East and South East Asia exporters to benefit
India, Iran and Russia have resumed talks on activating the International North South Transport Corridor (INSTC), even benefiting the East and South East Asian exporters.
“It is not only to make Indian-Russian trade or Indian-European trade profitable, actually it will make it very lucrative for East Asia and South East Asia exporters,” said Ambassador P S Raghavan, Convenor of National Security Advisory Board in the Indian Government.
The corridor will cut transportation time and freight costs by half when compared to the current route through the Suez Canal, which have ships sailing half way around the world to reach European destinations.
The INSTC, discussed during Iranian President Hassan Rouhani visit to India in February this year, is a multi modal transportation established in September 2000 in St. Petersburg, by Iran, Russia and India for the purpose of promoting transportation cooperation among the Member States including Central Asian nations.
“There is nothing to stop INSTC from being activated in a matter of months,” said Raghavan, adding that capacity building can be carried out as trade volume increases and progress is made on customs related issues.
The INSTC potential is enormous and well known.
The INSTC road-route is in place and can be expanded while railway development will be required to cover some gaps in between the 7,200-km multi-mode network of ship, rail and road.
However, the route’s progress has been delayed by the United States-led trade transaction against Iran.
With the sanctioned lifted, the 7,200-km corridor has become “very competitive”, according to Raghavan.
It will compete with congested Suez Canal which is expensive for exporters and takes a longer distance to reach the European markets.
The customs authorities in the three countries, which leading the initiative, have discussed trans-shipment processes.
Logistics such as containerization needs to be sorted out, Raghavan said after addressing the 12th ISAS International Conference on South Asia on 6 April 2017 in Singapore.
The conference was organized by the Institute of South Asian Studies, a think tank of the National University of Singapore.
Raghavan felt that a special purpose vehicles of multi-national model and capacity is needed to manage the transportation network from end-to-end.
In 2014, the Federation of Freight Forwarders Association of India (FFFAI) had done a dry run on INSTC.
The INSTC member states recognizes the potential for efficient and seamless North-South transport caused by economic globalization and by ever increasing trade within the Euro Asia area, said the forwarders in a report then.
The International North South Transport Corridor (INSTC) Dry Run Study Conducted of August 2014 by FFFAI states:
The proposed INSTC route via Bandar Abbas in Iran to Russia and CIS Destination in transit through IRAN, could be the best route
with optimal transit/cost for the Indian Exporters/Importers.
The Member Countries signatory to the INSTC convention – India, Iran, Belarus, Kazakhstan, Armenia, Kirgizstan, Azerbaijan, Bulgaria, Russia, Oman, Tajikistan, Turkey, Ukraine. fii-news.com
