In a bid to boost trade with former Soviet Union countries, Iran and Russia, the commerce ministry has pitched for popularisation of International North-South Transport Corridor (INSTC) as an alternative route through Tehran that significantly reduces costs and travel time.
The move comes at a time when the government has adopted a market diversification strategy to help Indian exporters reduce their dependence on traditional markets in the West where there is currently not much demand and instead gain more access in growing markets in Asia, Africa and Latin America not tapped as much previously.
Even 15 years after the formalisation of the INSTC concept by India, Iran and Russia (in 2000), this alternative trade route has not taken off in a big way due to outstanding issues concerning logistics, banking connections, insurance cover as well as harmonisation of documentation and procedures for cargo.
About International North South Transport Corridor (INSTC):
The International North–South Transport Corridor is the ship, rail, and road route for moving freight between India, Russia, Iran, Europe and Central Asia.
The route primarily involves moving freight from India, Iran, Azerbaijan and Russia via ship, rail and road.
The objective of the corridor is to increase trade connectivity between major cities such as Mumbai, Moscow, Tehran, Baku, Bandar Abbas, Astrakhan, Bandar Anzali and etc.
Russia, Iran and India signed the agreement for the INSTC project in 2002.
Dry runs of the two routes in INSTC were conducted in 2014, the first was Mumbai to Baku (Azerbaijan) via Bandar Abbas (Iranian Port) and the second was Mumbai to Astrakhan (Russia) via Bandar Abbas, Tehran and Bandar Anzali (Iran).
Besides Iran, India and Russia, countries that are members of INSTC include Armenia, Azerbaijan, Belarus, Kyrgyztan, Kazakhstan, Ukraine, Turkey, Tajikistan, Oman, Syria and Bulgaria (observer status).
Once the North-South Corridor becomes operational, India will have better connectivity with Russia, bringing down the freight rates.
sources: the hindu, wiki.
The move comes at a time when the government has adopted a market diversification strategy to help Indian exporters reduce their dependence on traditional markets in the West where there is currently not much demand and instead gain more access in growing markets in Asia, Africa and Latin America not tapped as much previously.
Even 15 years after the formalisation of the INSTC concept by India, Iran and Russia (in 2000), this alternative trade route has not taken off in a big way due to outstanding issues concerning logistics, banking connections, insurance cover as well as harmonisation of documentation and procedures for cargo.
About International North South Transport Corridor (INSTC):
The International North–South Transport Corridor is the ship, rail, and road route for moving freight between India, Russia, Iran, Europe and Central Asia.
The route primarily involves moving freight from India, Iran, Azerbaijan and Russia via ship, rail and road.
The objective of the corridor is to increase trade connectivity between major cities such as Mumbai, Moscow, Tehran, Baku, Bandar Abbas, Astrakhan, Bandar Anzali and etc.
Russia, Iran and India signed the agreement for the INSTC project in 2002.
Dry runs of the two routes in INSTC were conducted in 2014, the first was Mumbai to Baku (Azerbaijan) via Bandar Abbas (Iranian Port) and the second was Mumbai to Astrakhan (Russia) via Bandar Abbas, Tehran and Bandar Anzali (Iran).
Besides Iran, India and Russia, countries that are members of INSTC include Armenia, Azerbaijan, Belarus, Kyrgyztan, Kazakhstan, Ukraine, Turkey, Tajikistan, Oman, Syria and Bulgaria (observer status).
Once the North-South Corridor becomes operational, India will have better connectivity with Russia, bringing down the freight rates.
sources: the hindu, wiki.
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