Water Transport in India

• Water Transport in India has played a significant role in the country’s economy and is indispensable to foreign trade. India is endowed with an extensive network of waterways in the form of rivers, canals, backwaters, creeks and a long coastline accessible through the seas and oceans.
• It has the largest carrying capacity of any form of transport and is most suitable for carrying bulky goods over long distances.
• Water transport is the one of the cheapest modes of transport in India, as it takes advantage of natural track and does not require huge capital investment in construction and maintenance except in the case of canals.
  • Its fuel efficiency contributes to lower operating costs and reduced environmental impact due to carbon.
• India has 14,500 kilometres or 9,000 miles of inland waterways, out of which 5,685 kilometres or 3,530 miles are navigable by mechanized vessels.
• Since 1947, India has made great progress in shipping and gradually became the second largest shipping country in Asia and sixth largest in the world. Indian ships ply on most of the shipping route of the world.
• India has a 6,100 kilometres (3,790 mi)-long coastline with only 13 major ports: Mumbai, Deendayal (Kandla), Jawaharlal Nehru Port (at Nehru Seve), Marmagaon, New Mangalore and Kochi on the west coast, alongside Kolkata, Chennai, Ennore (Kamarajar), Haldia, Paradeep, Vishakhapatnam and Tuticorin on the east coast.
  • Jawaharlal Nehru Port of Mumbai has been developed as one of the major ports. It is the only fully mechanized port of India. The biggest port is Mumbai which handles largest number of ships as well as trade.
  • Kandla port in Gujarat compensates the loss of the Port of Karachi to Pakistan.
  • Vishakhapatnam is the third largest port of India. Kolkata is the largest inland port of Asia.
• Inland Waterways Authority of India has a vision to raise India’s 111 national waterway’s current cargo handling capacity from 55 MT in 2017–18 and 72 MT in 2018–19 to 100 MT by 2021–22.

Benefits of Waterways Transport

• The cost of water transport in India is roughly 50 paise a kilometre, as compared to ₹1 by railways and ₹1.5 by roads.
• Water transport has received significant attention in recent times as logistical costs in India are some of the highest among major countries – 14 percent in India versus 8-10 percent in USA and China and 10-12 percent in the European Union.
• To increase the share of waterways in inland transport, the National Waterways Act, 2016 was passed which proposed 106 additional National Waterways.
  • This has the potential to greatly reduce the cost of transportation and lower the nation’s carbon footprint by moving traffic from surface roads and railroads to waterways.
  • Prime Minister Narendra Modi launched the first Ro-Ro ferry service in Gujarat in October 2017.
• Freight transport by waterways is highly under-utilized in India compared to other large countries and geographic areas such as the United States, China and the European Union.
  • The total cargo moved (in tonne kilometres) by inland waterways was 0.1 percent of the total inland traffic in India, compared to the 21 percent figure for the United States.

Kinds of Water Transport

Water transport consists of:

1. Inland water transport
2. Ocean transport

Inland Water transport

• India’s hinterland connectivity is mainly based on road and rail with domestic waterways – both coastal shipping and inland waterways – playing a limited role.
• India has an extensive network of inland waterways in the form of rivers, canals, backwaters and creeks. The total navigable length is 14,500 km, out of which about 5,200 km of river and 4,000 km of canal can be used by mechanized crafts.
• Canals 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.
• Cargo transported in an organized manner is confined to a few waterways in Goa, West Bengal, Assam and Kerala.
• Inland waterways consist of the Ganges-Bhagirathi-Hooghly rivers, the Brahmaputra, the Barak river, the rivers in Goa, the backwaters in Kerala, inland waters in Mumbai and the deltaic regions of the Godavari-Krishna rivers.
• Advantages:
  • 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.
  • Larger Capacity:
    • It can carry much larger quantities of heavy and bulky goods such as coal, and, timber etc.
  • Flexible Service:
    • It provides much more flexible service than railways and can be adjusted to individual requirements.
  • Safety:
    • The risks of accidents and breakdowns, in this form of transport, are minimum as compared to any other form of transport.
• Disadvantages:
  • Slow:
    • Speed of Inland water transport is very slow and therefore this mode of transport is unsuitable where time is an important factor.
  • Limited Area of Operation:
    • It can be used only in a limited area which is served by deep canals and rivers.
  • 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.
  • 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.
  • 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:
  • Coastal Shipping
  • Overseas Shipping
• Coastal Shipping:
  • Transport facilities available by ship along India’s vast coastline are part of the coastal shipping system. The country has a coastline of nearly 7,517 kilometres including the coastline of Andaman & Nicobar Islands and Lakshadweep Island.
  • 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.
• Overseas Shipping:
  • There are three types of vessels employed in the overseas shipping:
    • (i) Liners,
    • (ii) Tramps,
    • (iii) Tankers.
  • 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.
  • 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.
  • 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.
• Advantages:
  • 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.
  • 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.
  • It has the largest carrying capacity as compared to any other transport.
  • 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’.
  • It is the only suitable mode of transport for carrying heavy and bulky goods to distant places.
  • It is indispensable to foreign trade.

Water Transport in India

• Around 95% of India’s trading by volume and 70% by value is done through maritime transport.
• India has 13 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.
  • The cumulative FDI equity inflow in the Port industry is US$ 1.63 billion during the period April 2000 to September 2023.
  • A 10-year tax holiday is extended to enterprises engaged in the business of developing, maintaining, and operating ports, inland waterways, and inland ports.
• India’s key ports had a capacity of 1,617 MMT in 2023. In FY22, all key ports in India handled 650.52 million tonnes (MT) of cargo traffic. In FY23 (April-January) cargo traffic handled by major stood at 646.10 million tonnes.
• India’s merchandise exports in 2022-23 were $451.07 billion, while services exports stood at $325.33 billion. Total exports amounted to $776.40 billion, 14.8 percent higher than in 2021-22.
• Non-major ports accounted for 45% of the total cargo traffic at Indian ports in FY23, due to a significant shift of traffic from the major ports to the non-major ports.
• The Government has also initiated the National Maritime Development Programme (NMDP), an initiative to develop the maritime sector with a planned outlay of US$ 11.8 billion. In Union Budget 2023-24, the total allocation for the Ministry of Shipping was US$ 1,813.16 million (Rs. 2,218.74 crore).

The Major Port Authorities Act, 2021

• The Major Port Authorities Act, 2021 aims to provide for the regulation, operation and planning of Major Ports in India and to vest the administration, control and management of such ports upon the Boards of Major Port Authorities and for matters connected therewith or incidental thereto.
  • Major Port Authorities Act 2021 was enacted after Major Port Authorities Bill received the assent of the President and replaced the previous Major Port Trusts Act, 1963.
• A Board of Major Port Authority to be created, for each major port. These Boards will replace the existing Port Trusts under the 1963 Act, which is comprised of members appointed by the central government.
• The act is more compact in comparison to the Major Port Trusts Act, 1963 as the number of sections has been reduced to 76 from 134 by eliminating overlapping and obsolete Sections.
• The act applies to 12 major ports:
  1. Deendayal (erstwhile Kandla)
  2. Mumbai
  3. JNPT
  4. Mormugao
  5. New Mangalore
  6. Cochin
  7. Chennai
  8. Kamarajar (earlier Ennore)
  9. V O Chidambarnar
  10. Visakhapatnam
  11. Paradip 
  12. Kolkata (including Haldia)
• Aims & Objectives of the Act:
  • It aims to promote the expansion of port infrastructure and facilitate trade and commerce
  • Its objective is to decentralize the decision making and to infuse professionalism in the governance of major ports
  • The act is aimed at reorienting the governance model in central ports to landlord port model in line with the successful global practice
  • It imparts faster and transparent decision making benefiting the stakeholders and better project execution capability
• Board of Major Port Authority & Composition:
  • The new act has proposed a simplified composition of the Board of Port Authority which will comprise of 11 to 13 Members from the present 17 to 19 Members representing various interests
  • Provision has been made for the inclusion of representatives of:
    • State Government in which the Major Port is situated
    • Ministry of Railways
    • Ministry of Defence and Customs
    • Department of Revenue
    • A Government Nominee Member 
    • A member representing the employees of the Major Port Authority
  • Adjudicatory Board – An Adjudicatory Board has been proposed to be created to carry out the residual function of the erstwhile TAMP for Major Ports, to look into disputes between ports and Public-Private Partnerships (PPP) concessionaires, to review stressed PPP projects and suggest measures to review and revive such projects
• Powers:
  • The Act allows the Board to use its property, assets and funds as deemed fit for the development of the major port
  • The Board can also make rules on:
    • Declaring availability of port assets for port-related activities and services
    • Developing infrastructure facilities such as setting up new ports, jetties
    • Providing exemption or remission from payment of any charges on any goods or vessels
  • The role of the Tariff Authority for Major Ports (TAMP) has been redefined. Port Authority has now been given powers to fix a tariff that will act as a reference tariff for purposes of bidding for PPP projects. PPP operators will be free to fix tariff- based on market conditions
  • Under the act, to meet its capital and working expenditure requirements, the Board may raise loans from any:
    • Scheduled bank or financial institution within India
    • Any financial institution outside India that is compliant with all the laws.
• Significance of the Act:
  • The Major Port Authorities Act, 2021 is in line with the Prime Minister’s Atmanirbhar Bharat Campaign. It will help India become a global manufacturing and trading hub.
  • It imparts faster and transparent decision making benefiting the stakeholders and better project execution capability.
  • The act reorients the governance model in central ports to landlord port model in line with the successful global practice.

Challenges faced in respect of existing ports include

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

Government initiatives

Sagarmala Program

• The Sagarmala Programme was approved by the Union Cabinet in 2015 which aims at holistic port infrastructure development along the 7,516-km long coastline through modernisation, mechanisation and computerisation.
• The vision of the Sagarmala Programme is to reduce logistics costs for EXIM (Export-Import) and domestic trade with minimal infrastructure investment.
• Sagarmala could boost India’s merchandise exports to USD 110 billion by 2025 and create an estimated 10 million new jobs (four million in direct employment).
• The Ministry has started the ambitious Project of Sagarmala Seaplane Services (SSPS) with potential airline operators.

• Components of the Sagarmala Programme:
  • Port Modernization & New Port Development: De-bottlenecking and capacity expansion of existing ports and development of new Greenfield ports.
  • Port Connectivity Enhancement: Enhancing the connectivity of the ports to the hinterland, optimizing cost and time of cargo movement through multi-modal logistics solutions including domestic waterways (inland water transport and coastal shipping).
  • Port-linked Industrialization: Developing port-proximate industrial clusters and Coastal Economic Zones to reduce logistics cost and time of EXIM and domestic cargo.
  • Coastal Community Development: Promoting sustainable development of coastal communities through skill development & livelihood generation activities, fisheries development, coastal tourism etc.
  • Coastal Shipping & Inland Waterways Transport: Impetus to move cargo through the sustainable and environment-friendly coastal and inland waterways mode.

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.
  • The Jal Marg Vikas Project (JMVP) for capacity augmentation of navigation on National Waterway-1 (NW-1) is being implemented by the support of World Bank.
  • One of the major problems for a commercially viable and safe navigation on NW-1 is low depth upstream of Farakka barrage due to low discharges from tributaries and difficult hydro morphological characteristics of the river Ganga.
• The project will contribute in bringing down the logistics cost in the country and will provide an alternative mode of transport which will be environment friendly and cost effective.
• It is being implemented by the Inland Waterways Authority of India (Ministry of Shipping).
• The project envisages fairway development through performance based contract for least assured depth of 2.2 metres to 3 metres and bottom channel width of 45 metres, bank protection works, and provisions of navigation aids.
• The states that are being covered under the Project are Uttar Pradesh, Bihar, Jharkhand, West Bengal.

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 fund comprises of a cess imposed along with excise duty on petrol and diesel.
• The administrative control of Central Road and Infrastructure Fund (CRIF) falls under the Ministry of Finance.
  • Earlier it was under the domain of Ministry of Road Transport and Highways.
• Central Road Fund Act (Amendment), 2018:
  • The amendment renamed the Central Road Fund as Central Road and Infrastructure Fund (CRIF).
  • It allowed using the proceeds of the road cess under CRIF to finance other infrastructure projects including waterways, some portion of the railway infrastructure and even social infrastructure including education institutions, medical colleges etc.

PM Gati Shakti Scheme

• The Gati Shakti is a national master plan aimed at the coordinated planning and execution of infrastructure projects in India to reduce logistics costs.
• Gati Shakti is a digital platform that will bring 16 ministries and departments of the Government of India together and that includes the Railways and the Roadways also.
• The idea is to have a coordinated execution of infrastructure connectivity projects across the country.
• It is a Rs.100 lakh-crore project for developing ‘holistic infrastructure’.
• The existing infrastructure schemes under various ministries will be incorporated into this plan, including Sagarmala, Bharatmala, UDAN scheme, inland waterways, etc.
• The master plan will also cover economic zones such as pharmaceutical clusters, textile clusters, defence corridors, industrial corridors, electronic parks, fishing clusters, and agri zones.
• It will also leverage technology extensively including spatial planning tools with ISRO imagery developed by BiSAG-N.
• The master plan will usher in the seamless movement of goods and people all across India.
• PM GatiShakti will provide the public and business community information regarding the upcoming connectivity projects, other business hubs, industrial areas and surrounding environment.
• Gati Shakti raises the possibility of future economic zones as well.
• The program has been launched as an umbrella integrator of ₹111-lakh crore worth of projects under the National Infrastructure Pipeline (NIP) for 2020-25.

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

• 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.
• 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
• 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
• 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.

Legislation:

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
2. 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.
3. 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.
4. 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