International North South Transport Corridor (INSTC) | UPSC Notes

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• The International North-South Transport Corridor (INSTC) is a multi-modal transport system that started in St. Petersburg in September 2000. Its goal is to help Member States work together on transport.

• It is a 7,200-kilometer-long network of train, road, and water routes on land and sea that will help trade between Russia, Iran, Central Asia, India, and Europe.

It’s not a brand-new idea. European, Indian, and many other foreign traders used this old road to reach the markets in Central Asia. During the Safavid dynasty, there were probably around 10,000 Indian traders all over the realm. From 1501 to 1736, the Safavids were one of the most important families to rule in what is now Iran.

• Iran, Russia, and India are the founders of the project.

• This corridor crosses the Indian Ocean, Persian Gulf, and Caspian Sea through the Islamic Republic of Iran. From there, it goes through the Russian Federation to St. Petersburg and North Europe. It’s the quickest way to get through this queue.

The goal of the corridor is to make it easier for big towns like Mumbai, Moscow, Tehran, Baku, Bandar Abbas, Astrakhan, Bandar Anzali, etc. to trade with each other.

• Eleven new countries joined the International North-South Transport Corridor (INSTC): the Republic of Azerbaijan, the Republic of Armenia, the Republic of Kazakhstan, the Kyrgyz Republic, the Republic of Tajikistan, the Republic of Turkey, the Republic of Ukraine, the Republic of Belarus, Oman, Syria, and Bulgaria (Observer).

International North South Transport Corridor (INSTC) Route

• The route’s southern hub is in Mumbai.The route goes by boat to Bandar Abbas in Iran. Bandar Abbas is a large port city on the Persian Gulf in the south of Iran. It is in a very important place at the small Strait of Hormuz.

• On the Iranian mainland, you can get from Bandar Abbas to Bandar-e-Anzali by road. Bandar-e-Anzali is another port in Iran, but it is on the other side of the Caspian Sea.

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• By ship across the Caspian Sea, from Bandar-e-Anzali to Astrakhan. Astrakhan is a city in Russia that is a port on the Caspian Sea. The city is on both sides of the Volga River. Russian Railways connect Astrakhan to other parts of the Russian Federation and even further into Europe.

More ways to get there

• Azerbaijan route: The NSTC route through Azerbaijan connects transport between India, Iran, Azerbaijan, Russia, and Kazakhstan. Iran started building the last piece of the Qazvin-Rasht-Astara railway that was missing.

• Chabahar NSTC Integration: India and Iran have a long-standing deal, signed in 2002, to turn Chabahar into a full deep sea port. Bandar Abbas port is very busy and handles 85% of Iran’s trade by sea. Chabahar, on the other hand, has a high capacity, and there are plans to increase it from 2.5 million tonnes per year to 12.5 million tonnes per year. Bandar Abbas can’t handle cargo ships that are bigger than 100,000 tonnes, but Chabahar can. Industry analysts have said that there are plans to connect Chabahar to the NSTC in the long term.

• The Kazakhstan–Turkmenistan–Iran railway link, also called the North–South Transnational Corridor, is a 677 km long railway line that connects Kazakhstan and Turkmenistan to Iran and the Persian Gulf.

• Southern Armenia-Iran Railway Corridor: The Southern Armenia Railway would be the quickest way to get from the ports on the Black Sea to the ports on the Persian Gulf. It would be the key missing link in the International North-South Transport Corridor.

• Trans-Iranian canal: The idea of building a canal to connect the Persian Gulf and the Caspian Sea was first thought of in the late 1800s. In 2016, Russia Today said that the idea was being talked about by the Russian and Iranian governments.

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India will get benefits

• Once it is fully operational, the International North-South Transport Corridor (INSTC) will cut the amount of time and money it takes to move goods between India and Eurasia by a large amount.

If the corridor is turned on successfully, it will be possible to ship goods between India and Russia in 16–21 days at low freight rates. This will help trade on the INSTC grow. At the moment, the only way to get to Russia and Central Asia is through the port of Rotterdam or on road through China. These take a long time and cost a lot of money.

 The Federation of Freight Forwarders’ Associations in India did a study and found that the route is “30% cheaper and 40% shorter than the traditional route.”

• It will increase trade between India and Russia, which has a lot of natural resources, and between India and the markets of Europe.

• With this path, Indian exports might have a competitive edge because they would be cheaper and take less time to deliver.

• The INSTC is important for India’s economy and security because China is getting more ambitious in the region through its “One Belt, One Road” initiative. • Building this route will help India diversify its investments in infrastructure and other economic growth in the region.

• This route would help India get around Pakistan and reach Central Asia and Russia.

• This road has a lot of potential if India can get its South East Asian neighbours on board. The trip through the Suez Canal takes 45–60 days, but the INSTC would only take 25–30 days. Turkey has offered to give INSTC the information it needs to connect with the Black Sea Economic Cooperation (BSEC).

Challenges

• The International North-South Transport Corridor (INSTC) still doesn’t have a good way to deal with practical problems on the ground.

• Problems with the paperwork and processes at customs.

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• Problems with how to pay for different building projects need to be solved.

• The INSTC route has a low volume of container trade.

• There aren’t any rules for crossing borders that all the member countries agree on.

• Problems with the way insurance works and how information is shared between member states.

• Going from Bandar Abbas to Amirabad by train is more expensive than going by car.

• There aren’t enough waggons in Iran, and there are limits on how much can be carried.

• The worries about safety that come from Afghanistan.

Way Forward

• Both bilaterally and regionally, member countries need to make plans for the long run.

• Setting up high-level working groups to help area partners work together on transport.

• Setting up yearly meetings of the technical working groups to keep track of what’s going on.

The International North South Transport Corridor (INSTC) is a great way to show the world that India is a big player on the world stage. Even though the spending is a good idea from a political, economic, and geostrategic point of view, it is putting India’s finances to the test.

• India would do well to get other interested countries, like Japan, to work with them on the project. Japan also sees Central Asia as a good market for its goods.