4 April 2020, NIICE Commentary 3908
Manohar Bhat
On 22 January 2020, the maiden Ganga-Volga Dialogue of Civilizations between India and Russia was convened with the inauguration by India’s Minister of State for External Affairs V. Muraleedharan and Russian Ambassador to India Nikolay Rishatovich Kudashev at the Dr. Syama Prasad Mookerjee Research Foundation in New Delhi. The Dialogue jointly conceptualised by Indian Prime Minister Narendra Modi and Russian President Vladimir Putin during the 2018 India-Russia Summit primarily concentrated on connectivity as major agenda. The crown jewel of India-Russia partnership on connectivity, remains the International North-South Transport Corridor (INSTC) intended to link India with Central Asia, Russia, Baltic, Nordic, Arctic regions and parts of Northern Europe. Connectivity projects have been considered as a fulcrum of geopolitics and strategy; reflected in Halford Mackinder’s seminal work The Round World and the Winning of the Peace. Historically and in the contemporary scenario, transport connectivity has been inextricably linked to countries’ quest for access to resources.
The Economic Times in 2017 hailed INSTC as ‘game changer in India’s Eurasia policy’. Although the INSTC predates China’s ambitious Belt and Road Initiative (BRI), its progress has been sluggish. However, more recently, member countries of the INSTC project seem to have shown more enthusiasm to operationalise it. The INSTC is a 7200 km multimodal transport network that will link the Indian Ocean and the Persian Gulf to the Caspian Sea via Iran, and then onwards to Northern Europe via St. Petersburg in Russia. The route involves freight moving from India, Iran, Azerbaijan and Russia via ship, rail and road. This corridor project evolved over a period of time and its genesis goes back to early 2000’s. In 2002 India, Iran and Russia ratified the agreement as founding members for this project. Subsequently, other members like Azerbaijan, Armenia, Kazakhstan and Bulgaria also joined the project.
The INSTC is as much about geo-economics as it is about geopolitics. While connecting a number of different geographical regions, it also has a very clearly defined commercial and economic interest such as facilitating transit and enhancing access to markets. The economic rationale behind this corridor is its ability to reduce the time and cost. A study conducted by the Federation of Freight Forwards Association of India came out with a report, which says that this route reduces cost by 30 percent and transport time by 40 percent.
Connecting different modes of transportation is at the core of this project, which comes with inherent challenges. Geopolitical competition and regional instability pose major problems in implementing these kinds of projects. The Chabahar port has been recognised as an essential gateway for India to enter into Afghanistan bypassing Pakistan and gain access to the Central Asian region. The primary driving factor behind India’s retrenchment from its multifaceted engagement with Iran are renewed US sanctions, which makes logistics and finance more difficult with Iran compared to pre-sanction days. Despite some of its challenges, there are also potential areas for the INSTC such as railway connection of two Iranian cities, Qazvin and Rasht, which will have a 164-kilometer long railroad connecting them. This railway line also borders with Azerbaijan. It is also India’s interest to focus efforts to engage with the Baltic and Nordic countries like Latvia, Estonia and Finland in this transport corridor project. Once INSTC starts to transport goods from Mumbai port to Helsinki port in Finland, there will be greater economic cooperation in terms of trade and connectivity. Another potential area that India is determined to integrate with this transport corridor is the Arctic region. While addressing the 9th International forum ‘Arctic: Today and the Future” held in December 2019, Indian Envoy to Russia D Bala Venkatesh Varma, expressed India’s desire to explore establishing connectivity between resource rich Arctic region and the INSTC. In February 2020, India also brought together all Central Asian Business Chambers through First India-Central Asia Business Council which aims to enhance better understanding between India and Central Asian countries. India’s Foreign Minister Dr. S. Jaishankar urged private industries to take special interest in reaching out to Central Asian countries. The next round of meeting will take place in India, which will be participated by Afghanistan as well.
Many experts argue that INSTC is India’s counter response to China-led Belt and Road Initiative. However, the INSTC is not a single country led project unlike China’s BRI and it was conceived much before BRI was initiated. Previously, it was called as the ‘Inter Governmental Agreement on International “North-South” Transport Corridor which was signed in 2002 by the three founding members. During the 6th Coordination Council meeting of INSTC that took place in August 2015 at the Jawaharlal Nehru Bhavan, New Delhi, S. Jaishankar who was then the Indian Foreign Secretary clarified the real purpose of INSTC as being primarily commercial. For these reasons, the INSTC will further relationships between India, Russia, Iran and Central Asian countries in commercial and trade terms.
China’s BRI is two pronged, namely the Overland Silk Road and the Maritime Silk Road. Both dimensions of the project span across 60 countries cutting across multiple regions of the world. Hence, there is huge difference in the objectives of BRI and INSTC and it is difficult to conclude that INSTC will be an instrument against Chinese BRI. INSTC provides a platform for India to increase its trade relationship with Russia, Iran and Central Asia. Despite historical relationship with all these countries, India could not shoot up its trade volume due to absence of strong transportation facilities. In this pursuit, a project like the INSTC will help overcome those hurdles. Challenge lies in front of all stakeholders and the diplomatic community, traders, trade forwarders, insurance and banking firms, ports, highway authorities, railway and logistics related officials to strive hard to make this corridor attractive and viable.
