EghtesadOnline: India is pulling out all stops to operationalize the International North-South Transport Corridor with a dry run planned for Thursday.
The second such dry run is aimed at ironing out the creases in the ambitious multimodal transportation project involving Iran, Russia and India, and comes in the backdrop of China’s "One Belt, One Road" initiative, the Indian newspaper Mint reported on its website.
While the Chinese strategy is aimed at connecting some 60 countries across Asia, Africa and Europe to boost trade and economic ties along its traditional maritime route, INSTC will connect the India Ocean and Persian Gulf with the Caspian Sea through Iran and then onwards to St. Petersburg in Russia and northern Europe.
The plan is to move goods from Jawaharlal Nehru and Kandla ports on India’s west coast to Bandar Abbas Port in the south of Iran by sea. From Bandar Abbas, the goods will be transported to the Iranian port of Bandar Anzali on Caspian Sea by road and from there to the Russian port of Astrakhan by sea. The goods would then be transported into Russian Federation and Europe by Russian railroads, according to Financial Tribune.
According to Indian government officials, INSTC can reduce the time and cost of deliveries by 30-40%. It is much shorter than the current route, which runs through the Suez Canal and the Mediterranean Sea.
Goods transported through the Suez take 45-60 days to reach Europe, compared to INSTC’s 25-30 days.
The potential of this corridor will be manifold for India if it is linked further with Southeast Asian countries. This can boost trade between Europe and Southeast Asia as well.
A senior Indian government official, requesting anonymity, said at present India depends on the sea route via Rotterdam to St. Petersburg. To reach out to Central Asia, goods have to be routed through China, Europe or Iran.
The routes through China and Europe are long, expensive and time consuming. This calls for the need for a route that is relatively shorter, cheaper and safe.
“The corridor will help India bypass Pakistan to reach Central Asia and Russia and potentially get a competitive advantage due to lower cost and shorter delivery time,” the official added.
Another Indian government official, who also didn’t wish to be identified, confirmed the development.
> First Dry Run Experience
The first dry run was conducted in August 2014 by the Federation of Freight Forwarders Association in India.
The dry run report stated, “The proposed INSTC route, via Bandar Abbas in Iran to Russia and the Commonwealth of Independent States destination in transit through Iran, could be the best route with optimal transit/cost for Indian exporters/importers.”
Queries emailed to the spokespersons for India’s ministries of road transport and highways, and external affairs remained unanswered.
India is moving ahead with its plans of accessing transnational multimodal connectivity to articulate its role in the proposed transportation architecture in the region and beyond.
This follows India’s decision to become the 71st signatory to Transports Internationaux Routiers or International Road Transports Convention—an international transit system designed to facilitate the seamless movement of goods throughout these countries in Asia and Europe.
> Need to Leverage Chabahar
“The streamlined international system for the movement of goods by road and other modes will, in particular, enhance India’s International ‘North-South’ Transport Corridor, a key trade route between Central Asia and the Commonwealth of Independent States in the north, and southern ports in India and beyond, such as Chabahar in Iran,” IRU, the world’s road transport organization, said in a statement on March 7.
Experts say India should leverage Chabahar to make INSTC a viable proposition.
“We have to make best use of Chabahar, which can open the entire Central Asia to us,” said Saurabh Chandra, former secretary in the Department of Industrial Policy and Promotion.
India plans to develop Chabahar Port in Iran, which will allow access to landlocked Afghanistan and energy-rich Central Asia through the Jawaharlal Nehru and Kandla ports on India’s west coast. In addition, India has built a 218-km road link connecting Delaram with Zaranj in Afghanistan, which is adjacent to Iran’s border.
Indian Railways also plans to set up a Trans-Asian Railroad route of Dhaka-Kolkata-Delhi-Amritsar-Lahore-Islamabad-Zahedan-Tehran-Istanbul.
Besides, India has been instrumental in implementing the India-Myanmar-Thailand Highway, along with the Bangladesh-Bhutan-India-Nepal Motor Vehicles Agreement.
> Progress on Iranian Side
Last month, Iran, Russia and Azerbaijan agreed to reduce tariffs on interstate cargo transit by 50%, as part of efforts to activate INSTC.
The agreement was reached in a trilateral meeting on March 7 in Moscow where rail officials from the three countries discussed ways of activating the INSTC project.
An official with the Islamic Republic of Iran Railways, Hossein Ashouri, was quoted as saying by Mehr News Agency that all sides hope to activate the corridor later in 2017.
Islamic Republic of Iran Railways is currently building a railroad from the Iranian Caspian port city of Astara to the border with Azerbaijan, from where it will be extended to another city also named Astara in Azerbaijan.
A completed section of the railroad was tested early March after a train set off on a maiden journey from Azerbaijan’s Astara. The train travelled 8 kilometers to the border from where it entered the Iranian section of the route.
According to Younes Ranjkesh, governor of the northeastern Iranian port, Iran has started laying tracks on the Iranian section and in the first phase, track-laying for 0.6 kilometers will be carried out.
The Astara-Astara project includes a bridge on Astarachay River stretching along the border, which was built by Azerbaijan.
Azerbaijan has agreed to invest $500 million to build the railroad that is one of the main links in INSTC.
Another missing link is a route from Qazvin to Rasht. The construction of this section is in the final stage. The route includes Iran’s biggest rail bridge with a length of 1.43 km on Sefidroud river in the city of Manjil in Gilan Province.
Despite a missing rail link from Rasht to Astara, the Islamic Republic will use a multimodal transport system from its southern ports to Astara until the incomplete rail connection is added to the pathway.