“Uttar Pradesh is transforming trade with new inland ports along the Ganga, enhancing connectivity and reducing logistics costs. The Varanasi and Ghazipur terminals, part of National Waterway-1, are driving economic growth by facilitating bulk cargo transport and fostering regional integration with Bangladesh and Nepal. These developments align with India’s Maritime Vision 2030, promoting sustainable and cost-effective freight movement.”
Uttar Pradesh Harnesses Inland Waterways for Trade Growth
Uttar Pradesh is emerging as a key player in India’s inland waterways sector, with new ports along the Ganga river system under National Waterway-1 (NW-1) revolutionizing trade and logistics. The state’s strategic location in the resource-rich Gangetic plain, coupled with the development of multi-modal terminals at Varanasi, Ghazipur, and other locations, is enhancing connectivity and reducing transportation costs for bulk cargo like coal, iron ore, and cement. These efforts align with the central government’s Maritime India Vision 2030 and the Jal Marg Vikas Project (JMVP), supported by the World Bank, aimed at making waterways a viable alternative to congested road and rail networks.
The Varanasi Multi-Modal Terminal, operational since 2018, has become a cornerstone of this transformation. Equipped with modern facilities, it handles over 1.5 million tonnes of cargo annually, including coal, food grains, and fertilizers. The terminal’s integration with rail and road networks through the Eastern Dedicated Freight Corridor and highways ensures seamless logistics. Similarly, the Ghazipur terminal, recently upgraded, supports the movement of goods to eastern India and neighboring countries like Bangladesh and Nepal, fostering cross-border trade. In FY 2024-25, NW-1 alone recorded a cargo movement of 9.6 million tonnes, a significant rise from 5 million tonnes in 2016-17, reflecting an 88% growth in freight traffic.
The Inland Waterways Authority of India (IWAI), established under the IWAI Act of 1985, is spearheading these developments. The authority has introduced digital tools like LADIS (Least Available Depth Information System) and RIS (River Information System) to improve navigation and logistics efficiency. Additionally, the “Jalvahak” Cargo Promotion Scheme, launched in December 2024 with a Rs. 95.42 crore budget, offers a 35% reimbursement on operating costs to incentivize private players. This has led to scheduled services on routes like Kolkata-Varanasi, boosting cargo movement reliability.
Uttar Pradesh’s inland ports are also pivotal for regional economic growth. The Freight Village in Varanasi and the Integrated Logistics Park in Sahibganj, both under development, are set to enhance multi-modal connectivity. These hubs will allow industries in UP to access markets in northern and eastern India more efficiently, reducing logistics costs, which currently account for 18% of India’s GDP compared to 8-10% in China. The state’s waterways also provide a greener alternative, with water transport consuming up to four times less fuel per ton of cargo than road transport, cutting greenhouse gas emissions by an estimated 26,000 tons annually on NW-1.
Private sector participation is another key driver. New regulations notified in 2025 enable private investment in jetty and terminal construction, attracting companies to modernize infrastructure. For instance, the Varanasi terminal’s operations have been enhanced through a public-private partnership (PPP) with SAPL, which increased cargo turnover from 20,000 tons in 2015 to 563,000 tons in the first nine months of 2018. The government’s waiver of waterway user charges for three years and the extension of the tonnage tax regime to inland vessels further encourage private involvement.
The strategic importance of UP’s waterways extends beyond domestic trade. The Eastern Waterways Connectivity Transport Grid project aims to link UP’s ports with Bangladesh, Nepal, Bhutan, and Myanmar, strengthening India’s Act East Policy. For example, the Jogighopa terminal in Assam, connected to UP via NW-1, serves as an international port of call for Bhutan and Bangladesh, reducing reliance on road networks and boosting trade with neighboring countries.
Despite these advancements, challenges remain. Seasonal variations in the Ganga’s water levels, particularly during dry winters, limit navigability for large cargo barges. The IWAI is addressing this through sustainable dredging and the National Framework on Sediment Management, ensuring a minimum depth of 2.5-3 meters for year-round navigation. Additionally, inter-state coordination and further infrastructure investments are needed to fully realize the potential of UP’s waterways, which currently account for only 2% of India’s modal mix compared to 21% in the United States.
The development of inland ports in Uttar Pradesh is a game-changer for trade, offering a cost-effective, eco-friendly alternative to traditional transport modes. With ongoing investments and policy support, the state is poised to become a logistics hub, driving economic growth and regional connectivity.
Disclaimer: This article is based on information from government reports, including the Ministry of Ports, Shipping and Waterways, Inland Waterways Authority of India (IWAI), and credible news sources like PIB, Drishti IAS, and India Shipping News. Data is accurate as of September 2025. For the latest updates, refer to official government portals.