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The International North–South Transport Corridor (INSTC) is a ship, rail, and road corridor connecting India, Russia, Iran, Europe, and Central Asia for freight transportation. It is not a novel idea. The present INSTC initiative, however, was launched in September 2000 in St. Petersburg by Russia, India, and Iran. On May 16, 2002, the deal was signed.
INSTC and India’s “extended neighbourhood”
With the arrival of the new millennium, the central government has made a concerted effort to engage with our “extended neighbourhood.”
The Look-East-turned-Act-East policy, the Link West policy, and other policies demonstrate this.
Central Asia is a crucial corner in our extended neighbourhood, with which we intend to re-connect through our Connect Central Asia policy, which was announced in 2012.
Following the swearing-in of the new government, Central Asia has reawakened interest as a platform. India’s full membership in the Shanghai Cooperation Organization (SCO), as well as Prime Minister Modi’s historic tour to the five Central Asian countries, are proof of this.
In India-Central Asia ties, the INSTC (International North-South Transport Corridor) gets special attention.
What is INSTC?
The International North–South Transport Corridor (INSTC) is a multi-modal connectivity project that aims to connect India, Russia, Iran, Europe, and Central Asia through transportation networks (ship, rail, and road).
The INSTC would improve access to Central Asian countries that are landlocked.
It is not a novel idea. European, Indian, and other foreign traders exploited this historic route to reach the Central Asian markets. Around 10,000 Indian traders were thought to be distributed around the empire during the Safavid dynasty’s reign. (From 1501 until 1736, the Safavids were one of the most powerful reigning dynasties in Persia (modern Iran).)
In September 2000, Russia, India, and Iran launched the current INSTC project in St. Petersburg.
The INSTC is a multi-modal transportation route that connects the Indian Ocean and Persian Gulf to the Caspian Sea via Iran, and finally to northern Europe via St. Petersburg, Russia.
The route largely incorporates shipping, rail, and road freight from India, Iran, Azerbaijan, and Russia. The corridor’s goal is to improve trade connections between major cities like Mumbai, Moscow, Tehran, Baku, Bandar Abbas, Astrakhan, and Bandar Anzali, among others.
Members of the project
The project’s original members are Russia, India, and Iran, as previously stated. However, development on the route has been slow since the deal was signed in 2002. However, on January 18, 2012, in New Delhi, a conference was held to consider the various options for moving the project forward. As a result, cooperation from other Central Asian countries was sought, and the organisation has since grown.
India, Iran, Russia, Azerbaijan, Kazakhstan, Armenia, Belarus, Tajikistan, Kyrgyzstan, Oman, Syria, Turkey, Ukraine, and Bulgaria are the current members (observer). Turkmenistan is not an official member at the moment, but after being formally invited by Prime Minister Modi, it is likely to get road access to the corridor. Azerbaijan and Armenia are also strongly involved in the project, with both nations presently working to complete the NSTC’s remaining links by building new train lines and roads.
The INSTC Route
Mumbai is the route’s southern terminus.
By sea, the route reaches Bandar Abbas in Iran. Bandar Abbas is a vast port city on the Persian Gulf’s southern coast of Iran. It is strategically located on the narrow Hormuz Strait.
On the Iranian mainland, take the road from Bandar Abbas to Bandar-e-Anzali. Bandar-e-Anzali, on the other hand, is an Iranian port on the Caspian Sea.
By ship across the Caspian Sea from Bandar-e-Anzali to Astrakhan. Astrakhan is a Russian federation Caspian port. The city is located on both sides of the Volga River.
Russian Railways connect Astrakhan to other regions of the Russian Federation, as well as further into Europe.
Additional Routes
Azerbaijan route: The NSTC route through Azerbaijan enables transport connectivity between India, Iran, Azerbaijan, Russia, and Kazakhstan. Iran has begun work on completing the Qazvin-Rasht-Astara railway’s missing connection.
Chabahar NSTC Integration: In 2002, India and Iran inked a long-term deal to develop Chabahar into a full-fledged deep-sea port. Bandar Abbas port, which handles 85% of Iran’s seaborne trade, is extremely congested. Chabahar, on the other hand, has a large capacity, with plans to increase it from 2.5 million to 12.5 million tonnes per year. Chabahar, unlike Bandar Abbas, can handle cargo ships weighing more than 100,000 tonnes. According to industry analysts, there are long-term intentions to merge Chabahar with the NSTC.
The Kazakhstan–Turkmenistan–Iran railway link: also known as the North–South Transnational Corridor, is a 677-kilometer railway line that connects Kazakhstan and Turkmenistan to Iran and the Persian Gulf.
Southern Armenia-Iran Railway Corridor: The Southern Armenia Railway, as a critical missing link in the International North–South Transport Corridor, would create the shortest transportation route from the Black Sea ports to the Persian Gulf ports.
Trans-Iranian canal: The concept of building a canal to connect the Persian Gulf with the Caspian Sea was first proposed in the late 1800s. The Russian and Iranian governments were reportedly considering the idea in 2016, according to Russia Today.
North–South Transportation Corridor Goals
The main goals of this route, according to the 2002 agreement, are:
increasing the effectiveness of transportation ties in order to organise goods and passenger transport along the International ‘North–South’ transport corridor; promoting access to the international market through rail, road, sea, river, and air transport of the state Parties to this agreement; and providing security of travel and safety of goods harmonisation of transport policies, as well as law and legislative basis in the field of transportation for the purpose of implementing this agreement
The route’s benefits include:
According to analysts, greater transportation connections between Russia, Central Asia, Iran, and India will increase bilateral trade volumes. The relevance of the International North-South Transport Corridor (INSTC) in strengthening India’s trade and investment linkages with Central Asia is stressed in India’s Foreign Trade Policy, 2015-20.
The effective activation of the corridor will enable India to link to Russia in 16-21 days at reasonable freight rates, resulting in increased trade on the INSTC. To reach Russia and Central Asia, we must either use the Rotterdam port or take the land route through China. These are lengthy, costly, and time-consuming procedures.
It is also intended to minimise the use of reefer containers for agricultural commodities and increase support for Russian supplies.
According to a research undertaken by India’s Federation of Freight Forwarders’ Associations, the route is “30% cheaper and 40% shorter than the present traditional route.”
By avoiding the transit through Pakistan, India can get access to the wealthy Central Asian markets. Due to lower costs and shorter delivery times, Indian exporters may gain a competitive advantage.
Given China’s growing regional ambitions through its One Belt, One Road Initiative, the INSTC is of great economic and strategic importance to India. India’s interests in Central Asia and beyond could be protected by the proposed INSTC trade corridor.
This corridor has a lot of potential if India can get its South East Asian neighbours on board as well. The Suez Canal takes 45-60 days, whereas the INSTC takes 25-30 days. Turkey has offered to supply the required information to link the Black Sea Economic Cooperation (BSEC) with the International Network for Science and Technology Cooperation (INSTC).
Constraints
The INSTC still lacks a robust institutional structure to address operational challenges on the ground.
There are still issues with customs procedures and documents.
Issues relating to the necessary infrastructure’s finance.
On the route, there is a low amount of containerization.
There are no agreed-upon border crossing rules among the participating countries.
In the case of movement from Bandar Abbas, rail has a higher tariff than road.
There are waggon shortages.
Islamic insurgents to the east and west of the road pose a security threat, as does the exorbitant expense of insurance.
Conclusion
INSTC is a great place to start if you want to project India as a major global player. Despite the fact that the investment is worthwhile in terms of economic, political, and geostrategic benefits, it is putting India’s financial stability to the test. India would do well to enlist the help of other interested parties, such as Japan, which sees Central Asia as a profitable market for its goods.
