Context : The International North-South Transport Corridor (INSTC) recently began. It started off with the two containers that journeyed from Russia to India via Iran.
International North–South Transport Corridor (INSTC)
- It is a 7,200 km-long multimodal transportation network encompassing sea, road, and rail routes to offer the shortest route of connectivity.
- It was established on 12th September 2000 in St. Petersburg, by Iran, Russia and India
- It links the Indian Ocean to the Caspian Sea via the Persian Gulf onwards into Russia and Northern Europe.
- Freight between India, Iran, Afghanistan, Armenia, Azerbaijan, Russia, Central Asia and Europe.
- Origin:
- The legal framework for the INSTC is provided by a trilateral agreement signed by India, Iran and Russia at the Euro-Asian Conference on Transport in 2000.
What is the aim ?
- To reduce the carriage cost between India and Russia by about 30% and reduce the transit time from 40 days by more than half.
- The corridor is expected to consolidate the emergingTrade facilitation
What are the Significance of INSTC?
- Trade facilitation: INSTC is aimed at reducing the carriage cost between India and Russia by about 30 per cent.
- New corridor in making: To transform the economies of countries into specialized manufacturing, logistics, and transit hubs by facilitating access to newer markets.
- Multimodal transit: The recent Suez Canal blockade, which cost the global economy hefty damage amounting to US$9 billion, has amplified the optimistic outlook towards the INSTC as a cheaper and faster alternative multimodal transit corridor.
What are the Benefits for India?
- Ease of trade: For India, it provides a shorter trade route with Iran, Russia, and beyond to Europe, creating scope for increased economic engagement.
- Export promotion: It connects India with Central Asia, and Russia, and has the potential to expand up to the Baltic, Nordic, and Arctic regions, increasing the scope of trade multifold.
- Alternative Route to Central Asia: Permanent alternative route for India to trade with Afghanistan and Central Asia, given the hurdles in the direct route through Pakistan.
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