International North-South Transport Corridor (INSTC)

International North-South Transport Corridor (INSTC):

Overview and Basic Information

• Full Form: International North-South Transport Corridor (INSTC)

• Length: 7,200 km (4,500 miles)

• Type: Multi-modal transportation network combining ship, rail, and road routes

• Primary Purpose: Connecting India’s western ports with Russia’s Baltic Sea coast via Iran, providing an alternative to traditional sea routes like the Suez Canal

• Agreement Signed: 12 September 2000 (initially signed), ratified in 2002 by founding members India, Iran, and Russia

Member States

Full Members (13 countries)​

• India

• Iran

• Russia

• Azerbaijan

• Armenia

• Kazakhstan

• Belarus

• Tajikistan

• Kyrgyzstan

• Oman

• Turkey

• Syria

• Ukraine

Observer States​

• Bulgaria

Countries that have Expressed Willingness to Join​

• Afghanistan

• Uzbekistan

• Latvia and Estonia (Baltic countries)

Main Objectives

Primary Goals​

• Reduce carriage costs and transit time between India and Russia by approximately 30%

• Reduce transit time from the existing 40-45 days to approximately 18-25 days

• Increase trade connectivity between major cities such as Mumbai, Moscow, Tehran, Baku, Bandar Abbas, Astrakhan, and Bandar Anzali

• Promote access to international markets through multi-modal transport

Broader Objectives​

• Increasing effectiveness of transport ties to organize goods and passenger transport

• Promotion of access to the international market

• Providing security of travel and safety of goods

• Harmonization of transport policies, law, and legislative frameworks among member states

Key Routes

Main Route (Western Route)​

• Starting Point: Mumbai, India

• Sea Route: Mumbai to Shahid Beheshti Port (Chabahar) or Bandar Abbas in Iran

• Road Route: Chabahar/Bandar Abbas to Bandar-e-Anzali (Iranian port on the Caspian Sea)

• Sea Route: Across the Caspian Sea to Astrakhan, Russia

• Rail Route: From Astrakhan through Russian federation to Moscow and then to St. Petersburg in Northern Europe

Alternative Routes Developed​

• Trans-Caspian Route: Russia → Iran → India (via sea across Caspian)

• Eastern Route: Russia → Central Asia → Iran → India (significantly reducing costs)

• Via Afghanistan: Russia → Afghanistan (Kabul) → Iran → India (proposed eastern corridor)

Dry Run Routes Tested (2014)​

• Mumbai to Baku via Bandar Abbas

• Mumbai to Astrakhan via Bandar Abbas, Tehran, and Bandar Anzali

Advantages and Benefits

Cost and Time Efficiency​

• Route is 30% cheaper than traditional Suez Canal route

• Route is 40% shorter than traditional route

• Transport time reduced to half compared to current routes

• Study by Federation of Freight Forwarders’ Associations in India (FFFAI) found cost savings of $2,500 per 15 tons of cargo

• Eastern route reduces cost of goods transport from India to Russia by one-fifth

Strategic and Trade Benefits​

• Provides alternative to lengthy Suez Canal route (45-60 days vs. INSTC 25-30 days)

• Eliminates need to use reefer containers for agro-commodities

• Reduces dependency on Pakistan for transit (strategic advantage for India)

• Provides access to lucrative Central Asian markets for Indian exporters

• Helps connect India to Russia and Central Asian countries within 16-21 days at competitive freight rates

• Facilitates bilateral trade volume increase among member states

Geopolitical and Economic Benefits​

• Serves as counterbalance to China’s Belt and Road Initiative (BRI)

• Offers alternative transit for sanctions-hit countries like Iran and Russia

• Develops Iran and Azerbaijan as transit hubs

• Potential for multi-fold increase in trade by expanding to Baltic, Nordic, and Arctic regions

Export Opportunities for India​

• Sectors that benefit: perishable goods (fruits and vegetables), high-value items (ATMs, industrial printers, 3D printers), robotic assembly accessories

• Cross-border e-commerce potential

• Agricultural and textile sectors can exploit untapped export potential to Russia and Central Asia

• Lower costs make Indian goods more competitive in international markets

Chabahar Port Integration

Strategic Importance​

• Only Iranian port with direct access to the Indian Ocean

• Strategic location as commercial transit centre for Central Asia

• Deep draft of 16 meters suitable for handling large shipment vessels

• Located on Asia-Europe and Asia-Asia trade routes carrying large cargo volumes

Integration into INSTC​

• India proposed including Chabahar in the INSTC (traditionally routed via Bandar Abbas)

• Proposed Eastern corridor via Kabul, Afghanistan to Chabahar

• Exempted from US unilateral sanctions under tripartite transit agreement between Iran, India, and Afghanistan (signed 24 May 2016)

• Chabahar as gateway to Indian Ocean Region for Central Asian countries like Uzbekistan and Kazakhstan

Benefits for Afghanistan​

• Facilitates India’s role in Afghanistan’s development through infrastructure projects

• Allows Afghanistan to have commercial fleet sailing from Chabahar

Recent Developments and Progress

Operational Achievements​

• Dry run of container movement via green corridor conducted in April 2017

• July 2022: RZD Logistics announced successful completion of first transport of goods to India via INSTC

• 2024: Transportation volume demonstrated 19% growth, amounting to 26.9 million tons

• Cost of service along Eastern route reduced by 60% since corridor member states’ joint efforts

• Six trains currently routing overland from Russia to India via Turkmenistan and Iran

Recent Infrastructure Projects​

• Rasht–Astara railway: 162-km link being developed as part of INSTC ($1.6 billion investment by Iran and Russia)

• Expected to further enhance connectivity between Iran and Russia

Trade Projections​

• Russia announced plans to export 73.2 million tonnes of coal to India through Iranian ports

• 300 vessels prepared by IRISL to facilitate Russia-India trade

• Expected to reduce transit time for Russian goods from 45 days to 15 days

• 2023: Russia transported 600,000 tons of freight through Iran

• Expected to rise to 4 million tons per year by 2024

Obstacles and Challenges

Geopolitical Challenges​

• US sanctions on Iran and Russia create uncertainties for corridor operationality

• Political tensions between Pakistan, Azerbaijan, and Turkey with India may impact development

• Religious and geopolitical sentiments in the region

• Potential intervention from China affecting corridor operations

• Terrorism-led activities along route pose security threats

Infrastructure and Technical Challenges​

• Slow progress in infrastructure development due to lack of political will

• Insufficient long-term financing strategy

• Physical infrastructure nearly 75% complete (as of 2025)

• Missing links in road and rail networks requiring completion

Regulatory and Legal Challenges​

• Inconsistent legal regimes and transport laws among member states

• Lack of standardized regulatory frameworks

• Bureaucratic complications in customs facilitation

• Gaps in security of cargo, insurance coverage, and regulatory procedures

Operational Challenges

• Intermittent implementation due to geopolitical shifts

• Lack of awareness about demand in both Indian and Russian economies

• Need for consistent coordination among 13+ member states

• Infrastructure maintenance and synchronization requirements

India’s Strategic Interest and Role

Key Initiatives​

• India expressed intent to extend INSTC membership to Afghanistan and Uzbekistan

• Proposed establishing land route via Kabul and Tashkent to form INSTC’s “Eastern corridor”

• Advocated for linking Chabahar port with INSTC

• Workshop conducted on “Linking Chabahar Port with INSTC” (January 2023)

Institutional Involvement​

• Container Corporation of India (Concor) signed MoU with Russian Railways Logistics (RZD)

• Single invoice system enabling cargo movement between India and Russia via Iran

• Ministry of Ports, Shipping, and Waterways (MoPSW) leading coordination

Foreign Trade Policy​

• INSTC highlighted as important in Foreign Trade Policy 2015-20 for expanding India’s trade links with Central Asia

• Emphasis on maintaining competitive freight rates for traders

Relationship with Other Initiatives

Ashgabat Agreement Synchronization​

• INSTC synchronizes with Ashgabat Agreement (multimodal transport agreement)

• Member countries: India (2018), Oman (2011), Iran (2011), Turkmenistan (2011), Uzbekistan (2011), Kazakhstan (2015)

• Creates international transport and transit corridor between Central Asia and Persian Gulf

Counter to Belt and Road Initiative​

• INSTC provides India an opportunity to counter China’s One Belt and One Road Initiative

• Helps secure India’s interests in Central Asia and beyond

Black Sea Economic Cooperation (BSEC) Link​

• Turkey offered to provide information for linking BSEC with INSTC

• Potential for expanding corridor’s reach to Europe

Economic Impact Potential

Private Sector Benefits​

• Indian firms in agriculture, textiles, and organic chemicals can greatly benefit

• Cost savings through shorter route make products more competitive

• Lower transportation costs benefit retailers and consumers

• Asia projected to account for 66% of global middle class with significant purchasing power

Transit Revenue​

• Iran expected to generate several billion dollars in transit fees

• Potential for Iran and Russia to increase their share in international trade

Ashgabat Agreement

Read More: INTERNATIONAL RELATIONS