Varanasi | Feb 2, 2026

The Union Budget 2026-27 has given a strong push to inland water transport by announcing ship manufacturing and repair centres at Varanasi and Patna, a move expected to reshape river-based trade and passenger movement in eastern Uttar Pradesh. Presenting the budget in Parliament, Finance Minister Nirmala Sitharaman said the Centre will develop a full ecosystem to support vessels on inland waterways and operationalise 20 new national waterways over the next five years, focusing on cost-effective and environmentally friendly transport.

Varanasi’s selection holds special importance as the city lies on National Waterway-1 along the Ganga, one of India’s most critical inland shipping routes. The proposed hub will provide manufacturing, maintenance and repair support for cargo vessels, ferries and passenger boats, helping reduce downtime and improve efficiency. The announcement is seen as a strategic step to turn eastern Uttar Pradesh into a major corridor for river-based logistics and mobility.

This budget push builds on groundwork already done by the state government. In November last year, Uttar Pradesh signed a memorandum of understanding with the Inland Waterways Authority of India to strengthen inland water transport and promote river tourism. The plan included developing Varanasi as a central hub for vessel operations, logistics services and related infrastructure along the Ganga. The state has also proposed water metro services in cities like Varanasi, Prayagraj and Lucknow, with the Kochi Water Metro currently conducting feasibility studies.

Uttar Pradesh is uniquely placed for this expansion, as several of the country’s declared national waterways pass through the state, including the Ganga, Yamuna, Ghaghra, Betwa, Chambal, Gandak, Gomti and Ken rivers. Officials said the new ship manufacturing and repair ecosystem will support these waterways by creating local servicing capacity and encouraging private operators to expand river transport services.

“The proposed Varanasi hub could generate significant employment in marine engineering, operations, training and support services, while also benefiting small businesses linked to logistics and tourism,” deputy transport commissioner Radhey Shyam said, noting that ships are currently repaired and built in far-off cities like Mumbai and Kolkata. Varanasi divisional commissioner S Rajalingam also welcomed the move, saying, “Establishing a ship maintenance facility in Varanasi on National Waterway-1 will support cargo movement. This will strengthen logistics, river-based transport, and generate skilled employment in the region.”

Varanasi already hosts a multimodal terminal inaugurated in 2018, and in September 2025 the prime minister laid the foundation for projects worth ₹525 crore, including a ship repairing facility and a multimodal logistics park. According to IWAI data, cargo movement on National Waterway-1 has grown by 152.75% between 2014-15 and 2023-24. With the renewed focus in Budget 2026-27, eastern Uttar Pradesh now appears set to emerge as a key centre for river trade, passenger movement and sustainable economic growth.

Union Budget 2026-27 Gives Major Push to Inland Water Transport, Varanasi Set to Emerge as Key Hub

The Union Budget 2026-27 has announced a major boost for inland water transport with plans to set up ship manufacturing and repair centres in Varanasi and Patna. The move is expected to strengthen river-based trade and passenger movement, especially in eastern Uttar Pradesh. Finance Minister Nirmala Sitharaman said the government will also work on developing a full ecosystem for inland vessels and make 20 new national waterways operational in the next five years.

Varanasi’s selection is seen as strategically important as the city lies on National Waterway-1 along the Ganga. The proposed facility will support cargo vessels, ferries and passenger boats, helping reduce repair time and improve efficiency. Officials believe this step will turn eastern Uttar Pradesh into an important corridor for river logistics and mobility.

The budget announcement builds on earlier efforts by the Uttar Pradesh government. Last year, the state signed an agreement with the Inland Waterways Authority of India to strengthen river transport and promote river tourism. Plans are also underway to explore water metro services in cities like Varanasi and Prayagraj, supported by the state’s strong network of rivers and national waterways.

Welcoming the decision, deputy transport commissioner Radhey Shyam said, “The proposed Varanasi hub could generate significant employment in marine engineering, operations, training and support services, while also benefiting small businesses linked to logistics and tourism.” Varanasi divisional commissioner S Rajalingam added, “Establishing a ship maintenance facility in Varanasi on National Waterway-1 will support cargo movement. This will strengthen logistics, river-based transport, and generate skilled employment in the region.”