India's Inland Waterways Growth: Impact on Logistics Costs

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Cargo movement on India's inland waterways has increased significantly, reducing freight costs and improving logistics through new waterways infrastructure.


Cargo on India's Waterways Just Grew 12x — Sector-wise Implications

📌 Source: Press Information Bureau (PIB), Ministry of Ports, Shipping and Waterways | Date: 21 July 2026

Ask any exporter what eats into their margins and "logistics cost" comes up fast. Road freight is expensive, rail has capacity limits on certain routes, and for years India's rivers sat there as an underused, cheaper alternative. That's finally starting to change — and the numbers just tabled in the Rajya Sabha show how much.

Cargo movement on India's National Waterways has grown from 18 Million Metric Tonnes in 2013–14 to 218 Million Metric Tonnes in 2025–26. That's more than a twelve-fold jump. Behind it is a mix of new terminals, a tonnage tax extension, a fresh incentive scheme for cargo owners, and a digital backbone tying waterways into the rest of India's freight network.

This isn't a standalone waterways update either — it comes bundled with the government's answer to a question that matters more than most people realise: is moving cargo by river actually cheaper and cleaner than road or rail? The data says yes, by a wide margin.

✅ Key Highlight: Inland Water Transport costs ₹1.06 per tonne-kilometre, compared to ₹1.36 for rail and ₹2.50 for road — while emitting far less air and noise pollution than road transport, making it the cheapest and cleanest bulk cargo mode available in India today.

📋 Inland Waterways — At a Glance

Point Detail
📈 Cargo Growth 18 MMT (2013–14) → 218 MMT (2025–26)
💰 Freight Cost Comparison IWT ₹1.06/TKm vs Rail ₹1.36/TKm vs Road ₹2.50/TKm
🌱 Emissions Waterways GHG emissions on par with rail, roughly 5x lower than road
💵 Total NW Funding (2022–23 to 2025–26) ₹514.77 cr → ₹969.63 cr → ₹1,083.70 cr → ₹1,074.48 cr (unaudited)
🖥️ Digital Backbone Maritime Single Window (Sagar Setu) linked with Railways' FOIS, road's ULIP, and Customs' ICEGATE
🚢 Coastal Shipping Act, 2025 In force since 15 March 2026 — new regulatory framework for coastal shipping
🎯 2047 Target Raise Inland Waterways + Coastal Shipping share of freight from 6% to 12%

Based on the available cost data, inland waterways now offer the lowest freight cost for most bulk cargo movements in India.

✅ What This Means — Breakdown for the Logistics Chain

📦 Exporters and Cargo Owners — The Jalvahak Scheme now offers a 35% incentive for cargo movement on NW-1, NW-2, and the Indo-Bangladesh Protocol route via Inland & Coastal Shipping Limited, backed by a ₹95.42 crore outlay over three years. Combine that with IWT's lower per-tonne-kilometre cost, and bulk cargo owners on these corridors have a genuine reason to shift volume off congested highways.

Example:  A rice exporter in West Bengal shipping cargo to Bangladesh may find inland waterways more economical for the domestic leg of the journey where suitable terminals and vessel services are available.

🚢 Vessel Operators and Investors — The tonnage tax extension to inland vessels registered under the Indian Vessels Act, 2021, plus the newly notified National Waterways (Construction of Jetties/Terminals) Regulations, 2025, together lower the financial and regulatory barriers for private companies looking to build terminal infrastructure or run cargo vessels. Tonnage tax in particular means operators are taxed on vessel size, not fluctuating profits — a more predictable cost base for anyone planning long-term fleet investment.

Example:  A logistics company planning barge operations on National Waterway-1 could benefit from the extended tax incentives while evaluating long-term fleet expansion

🏭 PSUs and Bulk Industries — More than 140 PSUs have been directly approached to plan a shift of their cargo movement to inland waterways, with the Ministries of Petroleum & Natural Gas, Co-operation, Fertiliser, Food & Public Distribution, Heavy Industries, Steel, and Coal specifically asked to earmark cargo volumes for IWT. If you supply into or transport for any of these sectors, expect waterway-linked logistics options to become more relevant to your routing decisions.

Example: A fertiliser manufacturer importing raw materials through an eastern port may reduce road dependence by using inland waterways where multimodal infrastructure is available.

🏗️ States with Active Waterways — Assam, Uttar Pradesh, West Bengal, Bihar, Jharkhand, Kerala, Goa, Gujarat, and Odisha all have operational National Waterways with dedicated infrastructure spend. NW-1 alone (the Ganga–Bhagirathi–Hooghly system) has added 66 community jetties, 20 floating terminals, 3 Multi-Modal Terminals, 1 Inter-Modal Terminal, and 4 Ro-Pax terminals under the Jal Marg Vikas Project, which received ₹616.27 crore in 2025–26 alone — the single largest allocation among all National Waterways.

Example: A steel producer in Jharkhand supplying cargo through Haldia Port may evaluate inland waterways for part of the transport route if terminal connectivity is commercially viable.

🖥️ Digital Compliance — Two new digital systems matter here. Jalyan & Navic, modelled on the Vahan and Sarathi portals for road vehicles, centralises vessel and crew registration nationwide. The CAR-D (Cargo Data) Portal, run by the Inland Waterways Authority of India, collects and analyses cargo and cruise movement data across all National Waterways — giving both regulators and cargo owners better visibility into what's actually moving where.

💰 National Waterways Funding, Year by Year

Year Total Allocation (₹ Crore)
2022–23 514.77
2023–24 969.63
2024–25 1,083.70
2025–26 (Unaudited) 1,074.48
💡 Why It Matters: A 12x jump in waterway cargo volume over a decade isn't a fluke — The improvement reflects several years of investment in waterways, terminals and digital logistics systems rather than a single policy decision, a cheaper freight rate than both road and rail, and a policy push to actually get PSUs and private cargo owners to use it. With the Coastal Shipping Act, 2025 now in force and the Union Budget 2026–27 targeting a doubling of Inland Waterways and Coastal Shipping's freight share to 12% by 2047, this segment is shifting from a niche transport mode to a genuine cost-saving lever for anyone moving bulk cargo across river-connected states.

For exporters and logistics planners, the practical question now isn't whether waterways are viable — the freight cost data settles that. It's whether your supply chain touches a state with an operational National Waterway, and whether the Jalvahak incentive or Coastal Cargo Promotion Scheme applies to your route. Given the digital integration now underway between Sagar Setu, FOIS, ULIP, and ICEGATE, tracking a shipment across modes is also getting easier — worth checking before defaulting to road freight by habit.

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Frequently Asked Questions (FAQs)

1.How does the Jalvahak Scheme interact with existing freight subsidies offered by state governments?
The scheme operates independently of state incentives. Businesses should evaluate whether both benefits can be combined under applicable guidelines while calculating total logistics costs.

2.Will inland waterways reduce logistics costs for all cargo categories?
No. Waterways generally provide greater savings for bulk, low-value, high-volume cargo. Time-sensitive or high-value goods may still favour road or rail depending on delivery requirements.

3.What operational factors should exporters assess before shifting cargo to waterways?
Exporters should review terminal availability, vessel schedules, first-mile and last-mile connectivity, cargo handling infrastructure, seasonal navigability and total transit time before redesigning supply chains.

4.Which industries are most likely to benefit from India's inland waterways expansion?
Bulk commodity sectors such as coal, cement, fertilisers, steel, food grains, construction materials, fly ash and petroleum products generally have the greatest potential because transport cost forms a larger share of their overall supply chain expenses

5.How can companies estimate whether a multimodal route is commercially viable?
Businesses should compare total landed logistics costs, including loading, unloading, storage, insurance, handling charges, transit time and inventory carrying costs instead of comparing freight rates alone.

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Disclaimer: All information in this post is sourced from the official PIB press release dated 21 July 2026 (Release ID: 2286975), Ministry of Ports, Shipping and Waterways, Government of India, based on information tabled in the Rajya Sabha by Union Minister Shri Sarbananda Sonowal. This post is for informational and awareness purposes only.