Budget 2026: Ports & Shipping Get 48% Fund Hike, Waterways Push

A Strategic Push for Maritime Infrastructure

Union Budget 2026 has provided a significant policy and financial thrust to India's maritime sector, signaling a clear focus on strengthening ports, shipping, and inland waterways as engines of economic growth. Finance Minister Nirmala Sitharaman announced a substantial 48% increase in the budgetary allocation for the Ministry of Ports, Shipping, and Waterways, taking the outlay for FY27 to Rs 5,164.8 crore from the Budget Estimate of Rs 3,470.6 crore in FY26. This enhanced funding is set to accelerate key projects under the Maritime Amrit Kaal Vision 2047.

Unlocking Inland and Coastal Cargo Movement

The centerpiece of the budget's maritime strategy is the launch of a new Coastal Cargo Promotion Scheme. This initiative is designed to incentivize a modal shift of cargo from the congested road and rail networks to the more environmentally sustainable and cost-effective sea routes. The government has set an ambitious long-term target to double the share of inland waterways and coastal shipping in the country's cargo movement from the current 6% to 12% by 2047. For port operators, this policy directly translates into the potential for higher cargo volumes and increased traffic, driving revenue growth.

Expanding the National Waterways Network

To support the modal shift, the budget announced the operationalization of 20 new National Waterways (NW) over the next five years. The plan will commence with NW-5 in Odisha, a crucial channel designed to connect the mineral-rich hinterlands of Talcher and Angul, along with industrial hubs like Kalinga Nagar, to the major ports of Paradeep and Dhamra. This strategic development will create new cargo streams for these ports, enhancing their role in facilitating the export of key industrial and mineral resources. The focus on waterways is a direct enabler for ports to tap into previously inaccessible cargo sources.

Building a Comprehensive Support Ecosystem

Recognizing that infrastructure alone is not enough, the budget also provides for the creation of a supporting ecosystem. New ship repair facilities catering specifically to inland waterway vessels will be established in Varanasi and Patna. Furthermore, to address the need for skilled manpower, the government will set up training institutes designated as Regional Centres of Excellence. These institutes will train youth along the waterway corridors, ensuring a steady supply of qualified professionals to operate and maintain the expanding network.

Enhancing Hinterland Connectivity

The budget's infrastructure push extends beyond the waterways. The announcement of a new Dedicated Freight Corridor connecting Dankuni in the East to Surat in the West will significantly improve port-hinterland connectivity. By creating a high-speed, high-capacity network for goods transport, this corridor will reduce logistics costs and turnaround times for cargo destined for western ports, making Indian exports more competitive. This complements the maritime initiatives by ensuring seamless last-mile connectivity.

Key Announcement	Details	Direct Impact on Port Operators
Ministry Outlay	Increased to Rs 5,164.8 crore (a 48% hike)	Higher capital availability for port modernization and connectivity projects.
Coastal Cargo Promotion Scheme	Incentivizes shifting cargo from road/rail to sea	Potential for significantly higher cargo volumes and port traffic.
National Waterways Expansion	20 new waterways to be operationalized in 5 years	Opens up new cargo catchment areas from the hinterland.
New Dedicated Freight Corridor	Dankuni to Surat	Improves landside connectivity, reduces logistics costs and transit times.
Modal Share Target	Increase coastal & inland shipping share to 12% by 2047	Provides long-term visibility for traffic growth and capacity planning.

Seaplanes for Last-Mile Connectivity

In a move to boost tourism and remote area connectivity, the Finance Minister also announced a Viability Gap Funding (VGF) scheme to support seaplane operations. Coupled with incentives to encourage the domestic manufacturing of seaplanes, this initiative aims to leverage India's extensive coastline and network of water bodies for transport, potentially creating new opportunities for coastal tourism and logistics.

Market Impact and Investor Outlook

The slew of announcements in Union Budget 2026 is expected to generate positive sentiment for the ports and shipping sector. The clear policy direction, backed by a substantial increase in funding, provides strong revenue visibility for port operators, logistics companies, and shipping lines. The focus on creating an integrated multimodal transport system-linking ports, waterways, and freight corridors-addresses critical bottlenecks in India's supply chain. Investors will likely view these measures as a structural positive, enhancing the long-term growth prospects of companies in the maritime ecosystem.

Conclusion: Charting a Course for Growth

Union Budget 2026 has laid a robust foundation for the accelerated development of India's maritime sector. By combining increased capital allocation with targeted policy schemes and critical infrastructure projects, the government aims to lower logistics costs, improve trade efficiency, and promote sustainable transport. The successful implementation of these initiatives will be crucial in achieving the goals of the Maritime Amrit Kaal Vision and positioning India as a global maritime powerhouse.