Explained: INSTC, the transport route that has Russia and India's backing

An India-bound cargo sent from Russia using the International North-South Transport Corridor (INSTC) reached the Sarkhas railway station in Iran on July 13. From the railway station, the cargo will go to Bandar Abbas port in southern India and then come to India via the Arabian Sea.

The cargo left Chekhov station in Russia on July 6 and it was received by a team of Iranian ministers

What is INSTC?

INSTC is a 7,200 km-long transportation network offering the shortest connectivity route to its member states. It was established on September 12, 2000, by Iran, Russia and India. The corridor encompasses sea, road and rail routes. 

The main purpose of the corridor was to reduce carriage costs and transit time between India and Russia. The transit time is expected to reduce to almost half, once the corridor becomes fully functional.

The agreement has been ratified by 13 countries namely, Azerbaijan, Belarus, Bulgaria, Armenia, India, Iran, Kazakhstan, Kyrgyzstan, Oman, Russia, Tajikistan, Turkey, and Ukraine.

INSTC links the Indian Ocean to the Caspian Sea via the Persian Gulf.

Why India supports INSTC?

India supports the corridor to reduce transit cost and time. Europe-bound shipments that take 45-60 days to reach Europe, via Suez Canal, can be delivered in 23 days using INSTC.

The corridor will improve India’s economic engagement with gulf countries like Iran and Iraq. India has also been pushing for boosting regional connectivity. It is already working with Iran to develop the Chabahar port.

India has proposed to include the port in the framework of the INSTC. At a connectivity conference in Tashkent last year, External Affairs Minister S Jaishankar projected the Chabahar Port as a key regional transit hub including Afghanistan.

Also, the route may help India is fulfilling its energy needs. The improved connectivity along with RBI's latest rupee settlement announcement may help the country import oil from Iran. Once a leading importer of Iranian oil, India stopped buying the commodity after the USA imposed sanctions on Iran in 2018.

India may also provide humanitarian aid to crisis-stricken Afghanistan through INSTC.

INSTC’s challenges

Central Asia has a major security threat in the form of the Islamic State (IS), a terrorist organisation. The issue of differential tariffs and customs in the region is a major challenge that India needs to overcome.