International North South Transit Corridor

INSTC UPSC: Relevance

• GS 2: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.

INSTC corridor: Context

• Recently, Russia is sending consignments to India via Iran, thus giving a momentum to operationalise the International North South Transit Corridor (INSTC).

INSTC India: Key points

• The consignments will travel to Iranian port cities of Anzali and Bandar Abbas and thereafter to Western Indian ports to operationalise INSTC.
• The total journey will take less than 25 days, compared to the nearly 40 days it currently takes to transport goods from Russia to India and vice-versa.
• The latest push has come as both nations (India and Iran) take a relook at the potential of the INSTC.

What is INSTC?

• INSTC members: INSTC is a 7,200-km-long multi-mode network of ship, rail, and road route for moving freight between India, Iran, Afghanistan, Azerbaijan, Russia, Central Asia and Europe.
• The primary objective of the NSTC project is to reduce costs in terms of time and money over the traditional route currently being used.

INSTC significance

• Reduced time and cost: One of the primary objectives the transport model is it will reduce the time taken to send the consignments from one country to another, which will eventually reduce the cost,
• Russia Ukraine war: The Russian invasion of Ukraine and the subsequent sanctions against Russia have led to an exodus of Western businesses from the country, which in turn has given an opportunity to India to fill up the economic vacuum.
• Increase trade with Russia: India’s exports to Russia stood at $3.24 billion in 2021-22, up from the pre-pandemic figure of $3 billion. Meanwhile, imports from the country have risen to $9.86 billion. INSTC will further ensure more overland trade with Russia.
• Counter Chinese traders: In the wake of outflow of western companies from Russia, Chinese traders are rushing to enter the Russian market. INSTC has the ability to make India a significant global player.
• Expands market: The route is also part of India’s overall efforts to establish greater connectivity and trade with the high-potential markets of the adjoining Commonwealth of Independent States (CIS) countries.
• Bypasses Pakistan: INSTC provides a route to India that ensured an opening to global supply chains and trade networks while bypassing Pakistan.

INSTC Challenges

• Chahbahar port: Chahbahar port—Iran’s only ocean port—has been developed by India, which formally took over operations in December 2018. However, the economic sanctions have led to commerce suffering and Western companies unwilling to set up base on the premises.
• Issue in Afghanistan: Afghanistan had been an important node of the INSTC. However, the Taliban takeover of the country ended the country’s participation in the project and effectively stopped plans of Indian goods reaching Afghanistan.

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