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Reviving the Ganga Waterway Could Create A New Freight Market for India

Professor of Financial Economics and Part-time Value Investor, Transfin.
Feb 4, 2020 5:14 AM 2 min read

The Shape of Water(ways): Freight movement in India is dominated by road (65%) and rail (27%) networks. Waterway transport, on the other hand, makes up only 0.5% of total freight traffic. This is considerably lower than the share in other countries like the US (8.3%) and China (8.7%).


Reviving the Ganga Waterway Could Create A New Freight Market for India


Why Water?: Transporting goods via inland waterways is considerably cheaper, more cost-effective and more environmentally-friendly. While India’s rivers used to be busy trade routes in the past, they have fallen to disuse since the development of the railways. And today, congested road and railway networks have slowed the movement of cargo, driving up the logistics costs that now account for 18% of the country’s GDP.


River Fever: Attempts to revive India’s waterways are underway. The 1,620-km Ganga watercourse (National Waterway 1) is currently being developed under a public-private partnership model to ferry cargo between Prayagraj, UP and the eastern seaport of Haldia, WB.


This waterway passes through India’s most populated region, which produces or consumes 40% of the country’s traded goods. But the bulk of the 370m tons of goods generated here annually is transported by roads or detoured all the way around the peninsula to seaports in western India.


Challenges Ahead: The Ganga is a seasonal river – it swells during the Monsoon and recedes during dry seasons. It also has many islands and shoals. Many of its regions are ecologically sensitive and protected areas. Not to mention, freight traffic should not be allowed to discharge effluents into what is already one of the world’s most polluted water bodies.


Developing the Ganga waterway – or any waterway – for freight traffic will have to tackle these issues to taste success.


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