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St. Petersburg to Mumbai in 25 days: India can now bypass the Suez Canal to reach Northern Russia

A new trade speedway that can make India more self-reliant in the global economy is ready for business.

Iran’s state-run shipping company has dispatched Russian goods to India through this speedway — the International North-South Transport Corridor (INSTC). The cargo of wood laminate sheets has departed St. Petersburg and will reach Nhava Sheva in India soon, said the Islamic Republic News Agency. It did not give more details. Dariush Jamali, director of an Iranian-Russian terminal in Astrakhan, said the transfer would take 25 days.

If not for the 7,200-km INSTC, the cargo would have had to travel some 16,000 km through the Suez Canal. That would have taken 45-60 days. The transport corridor reduces freight cost between India and Central Asia by at least 30% (from the pre-Ukraine conflict prices), says the Federation of Indian Export Organisations (FIEO).

Under the latest “pilot transfer” of goods from Russia to India, the cargo ship departed St. Petersburg for the Caspian Sea port city of Astrakhan. It would then reach the northern Iranian port of Anzali, from where it would be transported by road to the southern port of Bandar Abbas in the Persian Gulf. From Bandar Abbas, the cargo would be dispatched to the destination in Navi Mumbai.

The INSTC cuts across several countries that are signatories of the Transports Internationaux Routiers (TIR) Convention administered by the International Road Transport Union (IRU). The global framework is aimed at spurring multimodal movement of goods and transport using a single customs document.

The plan to make the corridor a reality was in the works for some time now. After Russia's invasion of Ukraine, industry observers say all trading economies, including India, have no option but to expedite such strategic long-distance routes to keep their trade flowing.

Rajan Sudesh Ratna, Deputy Head and Senior Economic Affairs Officer at United Nations Economic and Social Commission for Asia and the Pacific (UNSCAP), is of the view that conventional economics tells nations to trade via the shortest route possible. This is exactly what INSTC aims at facilitating.

However, Ratna points out that India has to reassess the decision’s cost-benefits in freight cost in view of the Russia-Ukraine conflict. “It is common knowledge that compared to conventional routes, the INSTC is cheaper. The conventional route is riddled with war-induced cost pressures. But in the absence of a good reference price point, it is hard to quantify a range of the potential benefit that will accrue by using INSTC,” he says.

Ratna is sceptical about adding a number to the savings in freight cost. “I wonder if there really is a 30% cost saving (compared with conventional routes) as is being projected. If there is, why did the route’s signatories not execute the plan one or two years earlier?”

But the trade expert adds that one positive outcome of the Russia conflict is that all INSTC signatories have suddenly exhibited increased interest in putting this pact in the fast lane, and this is a good sign for multilateralism and global trade flows.

The corridor links India with Iran, Central Asia, and has the potential to expand up to the Baltic, Nordic and Arctic regions. This paves the way for India to increase its trade with multiple regions. First envisaged in September 2000 by Russia, India and Iran, the 7,200-km multi-modal strategic corridor provides a shorter trade route to Iran, Russia and Europe. Some 13 countries are part of the project — India, Iran, Russia, Azerbaijan, Armenia, Kazakhstan, Belarus, Turkey, Tajikistan, Kyrgyzstan, Oman, Ukraine and Syria.

In June 2021, INSTC’s western corridor was operationalised to connect India and Europe. The United Nations Economic and Social Commission for Asia and the Pacific is pursuing the eastern corridor, which will connect China with Russia and European countries via Central Asian nations. India is a part of this initiative, too.


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