In September 2000, India, Iran and Russia had signed the game-changingInternational North South Transportation Corridor (INSTC) agreement to build a corridor to provide the shortest multi-model transportation route linking the Indian Ocean and the Persian Gulf to the Caspian Sea via Iran and St Petersburg.
It’s been 17 years since this trade corridor was visualized by the Atal Bihari government, and now it is all set to become operationalized from the middle of next month under the rule of another prime minister from the BJP, Narendra Modi. The first consignment will be from India to Russia.
The INSTC is going to lower costs and time drastically. The corridor will give a huge impetus to Indian exports. It is being said that this route can reduce time and cost of container delivery by 30-40%.It will also provide an alternative connectivity initiative to countries in the Eurasian region. This will be India’s second massive boost to trade and economic connectivity in a short span of time after the opening up of the Chabahar Port in Iran.
INSTC could also get linked to the Chabahar Port besides Iran’s Bandar Abbas port. India has greater plans. It is hoping that the INSTC will be connected with various other connectivity projects that the five Central Asian and other Eurasian countries have undertaken among themselves.
“INSTC is now becoming a reality. Chabahar project launched in 2016 will complement INSTC. India is also exploring how Chabahar connectivity corridor can be extended to connect with Central Asia through INSTC, or the Iran-Turkmenistan-Kazakhstan rail line, Iran-Uzbekistan-Kazakhstan alignment and Trans-Afghan rail line (which possibly could be developed by Iran, India, Afghanistan and Uzbekistan),” said P Stobdan, India’s former envoy to Kyrgyzstan and expert on Central Asia.
The INSTC has expanded rapidly to include 11 new members – Azerbaijan, Armenia, Kazakhstan, Kyrgyz Republic, Tajikistan, Turkey, Ukraine, Belarus, Oman, Syria and Bulgaria (as observer). In the near future, Finland, Estonia and Latvia may also join.
The unprecedented impact that this corridor will have on India’s economic ties and trade can be understood by comparing it with the current situation under which India trades with the region. Transport of goods between India and Russia primarily takes place through the sea route via Rotterdam to St Petersburg. As far as the Central Asian region, goods are routed through China, Europe or Iran which are very long and expensive routes.
In a matter of a few months, India has successfully bypassd both Pakistan and China in terms of routes of trade. Pakistan was made irrelevant with the opening of the Chabahar Port and the INSTC will drastically reduce India’s dependence to send goods through China.
It again comes as no wonder that for a whole decade the Congress just sat on this project, possibly due to pressure applied by Beijing. This was started under the Vajpayee government even before China thought of its OBOR. Just imagine how much India would have benefitted economically and geopolitically had this project become a reality half a decade ago. But then again as Prime Minister Modi says, “Congress didn’t do many things because it was all written in my destiny.”