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IRAN STARTS TRANSFER OF RUSSIAN GOODS TO INDIA

UPSC CURRENT AFFAIRS | IRAN STARTS TRANSFER OF RUSSIAN GOODS TO INDIA BY USING NEW TRADE CORRIDOR | 14TH JUNE | BUSINESS STANDARDS

/ June, 2022, UPSC Daily Current Affairs

SYLLABUS SECTION: GS II (BILATERAL RELATIONS)

WHY IN THE NEWS?

Recently, Iran starts the transfer of Russian goods to India.

  • It uses International North-South Transit Corridor (INSTC)to transit the goods.

KEY DETAILS:

  • Iran has been keen to revive a stalled project to develop North-South Transit Corridor that uses Iran to link Russia to Asian markets.
  • The plan involves eventually building a railroad line that can transfer goods arriving at Iranian Caspian Sea ports to the southeastern port of Chabahar.
  • It will reduce the carriage cost between India and Russia by about 30% and bring down the transit time from 40 days by more than half.

It is an initial pilot transfer to test the corridor in IRAN STARTS TRANSFER OF RUSSIAN GOODS TO INDIA.

INTERNATIONAL NORTH-SOUTH TRANSIT CORRIDOR

  • The INSTC is a 7,200 km-long multimodal transportation network encompassing sea, road, and rail routes.
  • It links the Indian Ocean to the Caspian Sea via the Persian Gulf onwards into Russia and Northern Europe and offers the shortest connectivity route between them.
  • It was launched in 2000 with India, Russia, and Iran as its founding members.
  • Since then, INSTC membership has expanded to include 10 more countries – Azerbaijan, Armenia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkey, Ukraine, Syria, Belarus, and Oman.
  • Bulgaria has been included as an observer state. Baltic countries including Latvia and Estonia have also expressed interest in joining the INSTC.
SIGNIFICANCE OF INST
  • It is an economic corridor that bypasses Pakistan (with which it has security and political disputes) and one that can develop relations with Russia, Central Asia, and Europe.
  • It will help in tapping into new markets and easing access to energy resources in the region.
  • Supply of energy as a commodity.
POTENTIAL TRANSPORT AND LOGISTICS GLOBAL GAINS FROM THE INSTC
  • Increased market access along with the creation of new markets.
  • Facilitation of transit by helping develop regional transit and logistics hubs.
  • It could be a viable alternative to the Suez Canal, sometimes the blockage caused temporary disruptions in the global trade flows recently.
  • Creation of regional supply chains across Eurasia.
  • Increased trade volume between member nations.
  • Creation of backward and forward linkages.
  • Synchronization of INSTC with Ashgabat Agreement and Organization of the Black Sea Economic Cooperation (BSEC).
  • Possible synchronization with Baltic, Nordic, and Arctic corridors in the future.
  • It can initiate transformative development in the region, facilitating trade, transit, and overall economic development.

Source: Business Standard