the National Waterways Act, 2016, 111 have been declared as National Waterways (NW)
  • These waterways pass through 24 states and two union territories, with an approximate total length of 20274 km
  • These proposed waterways will pass through nearly 138 river systems, creeks, estuaries and related canal systems of India.

Advantages of Inland Waterways:

  1. Cost savings:
  2. Fuel and Energy Efficient: It is fuel-efficient compared to the other modes of transport, rail and road. For example, the Integrated National Waterways Transportation Grid Study states that one litre of fuel will move 24 tons through one kilometre on road, 85 on rail and 105 km on inland water transport. Further, 1 HP can 150 kg on road, 500 kg on rail and 4000 kg on water.
  3. Cost of developing waterways is much lower than rail & road.
  4. Reduces transportation and transition losses
  5. Environment Friendly:
  6. Least fuel consumption per tonne‐km
  7. Carbon dioxide emission is 50% of trucks
  8. Negligible land requirement as compared to rail and road transport
  9. Supplementary Mode:
  10. Reduces pressure on road and rail
  11. Reduces congestion and accidents on road
  12. Optimal Modal Mix:It will provide optimal modal mix by converging river transport with other modes
  13. Better connectivity:It help create seamless interconnectivity connecting hinterlands along navigable river coasts and coastal routes. Further, riverine routes are likely to play a crucial role in connecting the north-eastern states to the mainland
  14. Inland Waterways hold huge potential for domestic cargo transport, cruise, tourism and passenger traffic.
  15. Development of inland waterways will help in the generation of job opportunities

Disadvantages of Inland waterways:

  1. Inland waterways have low transport speedthus not suitable where time is an important factor
  2. It has limited area of operation, depending on the infrastructural premises and depth of the waterways
  3. There are only very few casesin which Inland water transport (IWT) can offer door-to-door transport of cargo
  4. Operational disruptionsdue to weatheris a major disadvantage


1.The Inland Waterways Authority of India Act, 1985:

The Act provides for the constitution of an Authority for the regulation and development of inland waterways for purposes of shipping and navigation and for matters related to it

The Inland Waterways Authority of India was formed in 1986. It undertakes projects for development and maintenance of IWT infrastructure on national waterways through grant received from Ministry of Shipping

  1. Indian Vessels Act of 1917 (amended in 2007): It deals with the survey and registration of inland vessels, removal of obstructions in navigation, carriage of goods and passengers, prevention and control of pollution etc.
  2. Inland Water Transport Policy 2001:Policy talks about IWT being economic, fuel-efficient and environment friendly mode of transport. It advocates large-scale private sector participation both for creation of infrastructure and for fleet operations.
  3. National Waterways Act 2016

The Act declared 111 rivers or river stretches, creeks, estuaries as National (inland) Waterways.

It enables the Central Government to regulate these waterways for development with regard to shipping, navigation and transport through mechanically propelled vessels.

5.Laws related to environmental and other impacts:

Forest Act 1980,

Environmental Protection Act 1986 and various notifications under it like EIA Notification 2006, CRZ Notification 2011


  1. Jal Marg Vikas Project: Jal Marg Vikas Project (JMVP) aims at capacity augmentation of navigation on National Waterway-1 (NW-1).The project is being implemented by GOI with technical assistance and investment support of the World Bank.
  2. Sagarmala Project: Along with development of coast shipping routes, the project seeks to inland waterways to drive industrial development. It aims to reduce the logistics costs by doubling the share of domestic waterways in the modal mix from current 6 per cent (PIB)
  3. Interlinking of Rivers Programme: The project is expected to offer potential benefits to the transport sector through navigation.

Issues and Challenges

    1. Cost estimation: In respect to operating costs per ton-km, IWT has lower cost than rail and road transport. However, this cost argument is challengeable. There are two factors which distinguishes how freight moves on land versus on water: i) A road travels straight while rivers bend and curve; therefore the difference between freight costs for IWT and road/ railways is not much ii) Cost of loading and unloading freight
  1. Inadequate depth:To be viable for a navigable inland waterway, river needs enough depth throughout the year However, in their natural state; many Indian rivers simply do not have that level of water which will necessitate extensive dredging. Moreover, Indian rivers (especially rivers in the northern plains) face severe problems of siltation round the year
  2. Impact on other activities: Water in rivers has competing demands, including dams and farming. To maintain the water levels in the river to the degree needed for them to function as inland waterways, the water use for such other activities might get curbed.
  3. Inadequate Air Draft: Multiple bridges with low vertical clearance obstruct the passage of bigger inland water transport vessels on many inland waterways such as NW 3
  4. Lack of night navigation infrastructure: Rudimentary night navigational facilities and markings are also a major issue.
  5. Shortage of IWT vessels: Vessel building is highly capital intensive and faces difficulties in obtaining project finance from banks and financial institutions.
  6. Shortage of MRO facilities: There is severe shortage of MRO (Maintenance, Repair and Overhaul) facilities for IWT vessels.
  7. Inadequate industries: Inadequate number of Industrial units on the riverside, especially not along the Brahmaputra is a major discouragement hindering development of inland waterways. At National Policy Dialogue on transboundary cooperation related to the Ganga and the Brahmaputra rivers – states, it was highlighted that due to inadequate industrial units result in no cargo commitments by the private players
  8. Lack of funds: Dredging as well as infrastructure for IWT requires huge investments. However, both public and private funding in the sector is low
  9. Environmental Impact:

Dredging operations will damage river bed, and can lead to change in habitats for various aquatic flora and fauna.

Dredging may also impact aquifers along the river, damaging the ability of water to percolate underground.

In estuaries and creeks of rivers the removal of river bed material during capital dredging can result in the ingress of excess saline water into the creek or rivers. This is one of the reasons why the state of Kerala had opposed many of its proposed waterways

Construction of jetties, river ports will necessitate removal of trees/ mangrove forests in the area. For example, At Dharamtar port in NW10, for construction of a jetty, the mangrove forest belt on the bank has been removed

Other environmental concerns include pollution due to oil and diesel from vessels, leakage and spilling of cargo

Note: Dredging is an excavation or digging activity carried out underwater that removes rock, mud, silt, sediments etc. from the bottom of the river bed or other water bodies. Dredging is used to dig and create a channel in the river bed of the required depth.

11.Social impact:

Ecological impacts can have implications for livelihoods of people dependent on the rivers and creeks. For example: impact on fishing community, people dependent on riverbed cultivation

Displacement is another major concern as land is needed for number of facilities like ports, jetties, and other infrastructure.

NITI Aayog Recommendations (Action Agenda, Three-Year2017-2020)

1.Streamline the governance of inland waterways: NITI Aayog recommends streamlining the regulatory structure and bringing an overarching body to oversee Inland Water Transport such as the IWAI to more consistency in the rules and strategy of the sector.

2.Develop measures for year-round navigation:

Efforts should be made to develop deeper stretches of the river, i.e., at least 2.5 m to 3 m to achieve year-around navigation adequate maintenance of rivers, including continuous dredging to maintain adequate water depth for servicing shipping lines should be ensured

3.Ease restrictions on river-sea movement: Utilizing a single vessel for both inland and coastal waters, lowers transport costs and minimizes handling. Thus, by 2020, state authorities should draw up coordinates for inland vessel limits under the Inland Vessel Act for their coastal waters

4.Develop inland waterways transport to facilitate movement of goods to neighbouring countries and the Northeast:

By 2018, state governments should commence work on dredging and channel stabilization to create about 20 new ports in the Brahmaputra and Barak rivers.

The protocol for Inland Waterways between Bangladesh and India should be extended for at least 10 years to reduce uncertainty.