International North–South Transport Corridor

Context:

India has made the following demands with respect to INSTC at the 3-day “Maritime India” summit that was conducted virtually:

• Include Chabahar port in the 13-nation International North South Transport Corridor.
• Expand INSTC membership by including Afghanistan and Uzbekistan.

About INSTC:

• The International North–South Transport Corridor (INSTC) is a 7,200-km-long
• It is multi-mode network of ship, rail, and road route for moving freight between India, Iran, Afghanistan, Azerbaijan, Russia, Central Asia and Europe.
• The route primarily involves moving freight from India, Iran, Azerbaijan and Russia via ship, rail and road.
• The objective of the corridor is to increase trade connectivity between major cities such as Mumbai, Moscow, Tehran, Baku, Bandar Abbas, Astrakhan, Bandar Anzali, etc.
• Dry runs of two routes were conducted in 2014, the first was Mumbai to Baku via Bandar Abbas and the second was Mumbai to Astrakhan via Bandar Abbas, Tehran and Bandar Anzali.
• The objective of the study was to identify and address key bottlenecks. The results showed transport costs were reduced by “$2,500 per 15 tons of cargo”. Other routes under consideration include via Kazakhstan and Turkmenistan.
• This will also synchronize with the Ashgabat agreement, a Multimodal transport agreement signed by India (2018), Oman (2011), Iran (2011), Turkmenistan (2011), Uzbekistan (2011) and Kazakhstan (2015) (figure in the bracket indicates the year of joining the agreement), for creating an international transport and transit corridor facilitating transportation of goods between Central Asia and the Persian Gulf. This route will be operationalised by mid-January 2018.

Objectives

• The primary objective of the NSTC project is to reduce costs in terms of time and money over the traditional route currently being used.
• Analysts predict by having improved transport connectivity between Russia, Central Asia, Iran and India their respective bilateral trade volumes will increase.
• A study conducted by the ‘Federation of Freight Forwarders’ Associations in India (FFFAI)  found the route is, “30% cheaper and 40% shorter than the current traditional route”.
• Analysts predict the corridor is likely to increase trade connectivity between major cities such as Mumbai, Moscow, Tehran, Baku, Bandar Abbas, Astrakhan, Bandar Anzali etc.

Conclusion:

INSTC is an ideal start to project India as a big global player. Even though the investment is well worth with its economic, political and geo-strategic benefits, it is testing India’s financial backbone. India can do well to rope in other interested parties for partnering in the project, like Japan who also see Central Asia as a lucrative market for its products.