Sailing Towards Sustainability: From Road and Rail to Coastal Shipping and Inland Water Transport

The Sagarmala, under the Ministry of Ports, Shipping and Waterways (MoPSW), has launched a number of measures to encourage coastal shipping and Inland Water Transport (IWT) throughout the nation. Promotion of coastal shipping is the Ministry’s primary objective. This article will be giving a small comparative analysis between the carriage of freight through road and water.

The Inland waterways in India include a vast network of rivers, canals, backwaters, and creeks. Yet only 6% of the nation’s total domestic goods shipment is done via coastal routes.  Compared to wealthy nations, the country notably underutilises the waterways for the transportation of goods. Indian domestic waterways, which includes coastal shipping and inland waterways play a major role in the country’s hinterland connectivity. Transport through waterways are found to be cost effective as well as an environmentally friendly means of transporting freight and has the potential to supplement the overburdened railways and congested roadways.


Pre tax freight (Rs. per tonne Km)

Post Service tax freight (Rs. per tonne km)










Source : PIB, Government of India.

This table above shows the pre freight taxes and the post freight taxes of each mode of transportation. Clearly, Inland Water Transportation (IWT) stands out as the most cost effective way for freight forwarding. This will cut down on logistics cost and help utilise the surplus amount from the cost cutdown for investing in other required needs of the industry, carving out scope for more development opportunities.


Traffic comparison

Since the turn of the century, India has had an incredible economic expansion that has resulted in congested roads and railroads that are unable to handle the volume of traffic of goods and passengers. According to a report from the Ministry of Road Transport and Highways (2023), India has 6.3 million km of roads, which account for 64.5% of the nation’s road network transportation of all goods. The Indian Railway network, one of the biggest in the world, is currently functioning at a utilisation rate of more than 100%. Despite the fact that there are many initiatives and projects for upgrading existing roads and railways in order to expand them, it is unlikely that these projects would be able to meet future demands of the space needed for easy transition of goods, given the rising population and daily increase in the number of vehicles.

Studies have indicated that employing the multi-modal combination of rail and sea can comparably cut down the cost of transporting goods in containers from North India to South India and vice-versa, by reducing as much as 40-50% of the actual cost. This can be proved by a number of facts; for example, 1 horsepower can carry 4000 kg load in water whereas it can carry 150 kg & 500 kg load by road & rail respectively. In addition, the cost of operating inland water transportation is quite less, as is the cost of building and maintaining canals. These considerations collectively suggest that future investment should largely be made around developing coastal shipping and IWT. Carriage of freight by coastal ship offers a number of intrinsic benefits over road and even rail transportation. Compared to trucks, ships emit far less air pollution, since ships use less fuel than trucks, it saves energy and is safer. Even so, a few things are to be considered before the development of water transportation, as the environmental benefits of shipping goods by water are not absolute, but rather only comparably so, when compared to shipping goods by road and rail. It includes risks to local fishing vessels, water pollution, and noise pollution. Water freight is not purely environment friendly but only comparatively environment friendly in comparison with road and rail transport.


Initiatives taken by the Ministry to develop coastal shipping

  • Coastal vessels are being provided a discount of 40% in port charges over foreign going vessels to encourage a modal shift.
  • Efforts to promote coastal shipping include easing the restrictions on cabotage for cargo ships, lowering the GST on bunker fuel from 18% to 5%, integrating inland and coastal cargo, providing subsidies to Indian shipping firms, clearing the Green Channel for coastal cargoes, and giving coastal vessels priority berthing at busy ports.
  • The GOI is offering support for the capital dredging, mechanisation of coastal berths, and the construction or upgrading of exclusive coastal berths, platforms, or jetties.
  • At various ports, five specifically designed coastal berths have already been built, and six more are now being planned.
  • The coastal shipping traffic has improved from 74.9 MMTA in 2014 to 133 MMTPA in 2022. The National Logistic Portal and PM GatiShakti’s proposal will give coastal shipping an additional push and assist the industry reduce its overall logistic costs.

The year 2023 has already seen a remarkable surge in India’s position in the Logistics Performance Index, development plans initiated, new policies and guidelines to support the industry and events that break records in the ports and shipping sector. Numerous projects have been identified, and they include developing and updating policy as well as making significant contributions to research and development  to support the growth of the maritime industry. By the end of 2023, we can hope to look forward to a higher economic growth and buildouts in the sector.