India is set to introduce a $2 billion incentive plan to replace fossil-fuel-powered passenger vessels, such as ferries and barges, on its inland waterways with environmentally friendly alternatives. The proposal, initiated by the shipping ministry, is expected to be supported by 149.2 billion rupees ($1.8 billion) in subsidies over the next decade. It is currently awaiting approval from the finance ministry.

As part of its broader effort to decarbonize the maritime sector, India is focusing on its inland shipping segment, which is projected to double its fleet of 10,000 vessels by 2030. The initiative is expected to reduce annual emissions by about one million tons. Decarbonization guidelines for cargo and cruise vessels are also being prepared.

The incentive plan aims to shift India's predominantly diesel-powered fleet to cleaner energy sources, including electricity, liquefied natural gas (LNG), and hydrogen. Financial assistance will be provided for vessel procurement, retrofitting, and the construction of shore infrastructure, such as refueling stations and docking facilities.

According to the government’s strategy outlined in January, India hopes to have half of its inland passenger vessels running on cleaner fuels by 2030. The registration of new fossil fuel-based vessels will be phased out by 2033, with the goal of fully replacing them by 2045. This plan aligns with India’s commitment to achieving net-zero emissions by 2070.

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