- Why in news
- On 28 July 2026 the Ministry of Shipping told the Rajya Sabha that the Coastal Cargo Promotion Scheme, announced in Union Budget 2026, is still at the formation stage. It also listed existing steps to promote coastal shipping.
- What it is
- The Coastal Cargo Promotion Scheme is a proposed scheme announced in Union Budget 2026. It aims to move more freight onto coastal shipping and inland waterways, which are cheaper and cleaner than road and rail. It builds on earlier incentives such as port charge concessions and Sagarmala projects.
- Target
- The scheme aims to raise the share of inland waterways and coastal shipping from 6% to 12% by 2047.
- Status
- The scheme is not yet launched. It is at the formation stage.
- Port charges
- Coastal cargo vessels get a 40% concession on vessel and cargo-related port charges.
- Bunker fuel GST
- GST on bunker fuel for Indian-flag vessels was cut from 18% to 5%.
- Law
- The Coastal Shipping Act, 2025 was enacted to promote coastal shipping.
Don’t confuse with Ro-Ro vs Ro-Pax: Ro-Ro ships carry wheeled cargo such as vehicles and trucks. Ro-Pax ships carry vehicles along with passengers.
Don’t confuse with Coastal shipping vs inland waterways: Coastal shipping runs along the sea coast between Indian ports. Inland waterways use rivers, canals and backwaters.
Schemes: 52 Prelims questions since 2013, 10 in Prelims 2026 alone. They test features, the period and who funds it. In Mains, 33 news-triggered questions, mostly GS3.
Why it matters
- Shifting freight to water lowers logistics cost and cuts road and rail congestion.
- Water transport emits less per tonne-km, so it supports emission reduction goals.
Problems
- Weak last-mile road and rail links to ports, and limited vessel availability under the Indian flag.
- The target is still a plan, since the scheme is only at the formation stage.
Way forward
- Finalise the scheme with clear funding, and link it to Sagarmala and the Coastal Shipping Act, 2025.
- Improve hinterland connectivity and keep dedicated berths and fast clearance running.
Put in your answer
Ghogha–Hazira Ro-Pax: The ferry cuts a 12-hour road journey to a 4-hour sea route.
Ferry reach: Ro-Pax and passenger ferries have served over 65 lakh passengers and over 15 lakh vehicles and trucks.
- 2016Mains GS1 · Q19Problems and prospects of inland water transport in India
- 2017Mains GS1 · Q16Converting floods into irrigation and all-weather inland navigation sources
- 2026Prelims Q35Statements on Sagarmala's port-led growth, outcomes, and Sagarmala 2.0 goals
- 2026Prelims Q24How Vizhinjam port marks a structural shift in maritime trade policy
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
No practice question for this one; the card may still help an answer. Why: Budget 2026 scheme to lift IWT and coastal share from 6% to 12% by 2047; still at formation stage, so few firm facts yet.
Worth revising until Prelims 2028: most news questions come within two years of the event.