Ecommerce giant Amazon, which battles with Flipkart in the Indian market, has partnered with the Inland Waterways Authority of India (IWAI) to initiate cargo shipments via inland waterways on the river Ganga.
Amazon said it will be utilizing a network of 14,500 km of navigable waterways, including rivers, canals, backwaters, and creeks, to streamline its logistics and transportation. The pilot route for this project will be between Patna and Kolkata, according to a release.
Why did Amazon choose inland waterways?
The decision to use inland waterways is rooted in sustainability and economic efficiency. According to Sarbananda Sonowal, Minister for Ports, Shipping, and Waterways, this mode of transport is significantly more environmentally friendly and cost-effective than road and rail.
"I congratulate Amazon India in their endeavour to collaborate with IWAI to create a waterways transportation solution. This initiative is a reflection of the importance of sustainable logistics solutions in India’s rapidly expanding e-commerce sector," said Sarbananda Sonowal Minister for Ports, Shipping and Waterways, Government of India
A World Bank report also said that water transport consumes up to 91.6% less fuel than road transport.
What will be the impact on ecommerce and logistics?
According to Amazon, The move will enhance the efficiency of its e-commerce operations in India. Amazon India's Vice President of Operations, Abhinav Singh, notes that this collaboration will open new possibilities for the e-commerce sector in leveraging the country's extensive inland waterways.
“This MoU between Amazon India and IWAI is poised to develop a transformative offering that will open up new possibilities for all e-commerce companies to leverage the country’s extensive inland waterways,” says Abhinav Singh, Vice President, Operations, Amazon India.
“We remain committed to our global mission to transform the future of logistics and seek to harness the potential of the country's rivers, canals, and other water bodies to enhance logistics and transportation efficiency for the Indian e-commerce industry at large,” Singh says.
Notably, the development is also expected to benefit artisans, entrepreneurs, and traders in India’s hinterland by providing them access to a wider market.
What has been the government's role?
The Indian government, under its Sagarmala initiative, has been actively promoting the use of inland waterways. With 113 projects valued at Rs 7,030 crore focusing on RoRo/RoPax and Inland Water Transport, the government aims to increase inland water transport volumes to over 200 million metric tons (MMT) by 2030 and surpass 500 MMT by 2047.