Russia Sends Goods To Indian Port Via INSTC

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What has happened?

India, Iran and Russia have given momentum to operationalise the International North South Transport Corridor (INSTC) – The shortest connectivity route for Indo-Russian trade – days after the Iranian Foreign Minister visited Delhi.
Russia has sent consignments for India this Saturday from St Petersburg which will travel to India, Via the Caspian Port of Astrakhan and Iranian Port of Anzali and from there to Bandar Abbas Port and thereafter to Western Indian ports to operationalise INSTC.

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.

“The consignments are two 40-feet containers of wood laminates weighing a total of 41 tonnes.
The containers were loaded at St Petersburg and are heading toward Astrakhan where they will be loaded again at Solyanka Port.
They will then traverse the Caspian Sea to reach Iran’s Anzali Port where they are scheduled to be transported to Bandar Abbas port city in southern Iran via trucks.
The two containers will then be dispatched to India’s largest container port.”

The total journey will take less than 25 days, compared to the nearly 40 days it currently takes to transport goods from Russia to India and vice-versa.
Besides reducing time taken for trade between India and Russia, INSTC is considered a viable option for Indo-Russian trade amid current geo-political challenges.
INSTC, in the longer run, would be an alternative to the Suez Canal and Mediterranean dominated by some powers and Bosporus.

Connectivity via Chabahar Port and INSTC topped the agenda of the Iranian foreign minister’s visit to India last week.
There has been a plan to link INSTC with Chabahar Port which India has assisted to expand and is being used for connectivity with Afghanistan and Central Asia.

The Russian invasion of Ukraine and the subsequent sanctions against Russia have led to an exodus of Western businesses from country.
India is keen on filling up the economic vacuum thus created.
Multiple exporters have also begun discussions with Russian buyers and importers to supply retail and industrial goods.
India’s exports to Russia stood at $3.24 billion in 2021-22, up from the pre-pandemic figure of $3 billion.
Meanwhile, imports from the country have risen to $9.86 billion, of which $5.25 billion was crude oil, processed petroleum and coal.
Total imports had stood at $7 billion in 2019-20.
“To ensure more overland trade with Russia, the INSTC is important. However, it is even more important in the light of Chinese traders too, rushing to enter the Russian market,” a senior Commerce Department official said.
The route is also part of India’s overall efforts to establish greater connectivity and trade with the high-potential markets of the adjoining Commonwealth of Independent States (CIS) countries, officials say.

Exports to Central Asia stood at only $678 million, but New Delhi estimates the optimal trade potential to be at least eight-nine times this amount.
Major exports to the region are pharmaceuticals, machinery, coffee, tea and spices.
Countries in the region are considered underserved markets and are potential suppliers of energy and minerals to India.

In 2016, India signed a deal with Iran promising an $8-billion investment in the port and industries in the Chabahar Special Economic Zone.
But while the port has now emerged as a commercial transit hub for the region and especially Central Asia, the spate of financial sanctions against Iran by the United States has led to commerce suffering.
The United States had exempted the multinational project from its sanctions at India’s insistence back in November 2018, but the rest of the country is still under sanctions. This has stymied the natural growth of the port.

In February 2019, Afghanistan launched a new export route to India through the port.
The country had been an important node of the INSTC, and Kabul had been keen on the route as it provided the country an opening to global supply chains and trade networks while bypassing Pakistan.
But the Taliban takeover of the country ended the country’s participation in the project and effectively stopped plans of Indian goods reaching Afghanistan.

Q) Which is the oldest artificial harbour of Eastern Coast in India?