General Studies Paper 2 (International Relations)
Question:- 31. Analyze the significance of International North-South Transport Corridor(INSTC) for India. Answer in 250 words.
Aug 04, 2022
Answer:-

INTRODUCTION:

The International North-South Transport Corridor (INSTC) is a multi-modal transport corridor established for the purpose of promoting transportation cooperation among the Member States. This corridor connects India-Ocean and Persian-Gulf to the Caspian Sea via Iran and is then connected to Saint Petersburg and North European via Russia. It is a 7,200 km-long transportation network offering the shortest connectivity route to its member states. It was established in the year 2000, by Iran, Russia and India.

 

BODY PARAGRAPH:

  1. Bilateral trade volumes will increase: It will reduce freight costs by 30% and journey time by 40% in comparison with the conventional deep sea route via the Suez Canal. It is also expected to eliminate usage of reefer containers for agro commodities and further support the supplies to Russia.
  1. Connectivity in shorter time: Europe-bound shipments from India that take 45-60 days to reach Europe, via Suez Canal, can be delivered in 23 days using INSTC. Also, connectivity with Russia and Central Asia will improve. The successful activation of the corridor will help connect India to Russia within 16-21 days at competitive freight rates leading to development of trade on the INSTC. At present we have to either use Rotterdam port or land route via China to reach Russia and Central Asia. These are long, expensive and time-consuming.
  1. Chabahar Port can act as transit centre: Chabahar Port which has been developed through Indian assistance is the commercial transit centre for region. Chabahar Port’s link in Iran with the INSTC will enhance connectivity with Central Asian countries will deepen cultural and political ties and drive investments: The corridor will improve India’s economic engagement with gulf countries like Iran and Iraq. India has also been pushing for boosting regional connectivity.
  2. It will provide access to lucrative markets of Central Asia and drive investments as it opens up a permanent alternative route for trade with Afghanistan and Central Asia. NSTC is considered a viable option for Indo-Russian trade amid current geo-political challenges and in the long run, could be an alternative to the Suez Canal.
  3. It may also provide humanitarian aid to crisis-stricken Afghanistan through INSTC. Also, it would play an important part of Indo-Pacific strategy.
  4. The route may help India in fulfilling its energy needs. The improved connectivity along with RBI’s latest rupee settlement announcement may help the country import oil from Iran. Once a leading importer of Iranian oil, India stopped buying the commodity after the USA imposed sanctions on Iran in 2018.

 

THE CHALLENGES :

India is also promoting INSTC as a viable and fairer alternative to China’s Belt and Road Initiative (BRI). New Delhi’s grand geopolitical strategy is motivated in part by the dual goals of challenging and delegitimising China’s BRI in resource-rich regions of the world, including Central Asia and Africa. Central Asia has a major security threat in the form of the Islamic State (IS), a terrorist organisation. The issue of differential tariffs and customs in the region is a major challenge that India needs to overcome.

 

CONCLUSION:

The geopolitics of the world is changing very fast and India needs to secure its position with regards to the trends. Any major event – whether a pandemic, a war or a trade route disruption in any part of the world has the potential to create shock waves in India, hence, affecting the already fragile state of economy. Strengthening the role of INSTC provides one such route to safeguard ourselves from disruption and establish new ways of trade and interaction.