Water based transport is effective as generally speaking, operating costs of fuel are low and environmental pollution is lower than for corresponding volumes of movement by road, rail or air. A major advantage is that the main infrastructure - the waterway - is often naturally available. This paper attempts to assess the viability of movement of passengers and freight by inland water transport in India. Inland waterways refer to rivers, canals, lakes etc. In inland water transport, the waterway, though naturally available, has to be "trained", maintained and upgraded. Transport over inland waterways is especially effective when the source and/or destination are waterfront locations. There is an overlap of this sector with coastal shipping where tidal rivers are involved. Legally, there are separate Acts covering inland waterways, the vessels that can ply on them and the setting up of the Inland Waterways Authority of India. Three waterways in the country have been designated as National Waterways (NW-1, NW-2 and NW-3).