Indian Government Plans New Financial Incentives To Expand Cargo Shipping On Inland Waterways

In a bid to push the use of the country’s inland waterways network, the Indian government plans to provide financial support for the movement of goods via rivers and backwaters, reports Economic Times.

This initiative is part of a broader effort to encourage greater use of these waterways for cargo transport.

The plan includes an initial scheme that offers up to a 35 per cent discount on transportation invoices.

This discount will be provided by a subsidiary of the state-run Shipping Corporation of India, with the government covering the revenue loss incurred by the company.

"This scheme has been designed after feedback from stakeholders that recently used national waterways 1, 2 and 16 to transport goods," one of the officials said.

The incentive will make waterway movement on those routes comparable to road transport,” an official stated, as per the report.

The first phase will focus on inland waterways on the Ganga, Brahmaputra, and Barak rivers.

Currently, India has 111 designated national waterways stretching over 22,000 km across 24 states.

Officials estimate that this mode offers the lowest freight costs compared to rail and road transport and is also cleaner. However, the costs associated with loading and unloading vessels remain a challenge to the mode's viability.

National Waterway 1 (NW1) is the longest, stretching 1,620 km through Uttar Pradesh, Bihar, Jharkhand, and West Bengal along the Ganga, Bhagirathi, and Hooghly rivers.

National Waterway 2 (NW2) is the second longest, covering 891 km on the Brahmaputra River.

Utilising these waterways for cargo movement is also expected to ease congestion on rail and road networks.

In October of the previous year, the government also announced a Rs 715,200 crore investment plan to improve cargo transport on inland waterways, aiming to increase cargo volume by 400 per cent to 500 million tonnes annually by 2047.

Additionally, a Rs 12,000 crore project on the Brahmani River in Odisha (NW5) is being prepared to facilitate the transport of goods from four industrial clusters to the Paradip and Dhamra ports.