A new chapter in India’s Eurasia policy

The International North-South Transport Corridor (INSTC) is all set to be operationalised from mid January 2018. This 7,200-km corridor will connect the Mumbai port to Saint Petersburg in Russia. It has taken more than 17 years since India, Iran and Russia signed the INSTC agreement in September 2000 to build a corridor to provide the shortest multi-modal transportation route linking the Indian Ocean and the Persian Gulf to the Caspian Sea via Iran and Saint Petersburg.

INSTC entered into force on May 16, 2002, following ratification by the three countries. Later, 11 other countries joined the project. They are: Armenia, Azerbaijan, Belarus, Bulgaria (observer status), Kazakhstan, Kyrgyzstan, Oman, Syria, Tajikistan, Turkey and Ukraine.

The aim of this corridor is to transport goods from India, Iran and other Persian Gulf countries to Russia via the Caspian Sea and onwards to Northern and Western Europe. Once fully operationalised, the capacity of this corridor is to carry 20-30 million tonnes of cargo per year. This will change both the ‘geo-politics’ as well as ‘geo-economics’ of this region.

Not only will it cut down the costs of transportation of goods from India to Europe, but a lot of transportation time would also be saved. Currently, it takes more than 40 days for goods to be transported from Mumbai to St Petersburg; however, with the INSTC fully operationalised, it is expected to cut down the transportation timings by 30-40 per cent.

INSTC will enhance India’s presence in Central Asia as a key economic player. India’s access to Central Asian Region and beyond has always been hindered due to the presence of hostile Pakistan and an unstable Afghanistan. Projects like TAPI couldn’t been operationalised yet due to the very same reason.

Through INSTC, India will bypass Pakistan and its goods will reach Central Asian markets where the demands of Indian products are reasonably good. The Chabahar Port will additionally boost India’s access to the region. The Central Asian region is a very important region for India geo-strategically. India has always had historical and cultural linkages with this region since the time of Kushan empire. The region is considered to be as India’s ‘extended neighbourhood’.

India can now look forward to tackle the tremendous Chinese presence in the region. INSTC is regarded as India’s answer to China’s Belt and Road Initiative. The corridor will also enhance Indo-Russian ties both economically and strategically, especially since Russia is getting cosy with Pakistan.

The Foreign Trade Policy of India, 2015-2020, has highlighted the importance of the International North-South Transport Corridor (INSTC) in expanding India’s trade and investment links with Central Asia.

With the first consignment of goods ready to be transported from India to Russia next month, INSTC looks to be a trade corridor of immense potential that could help India to develop its economic and strategic importance in Eurasia and Central Asian region.

The author is a junior research fellow at the School of International Studies, JNU