In order to enhance trade and connectivity, India, Russia and Iran plan on launching a new cargo transport corridor, which would be a cheaper and shorter alternative to the Suez Canal.
The International North-South Transport Corridor (INSTC), which will combine sea and rail routes, will connect the Indian Ocean to the Persian Gulf through Iran to Russia and Europe. The 7,200-km-long corridor is expected to deliver cargoes from India to the Iranian port of Bandar Abaas. Further ahead, the goods will be transported by land to Bandar Anazli, the Iranian port on the Caspian Sea. From there, the cargo will then be shipped to the Astrakhan Port of Russia and will be moved to Europe by rail.
With an estimated capacity of 20-30 million tonne of goods per year, the corridor is expected to reduce time and cost by 30-40 per cent. The transport time between Mumbai and Moscow will reportedly be reduced to 20 days.
In order to get access to Central Asian markets, the Indian logistics companies at present have to route shipments through China, Europe or Iran. The routes via China and Europe are not only long but also time-consuming and expensive, thus considering the Iranian route as the most viable.
The new shipment passage is an important initiative taken by India, Russia and Iran to enhance connectivity and promote transport cooperation among these nations. Besides, as reported, India is also keen on the INSTC project taking shape at the earliest, notwithstanding American sanctions against both Russia and Iran. DB Vekatesh Varma, Indian Ambassador to Russia, has reportedly also visited the Astrakhan region to see the preparations of the Russian authorities to develop the port.
The project comes on the back of a much broader Belt and Road Initiative (BRI), an initiative of China. Reports suggest that the BRI project could also be linked to the INSTC project, which could be a win-win situation for the countries pursuing the two projects.