INSTC to be operationalised mid-Jan 2018

INSTC to be operationalised mid-Jan 2018; game changer for India’s Eurasia policy

The International North-South Transportation Corridor (INSTC) connecting Mumbai with St Petersburg and beyond – which has been 17 years in the making – is set to be operationalised from the middle of next month with the first consignment from India to Russia.

About INSTC:

What is it? India, Iran and Russia had in September 2000 signed the 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. From St Petersburg, North Europe is within easy reach via the Russian Federation. The estimated capacity of the corridor is 20-30 million tonnes of goods per year.

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 and etc.

The significance of the corridor: Conceived well before China’s Belt and Road Initiative (BRI), INSTC will not only help cut down on costs and time taken for transfer of goods from India to Russia and Europe via Iran but also provide an alternative connectivity initiative to countries in the Eurasian region. It will be India’s second corridor after the Chabahar Port to access resource-rich Central Asia and its market.

The absence of viable surface transport connectivity is a serious impediment to trade with the Eurasian region. Currently, transport of goods between India and Russia mostly takes place through the sea route via Rotterdam to St Petersburg. In the case of the Central Asian region, goods are routed through China, Europe or Iran. The routes through China and Europe are long, expensive and time-consuming. Therefore, there is a need to have a logistics route that would be shorter, cheaper and faster.

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