NEW DELHI: India, Russia and Iran are holding negotiations on the International North-South Transport Corridor (INSTC), a 7,200 km multimode (water, land and air) route from Mumbai to St Petersburg through the Central Asian markets that could help New Delhi counter China’s influence in the region through its Belt and Road Initiative.
The other nations that will be part of the corridor are Belarus, Kazakhstan, Kirgizstan, Armenia, Azerbaijan, Bulgaria, Oman, Tajikistan and Ukraine.
INSTC is an initiative taken by India, Russia and Iran to promote transportation cooperation and to enhance connectivity with central Asian countries. The estimated capacity of the corridor is 20-30 million tonne of goods per year.
INSTC will substantially reduce the time and cost for transporting goods between India and Eurasia once fully functional and increase economic activities between India and the resource-rich Russia as well as markets of Europe. Russia is the largest natural gas exporter and producer in the world and Iran is a key source of crude oil for India. Other nations on the corridor such as Azerbaijan are also producers of oil, besides being rich in other resources such as aluminium, zinc and lead.
India has already invested $500m million to develop infrastructure in the Chabahar port in Iran during PM Modi’s visit to Tehran in 2016. That is only a start. For context, China’s BRI is estimated to cost upwards of $1 trillion, though the scale of that project is larger.
Developing the corridor, however, has been a slow process. Initially targeted for 2018, concerns such as security, US sanctions (on Iran and Russia) and finance (especially with a weak rupee) slowed down the project. But India gains a lot from the corridor — besides a smooth trade route, it will link the member nations closer to New Delhi, and the corridor also helps India extend its trade (and diplomatic) activities with Afghanistan (through the Iranian port). There is also a geopolitical play: The corridor bypasses Pakistan, yet runs close to the Balochistan region there.