India’s ruling Bharatiya Janata Party-led National Democratic Alliance government has prioritized lowering costs of carrying goods by water transportation. Currently, there is a buzz around multimodal connectivity through road, rail, and river through which goods be transported not only within the country but also to neighbouring countries like Bangladesh, Bhutan and Nepal.

Multimodal terminals built at Varanasi, Sahibganj and Haldia along the Ganges thus enable goods to be ferried to northeastern states through Bangladesh. Bangladesh will find it easier to ship its garments to Indian markets. Landlocked Nepal and Bhutan could have a passage to the sea through Bangladesh.

Water transportation

The benefits of carrying cargo through water transportation are manifold. India’s Ministry of Shipping – which has now been redesignated by Prime Minister Narendra Modi as the Ministry of Ports, Shipping and Waterways - estimates that it would take ten times less money to move cargo a kilometre by river than by congested roads and highways, which is the preferred mode of choice for almost all trade in the region.

Waterway transport also uses about a fifth of the fuel road transport does, which could mean substantial carbon emission reductions, according to Aditya Valiathan Pillai’s article “Promising future of inland water trade in South Asia.” Pillai is a program officer for The Asia Foundation in India, a non-profit international development organization.

Waterway connectivity between India, Bangladesh

Interestingly, the current focus on encouraging inland water transportation along the Ganges and Brahmaputra only reactivates defunct commercial arteries of yesteryear when inland waterways linked Nepal, Bhutan, India, and Bangladesh.  A big factor of change was the protocol on inland water trade and transit between India and Bangladesh in 1972.

Both nations agreed to automatic renewals that enabled a more stable framework for trade in 2015. The latest is the Second Addendum to the Protocol on Inland Water Transit and Trade signed on May 20 this year that increased the number of new waterways and ports of call to northeastern states like Tripura.

Noteworthy progress of late is that Bhutanese cargo of stone aggregates reached Bangladesh on an Indian vessel on the Brahmaputra last year. In July 2020, a container ship from Kolkata docked in Bangladesh’s Chattogram port, from which the consignment was sent by trucks to an Integrated Check Post adjacent to Agartala, capital of Tripura. The first export shipment from Bangladesh to Tripura through inland waterways was a consignment of cement that arrived in Tripura’s Sonamura from Daudkandi in Bangladesh on September 5. This operationalized the new inland waterways protocol route between Tripura and Bangladesh.

Sahibganj – a mini-Rotterdam?

From the northeast as well, a fully functional river transportation network can enable cargo to be ferried from Assam on the Brahmaputra into Bangladesh. The vessel can then head to Chattogram or Haldia (West Bengal) and sail westwards along the Ganges to Multi Modal Terminal (MMT) at Sahibganj (Jharkhand) or Varanasi (Uttar Pradesh). An interesting article in Forbes India held out the promise of Sahibganj MMT as a mini-Rotterdam of sorts!

Like Rotterdam, a major European port and the second-largest city of the Netherlands, provided waterway access to the heart of Western Europe, this MMT, too, could provide India-Nepal cargo connectivity through waterways route, besides providing industries of Jharkhand and Bihar access to the global market.

Sahibganj MMT was inaugurated by PM Modi in September 2019 and was built at a cost of Rs.2.9 billion. This is part of a World Bank-funded project to improve the navigability of the Ganges from Varanasi to Haldia which is 1,360 kilometres away.

However, the volume of cargo that is moving on this river is low. Around 40 percent of India’s traded goods are either destined or shipped from the Ganges surrounding Varanasi. Less than one percent of that cargo is moved via water transportation.

Transportation planners hope to raise that to 10 percent according to a World Bank blog post by Bob Saum and Junaid Kamal Ahmad.

Private sector participation

To make a success of inland water transportation, greater private sector participation is necessary. It has the resources for infrastructural development and ensuring that desilting and dredging are regularly done to ensure a minimum depth of water in the river that is adequate for shipping vessels. The promise of greater private sector interest - that was indicated when PepsiCo shipped containers equivalent to 16 truckloads of food and snacks along the Ganges for the inauguration of Varanasi MMT in November 2018 - has been subsequently belied. Earlier this year, there were no bidders for operating, managing and developing the Varanasi MMT.

There is also a need for a proper regulatory framework that will govern waterway trade, including cross-border river management. The redesignated Ministry of Ports, Shipping, and Waterways is now the nodal domestic agency but there is a need for greater coordination with local governments and neighbours. Above all, there would be lots of people who will be impacted by opening these rivers to trade like fishermen and boatmen.

According to Saum and Ahmad, 600 million people live along the Ganges, Brahmaputra, and Meghna (one of the major rivers in Bangladesh). While water transportation is cheaper and environment-friendly, disruption to livelihoods must be minimized.

(The writer is an economics and business commentator based in New Delhi. The views expressed are personal. He can be contacted at nchandramohan@rediffmail.com)