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Exploring the Economic Potential of Indian Waterways – IMPRI Impact and Policy Research Institute

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Exploring the Economic Potential of Indian Waterways - IMPRI Impact and Policy Research Institute

Dhiraj Nayyar

Eleven months ago, in a first for inland waterway cargo movement in India, the MV Lal Bahadur Shastri, a river cargo vessel, transported 200 metric tonnes of food grain over 2,350 km from Patna to Guwahati via Bangladesh. Now, the MV Ganga Vilas, a luxury liner, has begun to operate the world’s longest river cruise, across 3,200 km, from Varanasi to Dibrugarh via Bangladesh.

Prime Minister Narendra Modi’s focus on commercialising waterways, particularly in the east of the country, could be an economic game changer if freight and people can move seamlessly through the region without depending on indifferent roads and an over-burdened rail network.

Modern India has not seen the potential in rivers that our earlier civilisation did. Tragically, most rivers have been put to the worst use as dumping grounds for toxic effluents, suffering from acute pollution and harmful to both river and human life.

That has made them unfit for use even as pleasant urban spaces in most cities. The Yamuna river in Delhi is a prime example. The exception is the Sabarmati river in Ahmedabad which got a new lease of life courtesy of the Sardar Sarovar project and the very smart riverfront redevelopment, both driven by Modi when he was chief minister of Gujarat. Ahmedabad is perhaps the only big Indian city that has a riverfront experience of a global standard.

The success of the Sabarmati river project likely stayed with Modi when he moved to Delhi. Of course, India’s rich system of rivers has the potential to contribute much more than just appealing urban spaces. They can be a magnet for the hospitality and tourism industries as riversides are in other parts of the world, in cities such as London, Paris and Prague.

They should be used for river cruises exploring India’s immense natural and historical heritage. The cruises on the Nile in Egypt are globally renowned and showcase that country’s heritage. India can potentially have several river tourism circuits following the one just inaugurated between Varanasi and Dibrugarh. They would be a big generator of employment and livelihoods in areas that otherwise do not get enough tourism.

Economic benefits of Inland Waterways

The potential economic benefits extend beyond hospitality and tourism, particularly for the central heartland and the eastern part of the country. As India makes a concerted push to develop a mass employment-creating. Globally competitive manufacturing base, there is every probability that investors will choose to locate their establishments in the country’s coastal areas. This phenomenon is not peculiar to India. Even China developed industry along its coastal regions first before moving inland.

In India, inadequate and costly logistics make it very unlikely that big-ticket industrial projects will come up in the country’s interior, where quick access to a port or larger markets is a serious constraint. For landlocked states like Uttar Pradesh, Bihar and Jharkhand, which have plenty of cheap labour but face adversity in logistics, the river system can play a crucial role in cargo movement. It is faster, cheaper and more climate-friendly than the road.

Along with the dedicated eastern freight rail corridor, scheduled to open late this year or next year after much delay, inland waterways could help change the trajectory of industrialisation and development in some of India’s most populated and poorest states. It will also help address the issue of regional inequalities, particularly the matter of the east lagging behind the rest of the country

An added advantage is access to Bangladesh. India has recently developed a strong bilateral relationship, and Bangladesh has been recording impressive economic growth. For the northeast region that was denied access to a proximate port after the Partition, a waterway access through Bangladesh to a port in West Bengal or even in Bangladesh could be an excellent way to boost exports from the region, particularly of horticulture products and other high-value agricultural products. There could also be spillover effects from Bangladesh’s success in manufacturing, particularly textiles, as ancillary industries can come up in the northeastern region of India.

Lastly, creating economic value in rivers may be the best way to incentivise people at large to advocate for the protection of rivers. There are several high-profile campaigns to save India’s rivers. Their importance cannot be discounted. But no amount of moral persuasion changes people’s behaviour like changed economic incentives do.

In our rivers lies not just the history of an ancient civilisation but also a big part of its prosperous future.

This article was first published in The Economic Times as In India’s rivers lies a big part of its prosperous future on 16 January 2023.

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